Greenland Oil & Minerals, Issue 15, December 2016

Issue 15 2016
GREENLAND
First Ruby Mine

in the Arctic
Royalty causes
controversy
Wavering Delays
Uranium Mine
True North Tired of Ruby Myth | On With Your Helmets! The Mines Are Coming | Oil Hunt on Standby
| Rare Earths By No Means Rare | Crouching General, Hidden Iron | China Proposes New Arctic Mining Fund
| Gold hunting in Godthb Fjord | Large Ruby Crystals Found in the Mountains
ULRIK BANG / BANG.GL
Content
Mineral memos ..................................................................... 6
On With Your Helmets! The Mines Are Coming.................. 9
First Ruby Mine in the Arctic ............................................... 10
Politician Demands Ruby Apology ....................................... 12
True North Tired of Ruby Myth ............................................ 13
Hudson to Export Anorthosite ............................................. 16
10
Oil exploration is good entertainment ................................. 18

Oil industry has not given up on Greenland ......................... 20
Huge New Mining Project is a Golden Chance .................... 24
Ironbark Zinc Will Not Pay Royalty ....................................... 26
Rare Earths By No Means Rare ............................................ 30
Finishing Touches to Uranium Mine ..................................... 34
Uranium Mountain Will Change Their Lives ......................... 36
Wavering Delays Uranium Mine .......................................... 40
Chinas Interest in Greenland Worrying................................ 46
28
Gold hunting in Godthb Fjord ........................................... 52

Large Ruby Crystals Found in the Mountains ....................... 55
Greenland Oil & Minerals is independent of political and

commercial interests. Unless stated otherwise, all articles are
written by journalists from the two Greenlandic newspapers,
AG or Sermitsiaq. We try to provide balanced and relevant
coverage and appreciate your input, criticism and ideas for
topics.The editing of this issue of Greenland Oil & Minerals
was completed on 29 december 2015.
46
GREENLAND
Published by Sermitsiaq.AG
Sipisaq avannerleq 10 Postbox 39 3900 Nuuk
Phone +299 38 39 40 mail administration@Sermitsiaq.AG
www.Sermitsiaq.AG
CVR: 387083 GER & SE: 12341954
2
Editor in chief: Poul Krarup, krarup@Sermitsiaq.AG

Editor: Mads Nyvold, nyvold@Sermitsiaq.AG
Graphics design: Linda L. Rachlitz, linda@Sermitsiaq.AG
Sales / advertising: Peter Schou Rasmussen, peter@Sermitsiaq.AG
Translation: Easy translate
Print: www.tryk.gl
Oil & Minerals #15
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Low Price of Oil Puts Paid to
Oil Adventure
The dream of an economically independent Greenland is unlikely to come true on the basis of black gold drawn from the
ocean floor.
In many cases, all the expenses involved in drilling, dodging
icebergs and finally transporting the crude oil to a major port,
dwarf corresponding costs elsewhere in the world.
This was the conclusion of a new type of analysis conducted
by the U.S. Geological Survey (USGS) in cooperation with the
Geological Survey of Denmark and Greenland (GEUS) way back
in 2010.
The USGS focused on the deposits in North East Greenland,
reckoning in all the expenses involved in recovering crude oil
and getting it out to the rest of the world. This life cycle was
also paired with the probability of actually discovering any, and
how different prices for a barrel of oil affect the cost ratio.
Even with a large commercial discovery, you will be lucky
if you are able to earn money in North East Greenland, said
Donald Gauthier, who is a geologist with the USGS, specialising
in the Arctic.
Meanwhile, three years earlier, the USGS had estimated that
the waters off North East Greenland concealed an abundance
of undiscovered deposits of oil and gas: about 31 billion barrels. At that time, in terms of value this amounted to about
DKK 10,000 billion. Consequently, the USGS placed North East
Greenland on a Top-20 list out of the 500 most important oil
regions in the world. Greenland is also a real treat for oil companies, because of the stable conditions of our neighbours in
terms of politics and legislation.
Despite the favourable conditions, long-term prospects for oil
exploration in Greenland have become even more distant. The
European reference oil, Brent has fallen and is down to a price
last seen in 2004. The price drop is due to on-going high global
production and the prospect of even more oil on the market
4
in the near future. Russian oil production is at its highest level

since the collapse of the Soviet Union, while the OPEC countries are also pumping out oil in record amounts. Meanwhile,
in 2016 we can expect Iran to start selling oil again, now that
sanctions against the regime in Tehran have been lifted.
Its frustrating, sighed Kim Kielsen, Prime Minister of
Greenland, at an international briefing in Denmark at the end
of 2015.
With an estimated production cost of 50 dollars per barrel
in the difficult Arctic conditions in Greenland, and with a current oil price of around 35 dollars per barrel, Greenlandic oil
exploration is bad business. Thats why were turning our attention to other areas of the mineral resources sector.
Were still pushing the mineral strategy, Kielsen said to
Bloomberg Business.
The interest in Greenlands hard mineral reserves clearly
persists and were still betting on it, but the appetite for oil is
for others to decide. Perhaps the expectation that oil would be
the future had been pumped up too high.
Mads Nyvold, editor
Oil & Minerals #15
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No nukes from Nuuk

A bill to be voted on by Danish lawmakers in
2016 will seek to ensure that Greenlandic uranium is not used in nuclear weapons. The bill
comes after Copenhagen, in 2013, recognised
Greenlands right to exploit all of its underground resources. The concession came after
Greenlandic lawmakers voted in October 2013
to overturn a ban on uranium mining.
Even though it accepted the vote, the government in power in Copenhagen at the time
made it clear that Denmark continues to be
responsible for the foreign and security policy
of the entire Kingdom of Denmark. Uranium
exports, it argued, were a matter of national security and could be regulated by Copenhagen. Legal experts suggest that
the bill is an attempt by Danish lawmakers to ensure that sales of Greenlandic uranium abroad do not bring Copenhagen
in violation of its own international obligations to prevent the spread of nuclear weapons.
Smiths working on ruby mine

The North Jutland smiths at DS Stlkonstruktion in Hobro are currently working on a somewhat unusual project. It is the companys job to produce the
structure for the process line, which one day will transform giant rocks into red
rubies in Greenlands first ever gemstone mine.
Its an incredibly complicated task, because, in the steel design, we have to
take into account the machines, which have already been made, and which come from China, Germany and the United
States. It is hard to adjust steel to a production apparatus, which we do not have available, and for which we only have 2D
designs, explains Tor Hastrup, who is the project manager of the mining project at DS Stlkonstruktion.
It is DS Stlkonstruktions job to provide the steel structures for the whole process line, which includes an optical sorting
machine to separate dirt from gemstones, and a giant crusher to crush rocks. The latter, in particular, requires a particularly
solid structure.
The crusher applies dynamic loads of up to 20 tons on the surrounding structures and requires complex calculations of
the impact, explains Tor Hastrup.
Expectations for the ruby mine

In November 2015 True North Gems announced that the mining of rubies and pink sapphires
in the area of Qeqertarsuatsiaa had begun.
Asii Chemnitz Narup (IA), Mayor of Kommuneqarfik Sermersooq, is happy and optimistic
about the project. For me as Mayor it is a great day. Im looking forward to several years of
mining. We expect to create about 80 new jobs for local people, she writes in a press release.
Asii Chemnitz Narup is sure that the mining of rubies and pink sapphires will elevate the
whole municipality.
There are high hopes. Not just in terms of the number of good jobs, but also in terms of
the expected revenue, and this is very promising for all parties.
We have good reason to be happy and good reason to wish True North Gems the very best
of luck for their mining. It will benefit all of us, says the Mayor of the municipality.
Oil & Minerals #15
New minerals boss

Jrgen T. Hammeken-Holm, who for a long
time has been acting Permanent Secretary
of State for the Ministry of Mineral Resources, is no longer an interim measure, appointed when Jrn Skov Nielsen left the position to take up a position in the Ministry
of Industry, Labour and Trade. Naalakkersuisut offered Hammeken-Holm the position,
which he took up on 10 September 2015.
Jrgen T. Hammeken-Holm has a long professional background in the Government
of Greenland, including several executive
positions in the mineral resources sector.
Most recently Jrgen T. Hammeken-Holm
was acting Permanent Secretary of State for
the Mineral Licence and Safety Authority.
There were three applicants for the position of Permanent Secretary of State of the
Ministry of Mineral Resources.
Lauge Koch and the

resund Chryolite Company
Early Drillings in the Isua Iron Ore Mine is just one of the film clips, which the
National Geological Survey of Denmark and Greenland (GEUS) have now made
available online. The others include films about: the work on iron ore at Isua;
one on the prospecting of the resund Chryolite Company at Sdr. Isortoq in
South West Greenland; and one about Lauge Kochs two-year expedition to
central East Greenland in 1938.
The film clips come from old 16-mm and 8-mm films in the GEUS archives, which have now been digitised and made
accessible to a larger audience. The sources of the film clips are 8-mm and 16-mm films from geological expeditions, and
films released by mining companies, who were searching for mineral resources in Greenland. In the digitisation process
GEUS has only performed the very necessary editing: for example, removing irrelevant run-up footage.
You can visit GEUS YouTube channel here: http://www.youtube.com/user/GEUSgeology/videos
80 at anti-uranium demonstration
Politicians and environmental activists in Copenhagen held a demonstration against uranium
mining. The Greenland MP Aaja Chemnitz Larsen (IA) and other speakers tried to breathe life into
the constantly red hot resistance to uranium in the Danish Realm from the likes of environmental
enthusiasts. Greenland needs success stories in the mining industry to attract more investors and
new projects, stated the Inuit Ataqatigiit MP.
But, more importantly, we as politicians and as citizens have a responsibility not to think shortterm and not to let short-term economic interests come before the interests of humanity, or let financial interests and the
desire for jobs come before our health, our current commerce and traditions, or before our beautiful nature. About 80
protesters attended the demonstration, which started at Regnbuepladsen and proceeded to Nytorv. In addition to Aaja
Chemnitz Larsen, the newly elected MP for the Alternative Party, Rasmus Nordqvist was present. He expressed his support
for uranium sceptics in Greenland.
Oil & Minerals #15
On With Your Helmets!
THE MINES ARE COMING

