The former prime minister and head of the social democratic party (Siumut) resigned due to allegations of misusing public funds since taking office. A new election was recently held and mining and extraction issues were a crucial factor during the formation of a coalition government. The main question is whether this political turmoil will harm or delay upcoming mining projects.
Canadian mining company True North Gems Inc recently instructed its joint venture partner Leonhard Nilsen & Sønner to mobilise equipment and initiate construction at the Aappaluttoq ruby and pink sapphire mine project in Southwest Greenland. The project has been well planned and indicates that the Greenlandic authorities are enthusiastic about realising upcoming mining projects and willing to facilitate a smooth process.
During a heated debate on Greenland's natural resources in 2013, it was decided that Parliament would discuss the national community once a year. Thus, in April the prime minister gave the first official statement. Among other things, the extraction of rare earth metals, including uranium, was discussed.
The Greenland government has presented a new proposal for its revised oil and mineral strategy for 2014 to 2018. The strategy will have a significant impact on the direction that Greenland will take over the next five years, as well as containing concrete suggestions as to the likely focus areas for supporting the development of the mining and oil industries.
The Greenlandic Parliament has expressed its continued interest in the exploration and extraction of oil, gas and mineral resources in the Arctic region. Despite the many risks and uncertainties, future investments in the exploration and extraction of such resources will be considerable and are only expected to increase further, due to the general increase in world prices and the potential of new shipping routes.
Greenland has long had a 'zero tolerance' policy in relation to the extraction of uranium, due to concerns over the consequences for that part of the population residing in close proximity to the areas where uranium may be extracted, as well as concerns for the vulnerable environment around the Arctic zone. However, Parliament recently voted in favour of lifting this ban, albeit by the narrowest possible majority.
Since 2002 there has been an increasing interest in the exploration and exploitation of the subsurface in Greenland, which has resulted in a growing number of granted mineral licences. The retreat of the Arctic ice has opened up new opportunities for oil and gas exploration, as well as for new shipping routes, which may make the extraction of natural resources in Greenland more profitable.
The recent formation of a new government in Greenland may greatly influence the possibilities for extraction in the coming years. Possible changes include renegotiation of parts of the Tax Act, the Large Scale Projects Act and the Mineral Resource Act, and a possible lifting of the ban on the extraction of uranium. Most parties are keen to expand the mining industry - the questions are merely how and at what pace.
Greenland has recently accelerated the process of redefining its foundation, moving from a reliance on fisheries to becoming an industrialised country within the kingdom of Denmark. Due to findings already made, as well as expected future discoveries of mineral deposits (including oil and natural gas), the mineral industry is likely to become the most important industry in Greenland.
The pursuit of oil has begun in the Arctic area - particularly in Western Greenland. Greenland now faces significant environmental challenges arising from the extraction of oil in such a vulnerable and harsh environment. This update highlights a number of legal issues regarding the protection of the Arctic environment from the effects of oil exploration and extraction.