Did Denmark’s prime minister stop a Chinese firm from buying an abandoned military base in Greenland?

By Martin Breum - December 23, 2016
The abandoned former military base at Grønnedal was to have been sold, before  Denmark abruptly decided to re-open it. (Peter Barfoed / The Arctic Journal)
The abandoned former military base at Grønnedal was to have been sold, before Denmark abruptly decided to re-open it. (Peter Barfoed / The Arctic Journal)

Lars Løkke Rasmussen, Denmark’s prime minister, may have personally intervened to prevent a Chinese company from acquiring a disused naval base in Greenland that was put up for sale by the military, according to reports in Danish and Greenlandic media.

The Danish intelligence service has long been worried about the prospects of a growing Chinese presence in Greenland, but this may be the first time a Danish government has directly prevented a Chinese interest from buying land there.

The matter has presumably been kept secret until now, most likely in order to avoid problems with both Beijing and Nuuk. Greenland’s Self-Rule Authority has been working for years to attract Chinese investors, and cabinet ministers have been to China for multiple official visits. Their task is not likely to become any easier if it can be firmly established that Mr Rasmussen stepped in to stop Grønnedal from being sold to a Chinese firm. Additionally, Nuuk is worried that the Defense Ministry failed to inform Naalakkersuisut, the elected government, about the matter.

According to Sermitsiaq, a Greenlandic news outlet owned by Arctic Journal’s parent company, Kim Kielsen, Greenland’s premier, told a press conference last Friday that “the Danish government should have told Naalakkersuisut before it came out in the press that the Danish navy would again be using Grønnedal.”

Kielsen’s government is now investigating the matter.

The news of Rasmussen’s possible role broke last Wednesday, when defencewatch.dk, a Danish news outlet, ran an article in which five anonymous sources all confirmed that Rasmussen, in the spring of 2016, contacted the leaders of the of the Danish political parties behind the military’s current budget.

According to defencewatch.dk, the prime minister asked the party leaders to support a plan that involved taking Grønnedal, located in southern Greenland, off the market and reopening it as a military facility. Why? Because General Nice Group, a Hong Kong-based company, had appeared among the few interested buyers of Grønnedal. By inventing a military need for the base, Denmark could conveniently prevent General Nice Group from buying it. Rasmussen’s plan reportedly received the party leaders’ approval.

The prime ministers’s office has neither confirmed nor denied this sequence of events, however, a number of details have appeared that seem to support the anonymous sources quoted by defencewatch.dk.

The Defense Ministry, in June 2016, published a thorough study that laid out the details of the military’s needs in the Faroe Islands and Greenland in the coming years. The report, which took more than three years to compile, contained no mention of need to reopen Grønnedal.  The station was shut down in 2014 and all functions transferred to the new Arctic Command in Nuuk.

People living near Grønnedal have since scavenged building materials from the site, which according to defence sources is more or less derelict. Plans to demolish the base have been in the works for more than two years. On Jan. 28, Peter Christensen, the defense minister at the time, told the Danish national assembly that “keeping Grønnedal was something the Defense Ministry neither needed nor intended to keep open, neither fully or in part”.

All this appears to have changed with Rasmussen’s intervention. By the time Danish lawmakers, earlier this month, approved additional spending for the military’s Arctic operations, it had become necessary, according to the official agreement, to “re-establish the military’s presence at Grønnedal in the form of a strategic and logistics hub that could be used partly for storing of fuel, storing of maritime pollution response equipment etc, and as well as for training and education purposes.”

That echoes a message that the Self-Rule Authorities received in an email dated June 30 of this year and published by the Greenlandic media last week. In the email, the Defense Ministry informed authorities in Nuuk about General Nice Group’s interest in Grønnedal. However, the company’s interest was not identified as the reason for the military’s change of plans. Nor was this connection mentioned when a senior Self-Rule official met with Thomas Ahrenkiel, the Defence Ministry’s senior civil servant, less than two weeks ago, according to Sermitsiaq.

Greenlandic officials have previously welcomed General Nice Group’s presence. The company acquired the rights to a major deposit of iron ore by Isua north of Nuuk at the end of 2014. London Mining, a British firm, had planned to establish one of Greenland’s largest mines ever there. A couple of thousand miners, including workers from China, were to extract ore for Chinese steel mills, but London Mining went bankrupt and its permit went to General Nice. Since then, the company has stated it has no plans for the time being to revive the project, given the current low price of iron.

Denmark’s involvement has now prevented General Nice Group from using Grønnedal to expand its presence in Greenland. This may be a direct consequence of the concerns of the Danish intelligence services. They worry that Chinese companies will become so economically important for Greenland that they would be able to manipulate a Self-Rule Authority that is smaller and has fewer financial resources than many firms.

Nuuk has dismissed this fear as unsubstantiated. Vittus Qujaukitsoq, the foreign minister, speaking at a mining investors’ seminar in Denmark in November, confirmed that Chinese investors are as welcome in Greenland as any other investors. Qujaukitsoq is a frequent guest in China, including at a major mining expo every year. Earlier this year he visited Shenghe Resources, which has acquired 12.5 percent of a uranium and rare earths project at Kvanefjeld, in the southern part of the country. Danish diplomats have frequently helped the Self-Rule Authority’s diplomatic efforts in China.

Meanwhile, Danish foreign intelligence services have carefully followed Chinese investments in Greenland. It is, therefore, not unlikely that Rasmussen was acting on their advice. The fate of a small, disused military station in Greenland would not normally be a matter for the PM unless there was significant new information. It is also worth noting that Ahrenkiel, of the Defense Ministry, is the former head of the military’s foreign intelligence agency, as well as senior staff member in the Prime Minister’s Office.

Grønnedal today consists primarily of a number of wooden barracks and simple port facilities. The U.S. military built the base in 1942, during World War II.

American troops defended a nearby mine at Ivittuut, where a Danish company extracted cryolite, which at the time was necessary for the production of aluminium, which in turn was decisive for the production of American fighter planes that were to be used in Europe.

The base was later transferred to Denmark. Until 2012, it served as headquarters for Denmark’s Greenland Command.

The author is a Danish journalist who has written extensively about Arctic issues, including The Greenland Dilemma.