Greenland should focus more on
mining education already, even if
big mines are a thing of the future.
This is the recommendation of a
new report
Young people in Greenland, even in
primary school, should be encouraged to
choose a future in the mining industry,
and mining-related education should
accelerate. This is one of the recommendations in a new report from the Danish
Academy of Technical Sciences (ATV):
The Development of Technical Education
and Expertise for Mining in Greenland.
Regardless of the current recession on
the world market in terms of mineral resources, it is now that Greenland should
be preparing for a future involving the
mining industry.
The forecasts indicate that the demand
for the likes of iron, nickel and copper
will grow again in the near future.
Then prices will rise, and the construction
8
of large mines in Greenland can again be

profitable, predict the authors. But the
mechanism does not apply to rare earths
(the projects at Kuannersuit (Kvanefeld)
and Killavaat Alannguat (Kringlerne)), if
development of prices is controlled by
global foreign policy.
Education is never wasted
The ATV report points to a wide range of
courses, which could help to ensure that
the people of Greenland have the skills
that mining companies require, at the
same time guaranteeing that Greenland
will benefit from the mines. The palette
ranges from miners and explosive experts,
mechanics, electricians and ships captains to engineers, geologists and experts
in radiation safety. This is just a few of
the professions a mining industry needs.
Investment in mining-related education
will not be wasted, even though a boom
in the mining of mineral resources is slow
in coming. The report identifies the Faroe
Islands as an example. It was late in the
1990s that they had high hopes for oil

and gas extraction, so the focus was
on training Faroese youngsters to work
in this sector. Today they have jobs in
the North Sea, and a number of Faroese
companies have emerged to work as
subcontractors for the oil and gas industry. Even though oil does not come from
the Faroese continental shelf, the focus
on oil education has meant progress for
the Faroe Islands.
Clear framework
In a number of other areas too, Greenland should rearm, if a future involving
mining is to be realistic and to benefit
society. The main thing is for the framework conditions to be in order.
After recent changes to taxation
of mining companies, Greenland has
dropped from a place in the top 10 to
41st place in the world-ranking list of
attractive mining countries.
This is the way the writers of the
report outline the situation: From an
Oil & Minerals #15
Beware the mineral resources comfort blanket! The authors of the report fear that Greenland is not
currently preparing sufficiently for the mining industry of the future. Then society will miss out on the
benefits, and the gap between rich and poor will further increase.
international perspective, the reluctance

to establish mining in Greenland seems
to spring from uncertainty about the
framework conditions for mining, lack
of overall infrastructure and a possibly
temporary decline in commodity prices.
In addition, there are the national challenges of a society and a population that
are not equipped for a mining industry
and the fact that there is no guarantee of
political will for stability in the area.
Partnerships
A recurring theme in the report is the
need for public private partnerships
(PPPs), which can raise the large investment that is necessary. Dong and Statoil
are cited as examples, and the authors
suggest the establishment of partnerships between the Danish Realm and
industries spanning several links in the
chain from mining to the use of mineral
resources. On that basis, conditions can
be agreed to alleviate risks. Companies in
Greenland have opportunities as subconOil & Minerals #15
tractors in lots of fields when mining on

a large scale becomes a reality. With an
overall capacity building strategy, society
can ensure that businesses have the necessary skills, and one can establish a list
of approved companies. Then the mining
companies do no have to import services.
They can buy them in Greenland.
The mineral resources
comfort blanket
Beware the mineral resources comfort
blanket, the ATV report warns: In this
model for the future, the country has
not prepared itself for a mining industry.
Revenue from the mining industry only
benefits a few people and therefore
creates social inequality. The shortage of
skilled manpower leads to bottlenecks
and wage pressures at the expense of
other industries, and mining companies
bring in manpower from outside. There is
no incentive to undertake social reforms,
if Greenland gets instant revenue, and no
investment is made in the development
of skills.
The authors do not hide the fact that
they fear this scenario. The tendency
to bide time, which is expressed in large
parts of Greenland, is a symptom of
this, they write.
Loads of new jobs
The alternative is to address the future
now. If Greenland prepares thoroughly,
the mines can create growth that will
benefit society. Each job in the actual
operation of a mine leads to three or
four jobs in other sectors. The report
mentions health workers, kindergarten
teachers, teachers, accountants, traders,
the food industry, restaurants, tourism
and culture.
It will be too late to address all this,
when the mining companies arrive. Now
is the time for Greenlanders to put their
helmets on.
By Sren Rasmussen, freelancejournalist

9
FIRST RUBY
Mine in
the Arctic
One of the first

Being one of the first companies to progress through the new licence system and
to reach a positive outcome is a testament
to all involved. We now look forward to
fully commissioning the newest mine in
Greenland, which will be one of the most
advanced coloured gemstone mines in the
world.
In September, 37 employees were hired
in the mining area. Apart from a geologist
from the Norwegian parent company, all
come from Greenland.
Of the 79 different employees, we have
had during the first year of work, all have
come from Greenland. We have also used
at least 72 subcontractors, all from Greenland, says Bent Olsvig Jensen.
By Mads Nyvold and Poul Krarup
krarup@sermitsiaq.gl
10
POUL KRARUP
Peter Madsen, Project Manager, Norwegian geologist.
CEO Bent Olsvig Jensen(in the middle): All 79 of the workers we have employed in
the first year for construction work come from Greenland. We have also used at least
72 subcontractors from Greenland in the construction phase.
POUL KRARUP
On 2 December 2015 True North Gems

announced the start of mining operations
at the Aappaluttoq Ruby and Pink Sapphire
deposit in Greenland.
During a very tough period for the mining industry with many financial challenges,
it is deeply gratifying to see everyones
hard work materialise and for True Norths
shareholders to see mining start, stated
Nicholas Houghton, President and CEO of
the Company.
LNS Greenland, a joint venture partner in
the Aappaluttoq Mine, have been contracted to operate the mine. Their NorwegianGreenlandic technical team have submitted
mining plans to the boards of True North
and True North Gems Greenland A/S, and
been granted approval for pit operations to
begin.
This is a historic day for the revived
mining industry in Greenland, stated Bent
Olsvig Jensen, Managing Director of True
North Gems Greenland A/S.
POUL KRARUP
True North Gems Commences

Mining at the Aappaluttoq Ruby
and Pink Sapphire Deposit
Three politicians from the Construction Committee in Inatsisartut and the committee
secretary have been informed about the ruby mining project in Aappaluttoq. They
are the committees deputy chairman, Kalistat Lund (IA), who is also a member of the
Mineral Resources Committee and on the picture Jens-Erik Kirkegaard (Siumut), who
is also Chair of the Mineral Resources Committee, and Justus Hansen (Democrat).
Oil & Minerals #15
POUL KRARUP
POUL KRARUP
Ane Eva Lange is an engineering student and intern at the mining project. She comes
from Ilulissat and is studying geology, mineral resources and construction engineering
at the Centre for Arctic Technology at the Technical University of Denmark (Artek).
POUL KRARUP
Jrgen Nielsen from Qaqortoq is working as a

plumber for the construction work.
Sren Hansen from Qaqortoq is working as a plumber for the construction work.
FACT
The first ruby deposit was found on
Ruby Island in 1966 by GEUS. True
North Gems started exploration in
2004. The exploitation licence for
the Aappaluttoq deposit was signed
in March 2014. The first production
is expected to commence in winter
2015-16 with a production of two
barrels of concentrate per week. After two years, this is expected to rise
to two barrels a day.
The mine is expected to employ 80
workers during operation (of which
75%
POUL KRARUP
will be Greenlandic manpower).
Knud Peter Thomsen is a carpenter and comes from Maniitsoq. He informs us that he
works for three weeks on construction and then has one week off.
Oil & Minerals #15
The Aappaluttoq is expected to be

productive for nine years. So far
True North Gems have invested DKK
0.25 billion in the project. True North
Gems will apply for more exploration and exploitation concessions in
peripheral areas and in depth, if new
options crop up.
11
LEIFF JOSEFSEN
Member of the parliament Justus Hansen is still waiting for an apology from the party Naleraq.
Politician Demands Ruby

Two political fighting cocks have
entered a war of words against
each other and it was particularly
rife during a mineral resources
debate
Apologize!
Such was the insistent cry in the parliamentary chamber from Democrat
Justus Hansen after Partii Naleraqs Per
Rosing-Petersen had suggested that the
Democrats have a special interest in ensuring favourable conditions for the ruby
company, True North Gems, of which
Jens B. Frederiksen (former Chairman of
the Democrats) is Vice President.
Im still waiting for the apology. You
owe it to us, reiterated Justus Hansen.
But Per Rosing-Petersen stood his
ground.
I have not made any direct accusations. Therefore, I will not apologise to
you, he elaborated, while Justus Hansen
was almost at breaking point.
The Democrats are not representatives of True North Gems. Be 100%
aware of that. We speak on our own
behalf, stressed Justus Hansen.
Flag for independence
The basis of this escalating exchange of
words between the two political poles
in Greenlandic politics was an interpel12
APOLOGY
lation debate raised by Peter Olsen (IA)

who wants the law to be such that only
Greenlandic gemstones, which have
been cut and polished in Greenland, can
be exported.
The best and most precious gemstones
such as diamonds, emeralds, rubies and
sapphires and other gemstones should in
the future be covered by the Mineral Resources Act, so export cannot take place
until we have refined the stones, argued
Peter Olsen from the rostrum.
Partii Naleraq endorsed this demand.
The Chairman of the party and former
Prime Minister, Hans Enoksen believes
that increased revenue from mineral resources represents the path to independence from Denmark.
This is all about self-reliance. About
the right to make decisions about our
own resources. Today it is foreign companies that reap all the benefits, while we
comfort ourselves with a pathetic levy.
We must get better at profiting from
our own resources. In my old age, I look
forward to flying the flag of independence, said Hans Enoksen.
Wasted support
But the Democrats did not believe in the
idea of local jewellery production:
You can cut and polish gems all over
the world and at prices we can in no
way compete with because of our salary
levels. So I dont understand the idea of

