Greenland’s elections next week will be watched closely by the global mining industry

The future of a controversial rare earths mine has become a defining issue in the election.

By Jacob Gronholt-Pedersen, Reuters, Nikolaj Skydsgaard, Reuters - March 31, 2021

COPENHAGEN — Greenland holds an election next week that could decide the fate of vast deposits of rare earth metals which international companies want to exploit and are vital to the Arctic island’s hopes of economic recovery and independence.

The government called the April 6 snap election for Inatsisartut, the country’s parliament, after a junior coalition partner quit in a dispute caused by growing public concern over the potential impact of a big mining project on Greenland’s environment.

Though Greenland is home to just over 56,000 people, the fallout from the election will be felt far beyond its borders because it has what the U.S. Geological Survey says are the world’s biggest undeveloped deposits of rare earth metals.

As climate change and melting ice make access to the Arctic cheaper, international mining companies are racing for the right to exploit these deposits, which include neodymium, used in wind turbines, electric vehicles and combat aircraft.

[Geopolitics is making two rare earths mining projects in Greenland more complicated]

But opinion polls show the biggest party in the next parliament could be Inuit Ataqatigiit (IA), which opposes the major rare earth mining project at Kuannersuit, also known as Kvanefjeld, in southern Greenland because the site also contains radioactive materials.

If IA can form a coalition, it is possible that the project will be halted or delayed, with potential repercussions for global mining investors.

Acting Minister of Resources Vittus Qujaukitsoq has warned that if Greenland backtracks now, it could scare mining investors away, and “the credibility of the whole country is at stake.”

Such an outcome could also dent hopes of reviving Greenland’s fragile economy.

“If we don’t attract capital and create new jobs, I’m not sure what the future looks like for our country,” Jess Berthelsen, head of Greenland’s biggest labor union SIK, told Reuters.

Independence hopes

An economic revival is also widely seen as vital for the prospects of greater independence in Greenland, which former U.S. President Donald Trump offered to buy in 2019 and which hosts a U.S. air base.

A self-governing territory of the Kingdom of Denmark has a gross domestic product of only around $3 billion, which is driven largely by commercial fishing and grants from Copenhagen.

Though it has broad autonomy, the island’s government leaves foreign, monetary and defense policy to Copenhagen.

Economic experts say Greenland needs to diversify its economy, improve acute healthcare and housing problems and tackle social problems including widespread alcoholism, sexual abuse and the world’s highest suicide rate.

The Kuannersuit project has been debated for years. Support from Premier Kim Kielsen and his governing Siumut party helped license-holder Greenland Minerals gain preliminary approval for the project last year, paving the way for a public hearing.

[Public hearings on a controversial Greenland mine get underway]

But when Kielsen was ousted as party chief in December, new leader Erik Jensen — now a candidate to become premier — cast doubt on support for the project.

Protests erupted when public hearings started in February. At one meeting in Narsaq near the deposit, people inside and outside the hall banged windows and played loud music to disrupt presentations.

“The mine will destroy everything,” said Jens Davidsen, a fisherman in Narsaq who can see the Kvanefjeld mountain top from his kitchen window. “We are afraid dust from the mine will hurt our fishing grounds and drinking water.”

The small Demokraatit party quit the coalition in early February as opposition to the project mounted.

If IA wins power and delays the project, “they will face the challenge of having to explain to the global mining industry that Greenland actually wants mining, and that it is only this particular project that is problematic,” said Rasmus Leander Nielsen, assistant professor at the University of Greenland.