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Greenland explores Arctic mineral riches amid fears for pristine region

The move comes as BP and Shell join others exploring for oil and gas in the pristine waters off Greenland, as concerns grow that the wave of industrialisation in the region will damage the pristine environment.Screen Shot 2013-01-18 at 22.39.30

London Mining’s £1.5bn iron ore mine and new oil drilling licences for BP and Shell spark concern for environment

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Site of London Mining’s iron ore mine at Isua, Greenland. Photograph: London Mining


London Mining, a British mineral company, is trying to attract Chinese and other international investors to build a £1.5bn iron ore mine just outside the Arctic Circle in Greenland.

The move comes as BP and Shell join others exploring for oil and gas in the pristine waters off Greenland, as concerns grow that the wave of industrialisation in the region will damage the pristine environment.

Greenland and the wider Arctic is seen as one of the new frontiers for exploiting mineral wealth, but uncertain national boundaries have also opened up potential political, if not military, conflicts.

London Mining, whose board includes a former British foreign minister in Sir Nicholas Bonsor, has already opened talks with Chinese mining group Sichuan Xinye and others about helping finance a new mine at Isua.

London Mining chief executive Graeme Hossie said the company was looking at “all options, including Danish, other Nordic, Chinese and other global investors.” He said the competition for funding was challenging and it was hard to predict when it would be in place.

The project has received government approval and could result in an influx of more than 3,000 construction workers into the country, which has a population of 57,000, to build a port and pipeline to serve the mine.

At present there is no mining of any kind in Greenland, but the cash-strapped and semi-autonomous country is keen to break away from financial and political dependence on its historical owner, Denmark.

In October a new government in Nuuk led by prime minister Aleqa Hammond gave the go-ahead to the Isua scheme and another at Kvanefjeld, while lifting a decades-long ban on mining uranium and rare-earth minerals.

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Map showing location of Isua mine. Graphic: Guardian

Parliament voted to end the ban by 15 votes to 14 amid concern about the environmental and social impact of large mining schemes – particularly those involving radioactive materials such as uranium.

Hossie said: “London Mining has carried out several years of comprehensive environmental studies, all showing that the project can be completed without damaging the environment.”

However, a social impact report prepared by London Mining, which is backed by some of Britain’s biggest pension schemes such as Standard Life and F&C Asset Management, accepted there would be some detrimental effects from its scheme: “The key risks and negative impacts are on a more social and health level such as social conflicts, vulnerable groups, risk for accidents and access to natural areas during the construction phase. Furthermore, there will be a pressure on the development plans and public service.”

Last March the government of Kuupik Kleist fell after an election campaign dominated by an acrimonious debate over whether industries such as mining and oil would damage the traditional Inuit trades of fishing and hunting.

In particular there was criticism that the Isua scheme could lead to thousands of Chinese arriving in Greenland with a wider agenda of controlling an area of vast potential mineral wealth to feed their own country’s industrialisation.

London Mining has been keen to dampen this speculation and the new government has insisted all staffing plans will be discussed with local trade unions.

The Kvanefjeld scheme has been proposed by Australian company Greenland Minerals and Energy to produce uranium for a new generation of nuclear power stations in China and elsewhere. It is also intends to mine rare-earth minerals used in hi-tech weaponry and mobile phones.

Meanwhile, oil firms including BP, Shell, Statoil and ConocoPhillips have been awarded licences to operate in the region to join those previously given to ExxonMobil and Cairn Energy. Offshore drilling by Cairn in summer 2011 put it into physical contact with environmental campaigners from Greenpeace who want drilling to stop.

The 30 protesters from Greenpeace who were jailed in Russia and released before Christmas had been arrested for trying to disrupt similar operations in the Barents Sea.

But wider concerns surround the uncertain national boundaries with Canada and Russia, which are among the countries pressing territorial claims through a process handled under the UN convention on the law of the sea.



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