doing this. We are already burdened by
having to subsidise the fishing industry.
According to recent figures, it currently
costs society DKK 900,000 to keep a
seafood buyers job going.
Surely we dont want the same model
for the mineral resources industry, said
Michael Rosing.
Peter Olsen attacked this line of reasoning:
I do not agree with you. Why
shouldnt we be able to cut gems here
and earn money from that? he asked,
with support from Per Rosing-Petersen.
Right now theres a debate on
Facebook about a gemstone that has
earned millions. And it was polished
abroad. So theres a lot of money at
stake here, he said.
According to Democrat Poul Hansen, it
is not True North Gems who are creating
obstacles for local jewellery production.
On the contrary.
The Canadian-Norwegian company
would like to allow rubies to be cut and
polished in workshops in Greenland.
They have made that clear. They have
nothing against that kind of revenue
remaining in Greenland, he said.
By Niels Ole Qvist

qvist@ag.gl
Oil & Minerals #15
True North Tired of
Ruby Myth
No ruby debate fails to mention the rock

samples the mining company True North
Gems have taken. But the rocks are safe
and sound in North America, and will actually soon start coming on the market,
promise True North Gems.
Fuelled by critical voices from Nuuk
and Qeqertarsuatsiaat, who have fought
against the mining companys monopoly
on mining in the licence area, the fate
of the stones has repeatedly become the
stuff of myth in the debate.
The most recent time the rock samples
were in fashion in Inatsisartut was last
week during an interpellation debate,
and in two recent 37 questions from
Partii Naleraq, who wanted to know
where they are, what they are worth and
when Greenland will get their share.
I think the rocks will continue to
come up in the debate until we get to a
stage when the stones are traded, so we
can see that they have been sold. And
that is going to happen. Right now its
just a matter of timing, says Bent Olsvig,
CEO of True North Gems.
Has not sold anything
He points out that the mining company
must be ready for production before they
can sell the samples. The purchaser has
to assume that more will be available
when they have used up the first ones.
Larger unique rocks, which incidentally
are not cut, will not be sold until what
they are worth becomes clearer.
The reason the question of the rock
samples comes up again and again is
because it comes from the same people
every time. We have always complied
with all the regulations and requirements, and it is hard to say what we
could have done differently. For investigative purposes, we had to extract samples like any other company. The reason
Oil & Minerals #15
POUL KRARUP
Rumours still abound about

where the rock samples the
company have taken actually are
Bent Olsvig, CEO of True North Gems.
everyone is so focused on the matter is

because were talking precious stones,
says the CEO.
Three kilos of precious stones
Altogether, True North Gems have
15,365 carats of cut corundum (equivalent to 3,073 grams of cut corundum),
299,797 grams of rough corundum
and 1,400 kilos of rock material, which
contains corundum, according to the
Government of Greenland.
The samples are stored in Canada
and the United States and, according
to the company, nothing has been sold.
The Government of Greenland regularly
check that all the rocks are still in the
mining companys possession.
Corundum is the second hardest
natural mineral in the world, usually
grey and translucent. When corundum is
clear and contains a very small amount
of the chemical chromium it forms a
pink colour: pink sapphire. If corundum
contains a little bit more chrome, it forms
red corundum: ruby.
According to the CEO of True North
Gems, the 3+ kilos of corundum the
company have in storage is a mixture
of rubies and pink sapphires in various
shades. But he will not comment on the
value of the rocks before they are sold.
So far they have been used to market the

upcoming mine.
We have some hopes, but given that
we have not yet sold anything, we cannot be certain. So it would be incorrect
to speculate on the value, says Bent
Olsvig, who can only refer to the companys profitability study, in which the
rough corundum is expected to fetch $7
per carat.
Sunrise Ruby
In response to Partii Naleraq, the Ministry of Mineral Resources write that the
Government of Greenland will conduct
a valuation before rubies and sapphires
from the sample material are sold.
According to True North Gems, fewer
than 10% of crystals from the upcoming
mine in Qeqertarsuatsiaat are gemstone
quality. The rest of the material has little
or no value.
Last spring, the 25.59-carat Sunrise
Ruby, mined in Myanmar/Burma, was
sold for almost DKK 212 million at an
auction in Geneva. But stones of this
quality are few and far between, the auctioneer told AG at the time. He had only
seen one like it in 40 years.
By Andreas Lindqvist
andreas@ag.gl
13
Mining Companys
BIG DREAM
of New Field Results
The Canadian company, North
American Nickel are planning to
expand their drilling programme in
the already huge area at Maniitsoq,
where the company have a licence.
MINERAL RESOURCES
North American Nickel have a licence for
a 15-kilometre x 75-kilometre area at
Maniitsoq in West Greenland.
It is the largest exploration area in
the country, but it is not enough, claims
Mark Fedikow, Chairman of the board.
In 2016 the company will apply for an
expansion of the licence area.
We are constantly amazed at the
amount of nickel deposits we see at
Maniitsoq,
even though we were clear from
the very beginning that the area had
14
potential. The results from this years field

season continue to give us confidence
that the project has significant potential
for the discovery of an economically viable seam, he says. The company have
drilled 30 holes (or 5,655 metres) in the
course of the field season and the results
are whetting their appetite.
Next year we will apply for permission
to expand the quantity of minerals, for
which we have a licence. We believe that
the Maniitsoq project has the potential
to contain financially profitable deposits
of nickel, sulphide and other ore along
its entire length. Our project at Maniitsoq
is one of the largest, if not the largest,
nickel deposit in the world to be explored, and that means positive focus on
Greenland and its mining sector, says
Mark Fedikow.
Great potential
It is not only North American Nickel
who see great potential in the project
at Maniitsoq. The Head of the Geology
Department of the Mineral Licence and
Safety Authority(MLS), Julie Hollis is also
hopeful.
It is noteworthy that in their field
season they have been successful both
in their existing drilling areas and in their
new drilling areas. It gives them something to work on.
It is extremely positive that they are
choosing to continue explorations next
year, particularly in the light of the fact
that many exploration projects find it
hard to raise funding, she says.
Julie Hollis also points out that there
are several factors about the Maniitsoq
project that indicate that it will not take
long before they establish a regular mine.
Oil & Minerals #15
The areas high number of mineral deposits

is believed to originate from a meteor that
hit the area three billion years ago. This is the
explanation given by Julie Hollis, Head of the
Geology Department in the Mineral Licence
and Safety Authority. (MLSA)
Their big challenge is to find the highest number of mineral deposits in their
large exploration area to create fertile
ground for a mine. But I believe that
there is potential in the area. I believe the
chances of finding large enough deposits
to start production are good. It is also
an advantage that the area is relatively
densely populated in terms of infrastructure, shipping facilities and manpower,
she says.
The prospect of a new mining project
in Greenland also pleases the Greenland
Business Association.
Extremely important
It is extremely important to prove that it
is possible to operate financially profitable mining in Greenland. Now we have
the True North Gems ruby mine, which
will soon start operations, the Hudson
Oil & Minerals #15
Resources mining project and North

American Nickel, who are continuing
their drilling programme.
It is beginning to look like something
that represents evidence of a Greenlandic
mining industry, says Thomas Tyt Mogensen, consultant and secretary for the
Mineral Resources Industry Committee at
the Greenland Business Association.
Political optimism
Siumut and IA have also greeted the field
results positively.
It is great news that the project will
continue. It shows that this is a project
with potential and quality, since it is
generally difficult to find funding right
now, says Jens-Erik Kirkegaard, Chair
of the Mineral Resources Committee and
MP for Siumut.
The opposition are of the same opinion.
FACT
North American Nickel have been
exploring the area around Maniitsoq
since 2011 in the hope of finding
large nickel deposits that can provide
the basis for conventional mining.
Many people consider the project
to be one of the most interesting
mining projects in Greenland, partly
because it has two very strong capital
funds (The Sentient Group and VMS
Ventures) as sources of funding.
The mineral resources sector is one

of the legs we would like to stand on in
terms of business development, so it is
positive that the project will continue. It
is a great story to communicate to the
outside world.
It shows other mining companies that
Greenland is worth something, says
Naaja Nathanielsen (IA), member of the
Mineral Resources Committee.
By Mathies Hvid Toft, freelancejournalist

15
Jim Carbon, Head of Development and Vice President of Hudson Resources, taking a selfie together with Mayor Hermann Berthelsen and the students at
the Greenland School of Minerals and Petroleum, for the signing of the IBA agreement on 24 September.
Hudson to Export Anorthosite from
LATE 2016
The company will now try to find
contractors to build the project and
a shipping company to transport
the mineral
All the major fibreglass manufacturers in

the world are currently testing anorthosite
from the Kangerlussuaq area. So says Jim
Cambon, Head of Development for Hudson Greenlands mining project.
He is also the Vice President of Hudson Resources, who have headquarters
in Vancouver, and who are responsible
for the upcoming Qaqortorsuaq-White
Mountain anorthosite-mining project. The
company already have a ten-year contract
16
with one of the worlds major energy

glass and fibreglass manufacturers.
This is the North American company,
Owens Corning in Toledo, Ohio, a global
supplier of construction materials. Jim
Cambon expects the new mine, which
will produce the coveted anorthosite,
to be operational in the fourth quarter
of 2016, and running at full strength by
early 2017.
The company are responsible for delivering anorthosite directly to customers.
But they do not yet have a contract
with a specific shipping company.
We are holding discussions with
various shipping companies to decide
how we can best transport the material
around the world, says Jim Cambon.
Many sub-contractors
Nor have they decided which firms will
perform the construction work. The company have already built a temporary road
and a temporary quay for the removal
of the many samples, which are sent to
potential customers around the world
and for transport of construction materials etc. The contracting company, RTS,
which is based in the Faroe Islands, but is
registered in Greenland, has carried out
this work.
RTS have tackled a number of projects
for Hudson for about five years. The work
they are doing at the moment is building
Oil & Minerals #15
a road and harbour facilities, which will

allow us to ship out bulk samples of our
material. Potential customers need to test
the material in their kilns. Were talking
large samples (2,000 - 3,000 tons), which
cannot be flown out by helicopter, says
the Head of Development.
But these temporary facilities will be
upgraded to a proper road and a proper
harbour in 2016. We havent yet decided who will do the job. But were in
the process of drawing up a number of
contracts for next years construction programme, which will be put out to tender
in early 2016, says Jim Cambon.
The company have been granted a 30year exploitation licence, renewable for
20 years. Everyone is satisfied with the
IBA agreement between Hudson Greenland A/S, the Government of Greenland
and Qeqqata Kommunia, which was
signed last week. This shows that the
general rule will be for the work to be
carried out as much as possible by local
companies and local manpower, and for
the company as much as possible to use
local suppliers with a few exceptions.
The minimum requirements are: at
least 50% Greenlandic involvement
during the construction work; at least
70% Greenlandic involvement during
the operational phase (the companys
own target is 80%); and at least 70%
Greenlandic during the closure. It is
expected that a total of 20 workers will
be employed during the construction
phase and about 61 workers during the
operational phase.
Hudson are also required to participate

