Australian miner’s Greenland rare earths project thrown into doubt

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Australian miner’s Greenland rare earths project thrown into doubt

By Nick Toscano

An Australian mining firm’s plans to develop a rare-earths mine in Greenland have been thrown into disarray after a left-wing political party won the Arctic island’s general election pledging to oppose the contentious project.

Inuit Ataqatigiit, with 37 per cent of the votes, still needs to hammer out a coalition to form government but observers said the result reflects voter concern about ASX-listed Greenland Minerals’ plans to develop the Kvanefjeld complex, which geologists say could be one of the world’s biggest deposits of rare earths and uranium.

Much of Greenland’s election focused on whether the semi-autonomous Danish territory should allow international companies to mine the sparsely populated Arctic island’s substantial deposits of rare-earth metals.

Much of Greenland’s election focused on whether the semi-autonomous Danish territory should allow international companies to mine the sparsely populated Arctic island’s substantial deposits of rare-earth metals.Credit:AP

Greenland Minerals’ shares collapsed 44 per cent to 8¢ on the back of the news and the company has asked the ASX to place its shares into a trading halt “pending an update to the market regarding the results of the recent election in Greenland”.

The election result comes at a significant time for Greenland, a semi-autonomous territory of Denmark that former US President Donald Trump offered to buy in 2019, as international mining firms push to gain access to its untapped mineral resources.

The Kvanefjeld project has generated significant controversy across Greenland, with the risk of radioactive pollution and toxic waste raising community concerns, said Dwayne Menezes of the Polar Research and Policy Initiative think tank. The involvement of China’s rare-earths giant Shenghe Resources, which holds a 10 per cent stake in Greenland Minerals, in the project was also source of tension in the island.

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“These are entirely understandable challenges that have raised very legitimate concerns, so I understand the reasons for the opposition,” Dr Menezes said.

“However, there is also the risk that if the operation were to be paused for an indefinite period or shut down completely, it would send signals to the world that are counter-productive to what Inuit Ataqatigiit might actually want – that Inuit Ataqatigiit is against economic development in general, or that Greenland is now closed to mining.”

Dr Menezes said the party recognised the need for Greenland to achieve economic self-sufficiency, attract investment and be viewed as a “stable and friendly” jurisdiction for investment. The challenge now would be for Inuit Ataqatigiit to make clear that it was opposed to Kvanefjeld “not all mining projects across Greenland,” he said.

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“The world is listening and seeking answers.”

Greenland Minerals is among a growing number of mining companies in Australia and overseas seeking to drill for rare earths – a group of 17 minerals that are key ingredients used in a wide range of high-tech applications including smart phones, weapons and electric vehicles.

According to some estimates, China is believed to hold up to 50 per cent of known global reserves of rare earths and accounts for 80 per cent of their production.

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