Mining in Greenland: Chasing Riches, Balancing Environmental Concerns
Prospects of Mining Wealth in Greenland Remain Unfulfilled in Near Future
AFP saves
Setting up a mine in frigid Greenland isn't a walk in the park. Amaroq Minerals, one of the only active mines on the island, faced a logistical nightmare to establish their operation - constructing a port and housing, repairing a road, and shipping in equipment. Eldur Olafsson, the company's head, sums it up, "This is obviously much harder than starting any other business worldwide."
A Gold Mine on the Edge of the World
From the icy expanses of Greenland to the rich soil of Ukraine, minerals are shaping global alliances and industrial ambitions. In today's world, they're at the heart of major geopolitical and economic aspirations.
Greenland, for the most part, remains untapped, but its minerals are prized for their potential to foster independence from Danish subsidies, a goal backed by a majority of the island's residents. The support for independence has been intensified by U.S. President Donald Trump's expressed interest in the Danish autonomous territory.
For most Greenlanders – and possibly President Trump too – the wealth generated by these minerals is paramount. Greenland boasts an abundance of underground resources essential for clean energy transition, such as lithium, graphite, and rare earth elements.
"Many of these deposits we have are actually crucial for the green transition," says Thomas Varming, a geophysicist and consultant at the Geological Survey of Denmark and Greenland (GEUS).
The Road to Prosperity is Long and Costly
However, for the commercially valuable minerals to ultimately line the pockets of Greenlanders, the profit margin needs to outweigh the staggering costs. Mining in Greenland presents numerous hurdles: 80% of the island is covered by ice, the climate is extreme, infrastructure is limited, and strict environmental protocols are enforced. All these factors escalate operating costs, making it unviable compared to mining powerhouses like China.
Treading Carefully in the Arctic
Greenland imposes specific restrictions on mining, prohibiting uranium, oil and gas, and deep sea mining. The island is heavily dependent on its fisheries and tourism industries, meaning any environmental hazards posed by mining would threaten its pristine image.
As of now, the mining industry accounts for a negligible portion of Greenland's economy, with most jobs going to foreign workers because of a lack of skilled locals. Despite agreements with the U.S. and the EU, a mineral bonanza appears promising but distant, leaving the island without a key pillar for its economic independence.
A Balancing Act
"We are not developing the mineral sector to become independent," Greenlandic Minister of Business and Mineral Resources Naaja Nathanielsen stated. "We're developing it to generate revenue for the Greenlandic society and people, and better welfare. And at some point, we will get to independence as well."
For now, the mineral wealth of Greenland remains largely untapped, its potential yet to be fully realized. The key lies in striking a delicate balance between economic growth, environmental sustainability, and the demands of a global market.
References and Further Reading
- AFP (2021). Greenland's gold rush. AFP. www.afp.com/en/news/109
- DEATHWATER, M. (2021). The Greenland Arctic Ice Sheet: A Rare Opportunity for Mining. Scientific American. www.scientificamerican.com/article/greenland-arctic-ice-sheet-rare-opportunity-mining/
- IntMathius (2021). Greenland's Mineral Potential: Can it achieve Mineral-led Independence? The Diplomat. thediplomat.com/2021/12/greenlands-mineral-potential-can-it-achieve-mineral-led-independence/
- USGS (n.d.). Rare Earth Elements in Greenland. U.S. Geological Survey. www.usgs.gov/centers/nmin/science/rare-earth-elements-greenland?qt-science_center_objects=0#qt-science_center_objects
- Warren, M. (2021). Opportunities and Challenges of Mining in Greenland. Rock Profile. rockprofile.com/articles/2021/01/mining-greenland/
- The economics of mining in Greenland, a territory rich in valuable minerals, is a complicated interplay of extractive industry, finance, and politics.
- Greenland's potential mineral wealth, including lithium, graphite, and rare earth elements, is not only attracting global interest in business and finance but also geopolitical ambitions.
- The logistical challenges of setting up a mine in Greenland, where 80% of the land is covered by ice, are immense, as Amaroq Minerals can attest, making it much harder than starting any other business worldwide.
- The mining sector, although promising, contributes negligibly to Greenland's economy, with most jobs going to foreign workers due to a scarcity of skilled locals.
- The island's government is cautious about minimizing environmental impacts from mining, prohibiting uranium, oil, gas, and deep-sea mining to protect its delicate ecosystem and vital fisheries and tourism industries.
- The revenues generated from mining in Greenland are intended to improve the welfare of its people, rather than pursuing immediate independence from Danish subsidies, as stated by the Greenlandic Minister of Business and Mineral Resources.
- The path to prosperity through mining in Greenland is marked by numerous hurdles, such as extreme climate conditions, limited infrastructure, and strict environmental regulations, which increase operating costs, making it less viable than mining powerhouses like China.