in training and skill-development projects. They are also expected to contribute various cultural activities.
Happy municipalities
Both the Government of Greenland and
the municipality are pleased with the IBA
agreement, which was signed on Thursday 24 September by Vittus Qujaukitsoq
and Anda Uldum from Naalakkersuisut,
Mayor Hermann Berthelsen and James
Tuer, CEO of Hudson Greenland.
Jim Cambon believes that the IBA is an
excellent deal for Greenland.
The agreement sets minimum targets
for Greenlandic workers and service
companies in Greenland. We will also use
significant funds annually for cultural,
social and educational programmes in
Qeqqata Kommunia, says he.
The project is not complicated, and
we feel that all the necessary skills
to run the mine are available in
Greenland. One of the challenges for us
is competition for manpower with other
major construction projects in Greenland.
At the moment there appears to be a
shortage of skilled labour because of the
harbour being built in Nuuk, the prison
and several other projects that are in
progress, says Jim Cambon.
Other projects
Do Hudson Resources have plans for
other mining projects
in Greenland?
Were always on the lookout for
new mineral opportunities. Once weve

got the White Mountain project up and
running, we will have the liquidity and
capacity to spend more money in Greenland. We are looking for other potential
resources that could be developed, says
Jim Cambon diplomatically.
For several years, Hudson Resources,
who have their headquarters in Vancouver, have been investigating minerals in
Greenland, including diamonds and rare
earth metals.
With regard to the Sarfartoq rare
earth metals project, we dont expect to
apply for a mining licence for the time
being. Even though Sarfartoq is a great
project, it is difficult to find capital in
the current market for rare earth metals.
Theres no money to build new projects,
says Jim Cambon.
By Poul Krarup
FACT
The company expect to mine
285,000 tons of ore per year, and to
transport 200,000 tons of material to
North America, Europe and Asia. The
material will be sailed away in bulk
carriers with a capacity of 25,000
tons. Production is expected to result
in 85,000 tons of waste.
The project is expected to yield
between DKK 165.4 million and
DKK 197.7 million in tax revenue for
Greenland during the first 20 years
production. The largest part will be
income taxes. The company will pay
an annual royalty of 2.5%, regardless of how much Hudson Greenland
earn.
The company expects to spend DKK
31.4 million in Greenland per year,
DKK 12.5 million of which will be
direct costs for staff. The remaining DKK 18.9 million will be spent
on purchasing goods and services
in Greenland. Mining operations
will cost a total of DKK 186 million,
which will be spent on facilities in
Europe
and Greenland. The mine and facilities in Greenland are expected to cost
a total of DKK 96 million. This is
stated in the IBA agreement.
The map shows the location of the Hudson project between Sisimiut and Kangerlussuaq.
Oil & Minerals #15
17
Steffen Jacobsen, author of an acclaimed thriller about oil

exploration and murder in Greenland.
Oil exploration is good
entertainment
From murderous environmentalists to corrupt drillers. The subsoil
is rich in material for thrillers and
geopolitical page-turners
The Arctic has become a hot subject, In
recent years, the Danish and international media have
had their eyes opened to the riches of
Greenlands subsoil and the possible oil
deposits. Now writers are in hot pursuit.
The latest addition to the trend is a
thriller by the doctor and successful
Danish author Steffen Jacobsen with the
book
A mountain of lies. Reviewers have
praised the release to the skies.
The plot begins at a field station in
western Greenland, where Peter Holm chief geologist in Nobel Oil - recently has
analyzed the last drilling for what looks
to be the worlds greatest oil adventure.
Everyone is excited - the Danish Government, the Greenland Home Rule, and
not least the Chinese Development Bank,
18
which is helping to fund the project.

But shortly after returning to Copenhagen and a meeting of Nobel Oil Peter
Holm is found brutally killed. Everything
indicates that a rabid environmental
organization is behind, but the offender
is as sunk in the ground
Fiendish plans
Probably first on the field was Hans Jakob Helms, former parliamentary political
adviser to Greenlands Siumut party.
Last year saw the publication of his
generation novel If You Whistle For
The Northern Light, about love and oil
fever in the Arctic. The protagonist gets
caught up in underhand dealings around
Greenlands rights to the subsoil and a
covert attempt by some friends to usurp
the lucrative service contracts, when oil
companies seriously start moving into
Northeast Greenland.
Exciting and important
At the end of last year Michael Katz Krefelds novel, Black Snow Falls also came
out. Innocent people in Denmark are

gunned down. Everything seems to point
to a rabid environmentalist. However,
the investigation leads to a nationalist
underground organisation and brings the
police to Greenland, because of some
Greenlandic prisoners, who in 1968
disappeared without a trace, along with
a group of Danes and Americans.
Later came the publication of a third
novel about Caroline Kayser, an ambitious career woman on her way to the
top of the company Dana Oil. She travels
to Greenland, a hotspot acording to
her creator, author and former Maersk
employee, Helle Vincentz.
Mining and oil extraction will probably play a very crucial role in the economic, social and environmental future
of Greenland. So it is both exciting and
important to write about it, says Helle
Vincentz.
By Mads Nyvold
nyvold@sermitsiaq.gl
Oil & Minerals #15
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Oil & Minerals #15
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19
Oil firms in Greenland:
were still here

There may be little activity on
the water, but that does not mean
the oil industry has given up on
Greenland
When Cairn Energy, an Edinburgh-based
oil firm, shut its office in Nuuk last year,
it was painted in the media as the end
of Greenlands 40 year fling with oil that,
despite having seen 19 wells drilled,
ultimately proved fruitless.
Cairn had been the most enthusiastic
explorer in Greenland, but after drilling
eight wells in Baffin Bay in 2010 and
2011 at a cost of over $1.9 billion without making a commercial-grade strike,
the company decided it was time to pull
up stakes.
Lost amid the gloomy outlook was
Cairns pronouncment that it intended
to return to Greenland after it had spent
time developing more easily accessible
deposits.
Also lost was the fact that the company is just one of 12 licence holders in
Greenland. All of them, including Cairn,
20
still expect that Greenland will one day

become an oil-producing county, according to Roy Leadholm, a ConocoPhillips
executive who is also the head of GOIA,
an interest group representing oil firms
operating in Greenland.
15 licenses to explore
Currently, oil firms hold 15 licences to
explore in Greenland. And while no-one
is actively drilling at the moment, Mr
Leadholm says all the licence holders are
actively analysing seismic data in preparation for future drilling.
None of this is visible to people in
Greenland, but it constitutes a significant
investment nonetheless, he says.
By reprocessing the data, companies
aim to significantly enhance the geological images, on which future decisions if
and how to proceed will depend.
Should all go as planned, the next drill
in Baffin Bay could take place in 2018. In
north-eastern Greenland, where seismic
testing is just getting underway after
firms were granted licences in a 2013
bidding round, and where conditions will
prove more challenging, drilling probably

wont take place until after 2025.
Both of these opportunities, Mr
Leadholm says, are something firms are
looking at for the long term.
Not worth pursuing
Not everyone has been so bullish about
Greenlands future. Statoil, GDF Suez
and Dong have all handed back Baffin
Bay licences, deciding they werent
worth pursing.
That, coupled with Cairns inability
to make a go of Greenland oil and the
year-long dip in oil prices has left some
wondering if the country is finished as an
oil producer before it ever got started.
Mr Leadholm admits that the lower
price has reduced the amount of cash on
hand, but he cautions against making a
false connection. The current price does
affect how much money companies have
to develop new fields, but the decision to
do so, he notes, is based on expectations
about the future demand for oil, not the
price at the pump today.
Clearly, the drop in the oil price entails
Oil & Minerals #15
A time for gathering data

very real challenges for the industry.
Choices have not become easier and companies will indeed only move on to drilling
in Greenland if the opportunities are competitive within their global portfolios.
With projections that demand will grow
(pushing up the price) and the prospect of
improving data gathering, as well as extraction and safety technologies (making it
cheaper to get out of the ground) Greenlands oil could yet turn profitable.
But its still too early to draw conclusions, Mr Leadholm says.
Theres still work to be done.
Greenlands oil is playing hard to get.
The industry, however, appears unfazed
by the prospect of a long courtship.
By Kevin McGwin
kevin@arcticjournal.com
Oil explorers conducting seismic testing

in the waters off Greenlands northeastern coast say they are satisfied with
the amount of data they were able to
collect during the 2015 season.
A total of 7,000 kilometres of seismic
data was gathered in the testing, carried out during August and September,
according to Hans Kristian Olsen, the
managing director of Nunaoil, a nationally owned firm.
This is important information that
will form the basis of future mapping
of potential oil reserves, Olsen said.
This years marks the fourth year
running that seismic data has been
collected. This year surveys, carried
out by TGS, a Norwegian firm, comes
after 5,000 kilometres were surveyed in
2014, according to Nunaoil. Both years
benefitted from relatively ice-free conditions. In years when there are large
volumes of ice, the amount of survey
data can be as low as 1,000 kilometres.

The successful collection season in
north-eastern Greenland stands in
contrast to western Greenland, admitted Olsen. Once believed to be on the
verge of a commercial strike, the last
test wells were drilled there in 2011,
and there was no exploration activity
there this summer at all.
Ten licences have been issued for
exploration off western Greenland, but
some of those permits now risk expiring next year unless the firms that hold
them carry out drilling activity before
then.
The low price of oil is weighing on
companies finances, Olsen said. but
that is not the same as saying Greenland doesnt have potential. We do,
things are just progressing more slowly
on the exploration front. (KM)
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21
OIL HUNT
on
STANDBY
The sharp decline in oil prices
may represent a chance for the
Arctic marine environment.
Now everyone has gained extra
time to consider how to avoid
an ecological disaster
It looks like a script for a horror movie,
but it could become a reality.
The day an oil disaster occurs in the
Arctic region, it will be fatal for humans
and animals, and hunters and fishermen.
In reality, we have no effective ways
to extract oil today, either mechanically
or otherwise. And the long-term effects
of pollution are incalculable. If we look at
the Exxon Valdez disaster in the Gulf of
Alaska [where the super tanker leaked 42
million gallons of crude oil,
Ed.], today, 25 years later, there are still
problems with nature and the environment, said the Head of Research for the
Institute of Bioscience (Arctic Environment) at the security conference, Matchpoint 2015 at Aarhus University.
He was asked of there was absolutely
nothing that could be done?
I dont want to be totally negative.
But, unlike European waters, where we
have some options and can send lots
of ships in, it is very hard in the Arctic.
You can reduce the damaging effects,
22
but there is no effective solution. At the

same time activity in the area is increasing: both in terms of exploration and
maritime transport, he answered.
The power of science
In a panel debate, both researchers and
politicians pointed out the need for
stricter international regulations in this
area, although the so-called
Polar Code is a step in the right direction.
Unfortunately, it is still the case that
every company can send a ship through
the Arctic with a full cargo of oil. If
an accident happens, the cleaning up
process is huge and the shipping product
probably goes bankrupt. The bill ends
up on the plate of the taxpayers, said
Sren Ryesgaard, a senior researcher.
Norways ambassador to Denmark,
Ingvar Havnen, senses a certain pessimistic attitude amongst scientists in terms of
their research and announcements having any impact on the necessary, political
decision-making process.
You, as scientists, should not underestimate your role in relation to politicians.
For example, the work being done by the
Arctic Council is very much influenced by
the input and participation of researchers. I think you should take note that a
large number of activities in the Arctic
have been put on standby because of low

oil prices. That buys us time to understand
what challenges there are in the region,
and how we can take the necessary steps
to prevent accidents. In this process, science plays an extremely important role,
he added.
Voter power
The Swedish politician, Jan Lindholm
from the Green Party, supported the ambassador. He argued that NGO organisations like Greenpeace should continue to
exploit their popular basis to influence
developments in the Arctic. Meanwhile,
his confidence in the ideals and vigour of
politicians is limited.
I have been an active politician for
10 years and so can say with a certain
degree of authority that the most important thing for a politician is always being
re-elected. Obviously, it is better of decisions are rational and made on the basis
of knowledge.
But politicians do nothing if the electorate is not behind them. That is why
it is important to have strong NGOs and
research, he stated at the conference
in Aarhus.
By Niels Ole Qvist

qvist@ag.gl
Oil & Minerals #15
Minister Promises Review of
Oil Spill Response

The new Danish Minister of
Defence will not reveal whether
the efforts of the Armed Forces
were satisfactory, when oil
pollution was discovered at Tasiilaq
In August 2015, when an oil spill was
discovered off Tasiilaq, it took the Armed
Forces ships five days to arrive, only to
discover that the oil had spread in every
direction.
First, the inspection ship, the Knud
Rasmussen, had to sail 800 nautical miles
from Northeast Greenland all the way to
the position 361 km southeast of Taasilaq. When it finally arrived, the investigation was hampered by high waves, ice
and severe weather.
The slow response to the oil spill led
to astonishment from several politicians
in Greenland, and the likes of the World
Wildlife Fund and Greenpeace used the
occasion to point out once again that
combating oil spills in the Arctic is more
or less impossible.
Even small oil spills in the Arctic are
impossible to stop. They discovered it
more than a week ago and they havent
even been able to take a sample. It
shows all too clearly that Arctic weather
and ice make it virtually impossible to do
anything about an oil spill, said
Oil & Minerals #15
Jon Burgwald at the time. He is the

Arctic representative for Greenpeace.
However, the Knud Rasmussens long
and fruitless voyage to the area, where the
oil spill was observed, will not persuade
the newly appointed Minister of Defence,
Peter Christensen to express criticism.
In response to a parliamentary question from the Greenland Committee, he
chose instead to refer to a statement
from the Armed Forces, in which there is
no doubt about the conclusion.
It is estimated [], that Denmarks
preparedness in the specific situation
was satisfactory, since the alleged oil
pollution was discovered, and there was
immediate response with the disposition
of units for verification and possible pollution, if that had been possible, writes
the Joint Services Defence Commander
in his report.
Real oil spill
It is also apparent that information about
a possible oil spill was received from the
European satellite-based marine environment monitoring system
Clean Sea Net, but confirmed that
same day by a Danish Hercules plane.
When flying over the site, they
discovered that there was a real oil spill.
However, they could not obtain information about the nature of the pollution,
including whether the oil spill could be

controlled, since this was being verified
from the air, writes the Commander,
adding that the oil had disappeared
again, when the plane returned to East
Greenland three days later.
In the light of this information, we
concluded that the oil spill had been
spread by extremely bad weather (storm
low pressure) in the affected area on 12
August 2015.
The Arctic Commander then concluded
that the oil spill was not controllable,
write the Armed Forces, not mentioning
that it then took yet another two days
for the Knud Rasmussen
to get there.
In his reply to the Greenland Committee, the Minister of Defence, Peter Christensen, promised that there would be a
revision of the strategy, which the Armed
Forces have for combating oil pollution in
Greenland.
andreas@ag.gl
23
The Ironbark Zinc mine will be located 100 kilometres southeast of the worlds northernmost mainland point, Cape Morris Jessup on the Peary Land
peninsula near the small Citronen Fjord. From here the lead and zinc concentrate will be sailed out three times a year in the open water period between
July and September.
FACT
The Australian mining company,
Ironbark, are behind the project.
The company are seeking permission to mine 3.3 million tons of zinc
and lead per year in Citronen Fjord
in the Northeast Greenland National
Park.
The nearest settlement is Qaanaaq
in Northwest Greenland, almost
1,000 kilometres away.
The construction phase will take
two years and require an investment of DKK 3.3 billion.
During the mines lifetime, which
is calculated to last no less than 14
years, operating costs will be approximately DKK 24 billion. During
the construction phase, Ironbark expect to employ about 300 full-time
staff: 60 from Greenland.
During the operational period the
number of employees will rise to
470 over the first ten years, during
which Ironbark will endeavour to
employ 90% local manpower. In the
final years of the mines lifetime,
the company expect to employ 290
staff.
If one were to translate the project into Danish terms, it would be
equivalent to an investment of DKK
300 billion.
24
Huge New Mining Project

is a Golden Chance for
GREENLAND
The prospect of a mining project
worth more than DKK 27 billion is
getting both Naalakkersuisut and
the Greenland Business Association
excited
of another project in Greenland, where

people would spend more than DKK 3
billion in the construction stage alone,
says Brian Buus Pedersen, CEO of the
Greenland Business Association.
The Australian mining company, Ironbark

has submitted an official application
to the Government of Greenland for a
large, billion-kroner project to mine zinc
and lead in Citronen Fjord in Northeast
Greenland.
According to Ironbarks own calculations, the project will cost more than
DKK 27.3 billion and employ 470 people
a year when operation is at its peak. The
application seeks permission to mine 3.3
million tons of ore per year.
The Greenland Business Association is
also delighted about the prospect of a
new, absolutely premier-league mining
project, but points out that the politicians
now have a great responsibility resting
on their shoulders.
It is a huge, huge project. I cant think
Perfect opportunity
It is a perfect opportunity for politicians
to take action and allocate the necessary
resources to get the case processed as
quickly and as transparently as possible
and show the outside world that they
want this. Our economy needs projects
like this to succeed, he says, referring to
the diminished Treasury.
He also makes a direct suggestion to
the countrys politicians, who have just
assembled for the autumn parliamentary
session.
The political task is crystal clear from
this point on. They must speed up social
and labour market reforms to ensure that
we can supply the necessary manpower,
so that as a country we get the most out
of the projects, he says, highlighting
education and an increased incentive
Oil & Minerals #15
to take a job as two important areas of

focus.
By Mathias Hvid Toft, freelance journalist
LEIFF JOSEFSEN
Emphasises the importance

of the project
Vittus Qujaukitsoq (Siumut), naalakkersuisoq of Industry, Labour and Trade,
is also excited about Ironbarks application and also stresses how important it is
that the project is successful.
If Ironbarks project becomes a reality,
it will be a major step towards the establishment of a mining industry in Greenland. There is no doubt how important it
is for Ironbarks project and other projects
to succeed, he says.
His ministry will be responsible for
some of the initial negotiations with
Ironbark, when the consultation period is
over. He stresses how important it is that
as many as possible of the projects jobs
go to Greenlanders.
Brian Buus Pedersen, CEO of the Greenland Business Association: It is a huge, huge project. I cant
think of another project in Greenland, where people would spend more than DKK 3 billion in the
construction stage alone.
With more than 200 years of experience sailing in

the Arctic, we can say with certainty:
That it is not a task for anyone or any ship.
We are the common thread that binds Greenland together.
A lifeline to guarantee supplies to all of Greenland.
Oil & Minerals #15
25
Ironbark Zinc
Not
Will
Pay Royalty
The large-scale zinc project in the
far north of Greenland cites the
original 2007 exploration agreement, which only obliges the company to pay corporation tax in the
operational phase
The stage is set for tough negotiations
on how Greenland will earn revenue
from a potential large-scale zinc project,
now that it is clear that the company
involved maintain they will only pay
corporation tax.
Ironbark Zinc signed their exploration
agreement in 2007, long before an indignant IT project manager by the name of
Jens Erik Kirkegaard managed to get the
royalty payment rate a high position on
the agenda, before Aleqa Hammond got
him voted into parliament and allowed
him to legalise this form of taxation. That
is why there is good reason that not a
word about royalty appears in Ironbark
Zincs contract, which is still valid. Judging by the published consultation material, the company intend to stick to it.
The current exploration licence
(2007/02) for the Citronen Fjord project
(Ironbark) does not include a royalty, and
therefore the proceeds from a royalty
were not negotiated in the SSE (Social
Sustainability Evaluation), state the
company concisely in the material.
It was not possible to get in touch with
the companys CEO, Jonathan Downes
prior to the deadline to hear how far he
will go to stick up for his rights. But in
the Ministry of Mineral Resources there is
no doubt that it is entirely premeditated
for the company to write as they do, despite the political decisions, which have
since been made.
Its an invitation to dance. Thats
quite clear. Its something we will have
to discuss. They may have their opinion,
but we dont share it. It will be settled by
negotiation and solved to the satisfaction
of everyone, says Jrgen Hammeken26
The Ironbark Zinc mine will be located 100 kilometres southeast of the worlds northernmost
mainland point, Cape Morris Jessup on the Peary Land peninsula near the small Citronen Fjord.
From here the lead and zinc concentrate will be sailed out three times a year in the open water
period between July and September.
Holm, Permanent Secretary of State,

who acknowledges that, in legal terms,
the company are right to refuse to pay a
royalty, and cannot be rejected for that
reason.
Can provide DKK 4 billion
for Greenland
Jonathan Downes is right that his
licence says nothing about an obligation
to follow the new royalty systems. On
the other hand, Naalakkersuisut would
like everyone, somehow or other, to pay
their fair share to the Government of
Greenland, says the Permanent Secretary, adding that part of the idea of the
royalty payment is that, in the long run,
it will not be more costly than the corresponding corporation tax.
However, there is a good reason why
companies would prefer to avoid royalties if at all possible. With normal corporate taxation, expenses and write-offs are
deducted before tax is paid. With royalty
payment, companies have to up front for
each kilo of mined material, regardless of
whether the mine is in credit.
Fundamentally that means that Ironbark Zinc must raise more money, and
that it will take longer for the mine to
become profitable. That means greater
risk and makes it more difficult to raise
capital. According to opponents of royalty payment, the consequence is that it
is harder to establish mines in Greenland.
For society, royalty payment is a good
solution, but for the company a slightly
poorer solution, because they have to
raise capital, which otherwise they would
not have to, in order to pay a whole lot

in advance. Otherwise they would have
been able to wait. And at times the mineral resources market is in a poor state.
So thats where the struggle lies, says
Jrgen Hammeken Holm, Permanent
Secretary of State.
The worlds northernmost
mainland point
The Ironbark Zinc mine will be located
100 kilometres southeast of the worlds
northernmost mainland point, Cape Morris
Jessup on the Peary Land peninsula near
the small Citronen Fjord. From here the
lead and zinc concentrate will be sailed
out three times a year in the open water
period between July and September.
The mining will operate for at least 14
years: initially, in two underground mines
and then in an open pit. A total of 3.3
million tons of stone will be broken each
year and an on-site processing plant will
be built.
The mine is expected to provide Greenland with revenue of about DKK 4 billion
throughout its service life. The largest
number of workers will be employed in
the 7th year of the mines existence and
it is expected that 423 Greenlanders will
be employed.
The project will require about 50 million litres of diesel per year for operation.
This will emit 507,500 tons of CO2,
almost double Greenlands current discharge of 595,570 tons.
andreas@ag.gl
Oil & Minerals #15
IRONBARK INSIST:
NOT
Our agreement does

include a royalty payment
The zinc mine northeast of Thule
could become Greenlands first
large-scale mine, but the company
responsible for it refuse to pay
royalties. Crazy of Greenland to
demand it of them, says expert
When former prime minister Aleqa
Hammond(Siumut) came to power in
2013 she changed the basis of taxation for mining activities in Greenland.
Whereas, until that point, companies had
to pay corporation tax, if their projects
saw the light of day, they now had to
pay a so-called royalty from day one: a
charge for every kilo they dug out, which
was payable immediately.
All the companies that were in progress had signed exploration licences a
long time ago, which dictated that they
had to pay corporation tax the moment
they started to mine. As with all other
binding agreements, one party cannot
magically change the rules: especially
not, when the other party has already
invested millions of kroner on other
conditions.
At the time, the then naalakkersuisoq
flatly rejected the issue, while holding a
gun at the companies heads through
tough negotiations, which, according to
many observers, were responsible for the
long-awaited mining boom losing steam.
But one of the companies to remain in
Greenland was the Australian Ironbark
Zinc, who are closer than ever to getting started with their promising largescale project at Citronen Fjord on the
Peary Land peninsula in the far north of
Greenland. The project is now in public
consultation and has once again made
the royalty issue topical.
Because the company are sticking
to their original agreement from 2007
before Aleqa Hammond became Prime
Minister.
Crystal clear stance
In the licence terms, which we signed,
there is no demand for a royalty in relaOil & Minerals #15
Jonathan Downes, CEO of Ironbark Zinc maintains that the company will not pay royalty for mining
activities at Cape Morris Jessup on the Peary Land peninsula near the small Citronen Fjord
tion to the Citronen exploration licence,

which we have observed to the letter.
Ironbarks stance has always been crystal
clear. We are working to realise this project according to the current licence conditions and approval procedures, writes
the CEO, Jonathan Downes in an email.
Jonathan Downes will not reveal whether he is prepared to compromise, but he
stresses that the project does not become
easier when subject to extra costs.
Any further increase in the cost of a
project has an impact on the economic
viability and requires evaluation. We will
continue to develop the Citronen project
in close cooperation with the Greenland
Government, writes the CEO.
Knud Sinding, an Associate Professor
at the University of Southern Denmark,
one of whose research subjects is taxation of the mining industry, understands
Ironbarks reluctance to pay royalties,
which he calls a stupid tax.
It has only two purposes: it s easy
to charge and it yields immediate cash.
Basically, Greenlands desire for royalties
was conceived during a period of high
commodity prices, when they saw an
opportunity to raise a stream of revenue
for the National Treasury. Now we are in
a period of extremely poor commodity
prices. And even though the cycle might
change before Ironbark gets started,

Greenlands position as a non-mining
country on the market is, to put it mildly,
poor. It will take at least 20 years, before
they can tighten the screw on the mining
companies, says Knud Sinding.
Impossible to drum up investors
He adds that it may actually be impossible for Ironbark Zinc to drum up investor
capital, if Greenland will not budge.
Royalty is paid, regardless of how
much profit a company has: it is a commission fee. Its fine for the national coffers, because they get money from day
one. But it is worthless for the company,
because they would rather have their
investments written off and make a real
profit before having to pay tax. It could
easily mean the end of the project, if
they insist, because Greenland, especially
North Greenland is so is so close to the
edge that they should have fallen off by
now. You will not attract investors, if the
company has to pay a royalty, and it is
nonsense for the present government to
insist on it. It is completely ridiculous,
says the Associate Professor.
andreas@ag.gl
27
LEIFF JOSEFSEN
Randi Vestergaard Evaldsen: When you have made a decision, we also believe that you have to stick to it
THE DEMOCRATS:
Royalties are Here to Stay

The debate on royalties is back
after Ironbark Zinc maintains that
it will stick to the agreement on
corporate tax
We are waiting to hear what Naalakkersuisut has to say. But of course Ironbark Zinc must follow the rules and laws
for the mineral resources sector, says
Randi Vestergaard Evaldsen.
Now that the royalty tax has become

policy in Greenland, we will stick to it.
These are the words of Randi Vestergaard Evaldsen, the Democrats spokesperson on mineral resources, after the
case of Ironbark Zinc once again revived
the debate on how Greenland will earn
money from mining in the future.
The point is that the company, which
has its lead and zinc project in the northernmost region of Greenland, refuses to
pay royalties. According to the exploration licence, which it was granted by the
Government of Greenland in 2007, it is
only obliged to pay corporation tax. The
final amount will be about the same,
but royalties must be paid before the
company makes a profit, which is poison
during the struggle to raise money from
investors.
Must follow the rules

The Mineral Licence and Safety Authority
have made it clear that they are not satisfied with submitting a royalty-free mining
licence for approval by Naalakkersuisut.
Therefore, they will attempt to negotiate to find common ground. Conversely,
the Authority are also completely aware
that the company have the law on their
side according to the licence, which was
awarded long before there was something called royalties.
If that is what it says, and that is their
statement, then that is what we must
abide by. Now we will have to see what
Naalakkersuisut says. But, of course,
if that is the terms of the agreement,
Naalakkersuisut will have to be satisfied
with that, says the mineral resources
spokesperson.
28
At the same time, she adds royalties

to the list of political issues, in which the
Democrats are administering decisions,
with which the party is not in agreement.
Andreas Uldum, party Chairman and the
then Minister of Mineral Resources, was
totally opposed, when Prime Minister
Aleqa Hammond got the royalties model
implemented.
Has to stick with it
Now that it has been introduced, we
have to work on that basis, so we have
a stable mineral resources sector. If
we continue to move backwards and
forwards, it is hard for the industry to get
going, because it is unstable. When you
have made a decision, we also believe
that you have to stick to it. We were
opposed to it to start with, but there was
a majority in favour of its introduction,
so we just have to accept it, says Randi
Vestergaard Evaldsen.
andreas@ag.gl
Oil & Minerals #15
Kirkegaard:
Reason will
prevail
Jens-Erik Kirkegaard, the former

minister for mineral resources, is
convinced that Ironbark will come
to heel
Naaja Nathanielsen, the IA member
of the Mineral Resources Committee,
emphasises that, in the case of Ironbark
Zinc, the royalty payment is a purely
political matter, because officials are only
doing what they are instructed to do.
Personally she believes that it should be
repealed, instead of forcing it down the
throats of companies, which have been
exploring on the basis of other conditions.
We are an expensive country to mine
in. It is strange to protect royalties while
making a fuss about having to lower
our costs, and given that the option of
charging royalties was already available

before the law was changed. We bring
the subject up whenever we can, but we
are in a minority. The coalition did not
intend to change their opinion on this,
because it has become a sacred cow.,
says Naaja Nathanielsen.
Reasonable for everyone involved
So all we hear is that we must be a
stable land that does not change its
framework conditions all the time. But
it is nonsense, because you would never
hear a bad word from the industry, if we
changed this decision, says Naaja Nat
hanielsn, the IA member of the Mineral
Resources Committee.
Jens-Erik Kirkegaard, the Siumut
spokesperson on mineral resources, who
was the first person to put royalty payment on the agenda in his time, and then
as naalakkersuisoq got it adopted, is convinced that Ironbark will come to heel.

I am sure we can find a sensible solution, as we also did with London Mining.
They did not have royalty payment
obligations either, when they signed their
exploration licence. But we found a positive solution anyway, and I think we can
with Ironbark too. But of course it has
to be reasonable for everyone involved.
Nobody is interested in unreasonable
conditions, says Jens- Erik Kirkegaard.
What happens if they wont?
Then I dont know what well do. I
dont think they will be that inflexible.
We will find a sensible solution, says
Jens-Erik Kirkegaard.
andreas@ag.gl
Jens-Erik Kirkegaard:I am
sure we can find a sensible
solution, as we also did with
London Mining.
Oil & Minerals #15
29
RARE EARTHS By No Means Rare

Mineral resources do not represent
any financial super cure, but the
chemical composition of certain
rare earths in South Greenland
possibly makes them an extremely
valuable resource
First the bad news. Greenlands deposit
of rare earth elements can scarcely mend
the countrys economy.
The price of these mineral resources that
are needed in mobile phones, modern
missile systems and electric cars, has plummeted over the past five years. The deposits of rare earths in South Greenland were
hyped as a countermeasure to Chinas
de facto monopoly, but many other new
mines outside China are in the pipeline.
And then the good news. The exploration of rare earths is increasingly focused
on deposits of silicate minerals contain-
ing rare earth elements with compounds

comprising allanite (aka orthite), eudialyte, fergusonite and cerium. The interest
in these particular compounds is due to
their content of so-called light and rare
earth minerals.
A content that potentially makes them
a highly valuable resource, writes the
National Geological Survey of Denmark
and Greenland (GEUS) in a review of the
potential of rare earths in Greenland.
South Greenland in particular has two
of the largest resources of silicate minerals with rare earth elements.
Available in many places
At present, eight mineral exploration
companies have licences focused on
rare earths: a total of 19 licences in an
area covering a total of 3,200 km2.
Their activities will be closely followed by
GEUS, which records data on Greenlands
natural resources. Their overall evaluation is that none of the mineral resources
in Greenlands subsoil are so rare that
they could turn Greenland into a leading
global producer of any of the mineral
resources in question.
All the mineral resources in Greenlands
subsoil can also be found elsewhere in
the world.
The mineral resources, which industry
finds it difficult to get hold of, and which
are essential for manufacturing, are
called critical. The list of them changes
all the time in line with technological
development, global demand and market
adaptability. In recent years, there has
been a lot of media attention on rare
earths. The name is confusing, because
actually we are not talking about a
group of metals, which are rare. In fact
there are deposits in several places in the
world. The question is simply whether
FACT
Rare earths
Rare earths consist of elements in
the periodic table from No. 57 (lanthanum) to No. 71 (lutetium). 13 of
the elements have magnetic properties, but neodynium has so far been
most attractive for industry. Along
with iron and boron, the elements
provide the strongest permanent
magnets.
In these magnets you combine the
high magnetic strength of iron with
the capacity of rare earths to maintain the direction of the magnetisation, said Niels Hessel Andersen
to Videnskab.dk. He is a scientist
at Ris DTU and specialises in such
areas as rare earths.
In recent years, the potential of
Greenlands rare earths has been
attracting interest and has led to
a situation, where the resources
we know of in Greenland have
increased from 10.4 megatons
of total rare earths oxide to 38.5
megatons in 2015.
Chinas known reserves of rare
earths amount to 55 megatons,
while the reserves we know about
outside China are 85 megatons.
GMEs mining project in Kuanersuit includes uranium, zinc and rare earths. Here, staff are examining
a core drilling from the controversial mountain. Photo: GME
30
Oil & Minerals #15
Rare earth elements

are found all over the
world, but the current
production, which
is indicated graphically with squares, is
associated with China,
India, Australia, Russia
and the United States.
Greenlands deposits
are distinguished by
their size and the ratio
of light and heavy rare
earth elements. Graphic: British Geological
Survey 2011.
a deposit is commercially large or fine

enough, or easy enough to process, to
make mining it worthwhile.
The state geologist Karen Hanghj
works in GEUSs Petrology and Ore Geology Department. The principal activity of
the department is to help the Government of Greenland develop a sustainable
mineral industry. On a previous occasion,
she pointed out to Sermitsiaq that rare
earth elements are embedded in the
earths crust in about the same concentration as, say, copper. That makes these
earth metals rarer than aluminium, but
less rare than gold.
In Greenland there are particularly
high concentrations of rare earths, for
example, in Killavaat Alannguat, Kuannersuit and Sarfartoq. According to
GEUS there are also deposits of rare
earth metals in other places in the world.
Technology Metals Research estimates
that there are maybe about 40-50 of
these projects, which are so well-surveyed and advanced that they corre-
spond to the deposits in Greenland.

Enjoying a monopoly status
Three or four years ago, rare earths figured high on many lists of critical mineral
resources.
The fact that rare earths were on these
lists is due to the fact that, since the mid1980s, China has mined and processed
them almost exclusively.
The West was happy to get rid of the
environmental problems related to mining, and it was cheaper to let China deal
with the mining of these metals. But, in
recent years, China needed the very same
metals for the countrys own factories.
This led to an attempt to initiate or
reopen rare earth mining projects in the
likes of Australia and the United States.
By Mads Nyvold
Rare earths are particularly useful for the

production of the likes of liquid crystal displays,
electric cars and mobile phones. Photo: LG
Oil & Minerals #15
31
Australian miners taking a pause from exploration.
With a little help from
DOWN UNDER
Greenlanders looking to find a way

to help young people find work are
taking their cue from a programme
for Australians
Greenlands economic future is tied up

with the mining industry. Right now,
there are no mines in operation, but by
2018, as many as five operations could
be up and running, according to the SelfRule authority. The first of them, a ruby
mine, is expected to come on-line no
later than early 2016.
Their contributions are sorely needed
for an economy facing what is known locally as the jaws of death: increasing outlays to an ageing population while overall
economic activity is on the decline.
In order for Greenland to take full
advantage of the mining industry or of
any new development for that matter it
must make sure that there are jobs for
Greenlanders, and that there are Greenlanders for those jobs.
One way to do that, according to
Kuupik Kleist, a former premier, will be
to look south, to Australia. There, a programme combining job training and so32
cial programmes has succeeded in raising

the number of young indigenous Australians working in the mining industry.
The programme gets young people
working by finding them a job, but also
by working with young people to find
out what is necessary in order for them
to hold on to a job, says Mr Kleist, who
currently serves as consultant for Tanbreez, an Australian firm that is seeking
to mine rare earths in Greenland.
Same social issues
The Australian effort is funded in part by
the money set aside in 2014 as part of
the national reconciliation process. The
A$45 million ($32 million) funds privately
run initiatives that seek to address some
of the problems that prevent young people from finding work, including helping
with personal issues, such as alcohol and
drug abuse, or providing basic training,
including arithmetic and driving (see
video at end of article).
Australias aboriginal population shares
many of the same social issues as people
in Greenland, and if the programme can
work there, Mr Kleist reckons, it should
also be able to work in Greenland and
other Arctic territories.

One of the firms that the programmes
boosters in Greenland hold up as an
example of its merits is Fortescue Metals
Group, which employs 13% aboriginal
Australians through a programme known
as Vocational Training and Employment
Centres. (Nationally, the group makes up
3% of the population.)
1000 unemployed young people

They take people in and they tell them
theyll be hired, if they complete training
for a position that a mining project needs
to fill. Doing it that way makes sure that
people get trained for a job that will be
there when they are done, and the company secures the stream of employees it
needs, Mr Kleist says.
But time, he warns, is getting short
if Greenland is to hope to have people
ready to work by the time the mines become operational. Training, however, will
not be enough to land jobs: experience
shows that foreign-owned mining firms,
which all of those active in Greenland
ultimately are, primarily hire foreign
employees.
We have 1,000 young people who
Oil & Minerals #15
arent working, and many of them due

to social problems. We need to find jobs
for them, but we also need to help them
hang on to the jobs once they get hired.
Ageing population
There is a second reason for helping
young people find work, and then giving
them a hand to stick with it: Greenlands
ageing population. In 25 years, the work
force is projected to shrink by 25%, at
the same time as the number of people
drawing a pension will rise.
Thats a lot in a Greenlandic context,
Mr Kleist says. Waiting for the traditional
educational system to catch up will take
two, three or even four generations to
catch up. We dont have that much time.
While the Australian experience is
similar to conditions in Greenland, there
are significant differences. One of them
is language: currently Danish is the first
second-language, and often the language of job-training. Some suggest
English should overtake that role, or
that more effort be made to offer programmes in Greenlandic.
Lots of experince to be gained from down under. Photo of The KCGM Super Pit The Goldfields is
the largest gold producing region in Australia.
Internet and distance learning

Another is how to recognise the informal
skills young people possess. This was
the topic of a meeting today in Nuuk
that gathered firms, lawmakers and
young people themselves to discuss how
this could be done. Better internet and
distance learning and more internship op-
portunities were amongst the suggestions.

Also brought up was the fact that
helping young people become an adult
sometimes requires speaking to them as
young people.
By Kevin McGwin
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Oil & Minerals #15
33
Cattlefarmer Sofus Frederiksen: No one

wants to buy meat from a place located
next door to a uranium mine.
Finishing
Touches
to Uranium Mine
In 2015 Greenland Minerals and
Energy were working to complete
their application to the Government
of Greenland for the mining of rare
earth metals, zinc, fluorine and
uranium at Kvanefjeldet in Narsaq
GME have been working intensively on
the Kvanefjeld project since 2007. They
have conducted both feasibility studies
at an altitude of six hundred metres and
profitability studies.
In late 2015 they put the finishing
touches to the societal and environmental studies.
The Government of Greenland must
first assess whether all the material
meets the requirements. When everything is ready, the materials can be sent
for consultation.
The most controversial issue is the
minerals that contain uranium.
Were talking about 350 grams per
1 ton of rock, explains Johannes Kyed,
GMEs Head of Social Responsibility.
GME have calculated that 10-15% of
34
the revenue will come from the actual

uranium. About 80% of revenue will
come from the rare earth metals.
Construction
Kvanefjeldet is located at the bottom of
Narsap Ilua around 7.5 kilometres from
Narsaq. The plan is to construct a harbour close to the town next to the waste
tip, which will be cleaned. They will also
construct one road to the harbour and a
closed road out to Kvanefjeldet.
The actual site of the mine will be
fenced for security reasons, says Johannes Kyed.
One of the things that the citizens of
Narsaq are talking about is how the dust
from the mine can be kept away from
the town. Johannes Kyed insists that everything will take place in a closed, wet
circuit. They will use water in summer
and salt in winter to bind the dust. Tailings from the production will be transported in a four-kilometre-long pipeline
and discharged into Lake Taseq. The plan
is to make a dam round the lake to create natural discharge into the ocean.
The tailing will precipitate and in the

course of the years will finally become
very hard. He explains that it will constantly be covered by five metres of
water, and the water will be recycled.
For many years now, GME have been
measuring wind, weather and dust with
the help of monitoring stations, so-called
weather stations, located in three different sites in Narsaq. They have also established a station at the top of Kvanefjeldet
to measure pressure, temperature and
humidity.
GME have also set up stations in four
streams to measure water flow and
temperature. They also have a High Volume Dust Sampler at a house in Narsaq,
which collects dust in the air.
Cattle farm on the road
Located midway on the road between
the town and Kvanefjeldet is Suka S. and
Sofus Frederiksens cattle farm.
They have a stock of 130 cattle and
have right of use to a large area of land,
which also includes Kvanefjeldet. The
couple support the idea of a mine on the
Oil & Minerals #15
mountain, but have decided to relocate

their farm for the sake of their buyers, if
the mine opens and they can afford to
do so.
Johannes Kyed acknowledges that the
farm will be affected if the mine opens.
But that wont be because of dust
fact that the couple have been offered

between DKK 20 and 30 million by GME
to relocate the farm.
The couple refute the rumours, but
hope to receive subsidy if they have to
relocate.
There is nothing in the rumours. But
No one wants to buy meat from a place

located next door to a uranium mine,
says Sofus Frederiksen
from the mine, but because of heavier

traffic to and from Kvanefjeldet, he says.
There is also a river running through
the farm. However, according to GME,
the water will not be further polluted,
even though it contains a natural deposit
of uranium-rich minerals.
It will still be possible to use the grass
in the fields as fodder for the cattle.
Part of the local debate focuses on the
I can say that societal studies will include

all possible impacts, including that on
agriculture, says Johannes Kyed.
Narsaq split in two
The Kvanefjeld debate has also been on
the minds of the people of Narsaq for
some time, and not everyone regards
Kvanefjeldet as a new source of income.
So far 200 locals have joined the local
association, Uraani Naamik = No To

Uranium.
GME find it hard to assess why it is so
hard to convince the opponents. But Johannes Kyed is certain that the number of
local people, who do not consider it necessary to make up their mind about the
projects, is greater than the number of
supporters and opponents put together.
It may be that the reason theyre
saying nothing is because they dont see
anything dangerous in it, he says.
GME have also been criticised by the
opponents for presenting the citizens
with overly technical information. But
GME believe this to be necessary.
It has to be, for the sake of credibility
and to ensure the quality of the studies.
But we are always open to discussion,
if anyone wants it. We have nothing to
hide, emphasises Johannes Kyed.
By Thora Nielsen
thora@sermitsiaq.gl
Business in Greenland
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With 25 years of local Presence, and experience in the country, GRK possess a
thorough knowledge of the special conditions in Greenland, where we service
our clients within many fields
Look us up at www.grk.gl
Oil & Minerals #15
Imaneq 18, P.O.Box 319 3900 Nuuk Greenland

T: +299 32 31 33 info@grk.gl www.grk.gl
35
Uranium Mountain Will
CHANGE
Their Lives
Narsaq is waiting anxiously for a

new mine. It carries great hopes,
but also great fear
DKK 2 billion, of which only a limited

amount, however, would end up in local
pockets.
From the helicopter one can see the expanse of Skovfjord with its turquoise waters and rocking icebergs, like a floating
sculpture park. No Renaissance painter
could have created more stunning shapes
and colours.
We are on our way to Narsaq and
Kvanefjeldet, which could turn Greenland into the fifth largest producer of
uranium in the world: larger than Russia
and larger than the United States and
China combined. Only the uranium
mines at McArthur River in Canada and
Ranger in Australia are bigger.
The radioactive material is only an
added bonus for the Australian mining company, Greenland Minerals and
Energy (GME).
The rare earths are really interesting.
This is a group of metals, which are
used in mobile phones, laptops and the
aerospace industry, and Kvanefjeldet is
crammed with them.
According to the mining company, the
mine could yield an annual turnover of
Through the double bed

The helicopter starts to land on the
outskirts of the town. The low sun shines
on the picturesque, almost 100-year-old
church and the quintessentially green,
700-metre-high mountain, Qaqqarsuaq,
towering behind the town.
On a day such as this, it is easy to
understand why it was in this very place
that the poet-cum-priest, Henrik Lund
drew inspiration to write the national anthem, Nunarput Utoqqarsuanngoravit.
But the picture-postcard perfection
is deceptive. During these weeks and
months, Narsaq is a divided town. It is
the issue of uranium that is so divisive.
Like a ghost it floats through the streets,
through company canteens. Yes, even
into peoples living rooms and bedrooms.
Depending on the point of view, the
mountain rises like a threat on the horizon (seven or eight kilometres east of the
town) or an alluring promise of a golden
future, which could transform this sleepy,
struggling town into an explosive centre
of growth.
Is it now or never? Narsaq is very much in need of the financial injection, which the mine would
provide. But many people are afraid of the consequences for themselves and their children.
36
While some people want the mine,

they are also scared that it could run out
of control.
Actually my main concern is that we
will be struck by gold-digging fever. I am
a keen supporter of the mine in terms
of activity in the town, but I am also
worried that it will change everything.
Whether well turn into a new Klondike
with drinking, troubles and far too much
easy money, says Esben Thordahl, who
arrived in Narsaq 23 years ago.
The former principal of the Inuli food
technology college today runs a restaurant and caf in the town and has
a natural interest in the development,
which mining might bring. But he is not
just thinking of his own business.
There are many people struggling to
pay their bills. There is a lot of despondency and many young people are fleeing
the town out of desperation. Thats why
we need the mine. We cant make a
living from being a tiny, isolated paradise
with three months of tourism each year,
Oil & Minerals #15
NIELS OLE QVIST
Many people who are fit for work leave Narsaq

in search of fortune elsewhere. The supporters
of the mine hope that this trend will be reversed
when mining begins. The opponents fear the
consequences for agriculture.
says Esben Thordahl, adding that the

decision should not be made too hastily.
After all, the mining company is not
here to make Greenland greener, but to
make money.
A long way to Nuuk
There are three sounds, which any visitor
to the town immediately notices. Lambs
braying. Inebriated people (one evening)
shouting hysterically and insistently at
each other. And then the almost monumental silence.
On the Wednesday a local hiker loses
his way venturing too far up on the
mountain behind the town. The rocks
are wet, it is steep and slippery, and five
fire fighters armed with mountaineering
equipment are despatched to rescue him.
It is the weeks most spectacular event.
Many people can only manage a shrug
in response to all the fuss in the capital, when talking about uranium. Some
people in the town call the politicians
spoiled brats.
Oil & Minerals #15
They dont know what theyre talking

about up there. They only think of looking after number one. As far as theyre
concerned, the mine could just as well
be located on the moon. We dont figure
in their thoughts, says a middle-aged
woman.
More knowledge
In the towns radon-affected school, the
photographer John Rasmussen is in a
run-down classroom, busily framing photographs. The 69-year-old photographer,
who has lived half his life in Narsaq, is
organising an exhibition of his shots.
With their mixture of portraits, weird
landscapes and sports events, the selected images tell a comprehensive story
about a life of good and bad (mostly
good!) in Narsaq.
The ice out on the fjord is a major
theme. It is allegedly more beautiful at
Narsaq than anywhere else in Greenland: bluer, more transparent, and more
luminous. The icebergs and the nature
are one of the major tourist attractions.

But will the tourists continue to come, if
the town becomes famous for housing
the second largest uranium mine on the
planet?
In my opinion, how the mining company intends to approach the work is an
absolutely vital issue. Either theyll make
a factory where they mine everything. Or
theyll also crush it and load it on to ships
and sail it away. Before we know what
the mining company is planning, its
impossible to imagine the consequences
and say yes or no to the mine, says
John Rasmussen.
He does not fall for the most ardent
arguments of either the opponents or
the supporters.
A great many people have become
total converts in this town. Theyre either
wholehearted followers or the opposite.
The arguments are totally lost on them,
he says.
Niels Ole Qvist
qvist@ag.gl
37
Uranium
opponents look to other
sectors for job growth
Opponents of uranium mining
in southern Greenland have put
forward a list of proposals they
believe can create jobs and in the
process make a highly contested
mine unnecessary
In the town of Narsaq, on Greenlands
southern tip, debate is coming to a head
over whether residents can make do
without a near-by mine that will create
jobs, but which some fear will make the
town unliveable.
The concerns come as Greenland Minerals and Energy, an Australia-based mining outfit, closes in on final approval to
begin production rare earths, a mineral
vital for use in modern technologies.
Proponents say the mine, located on a
plateau some 10km outside the town of
1,500 will create jobs that can be filled
by its 200 or so unemployed. But in order to extract rare earths, GME will also
need to mine uranium as a by-product,
and that has raised fears, particularly
among farmers, sheep farmers and those
making a living off tourism, that dust
from the open-pit facility will taint the regions soil and water, and in the process
spoil the regions image.
Instead representatives from Urani
Naamik, an anti-uranium group, together
with IA, the main opposition party,
have put forward 17 proposals they say
could help to stimulate job growth in
other sectors of the economy, including
agriculture, fishing and bottling of glacial
meltwater.
Against uranium mining
Until 2013, mining uranium in Greenland
was explicitly banned. A law change
opened up the possibility for such operations to be approved, but the issue
remains divisive.
Were told that without a mine out at
38
Kvanefjeld, Narsaq will die. We say that

Narsaq will die if the build a mine it will
kill Narsaq, Mariane Paviasen, a Urani
Naamik representative, said in April.
Union leaders, who support the establishment of the mine, say they understand peoples concern, but suggest that
much of it is groundless.
Weve met people in Canada that
work in uranium mines and they were
grateful for the jobs the mines created,
says Jess Berthelsen, the head of SIK, a
union. Canada has been mining uranium since 1956 and they have got to the
point where they can mine uranium in an
environmentally responsible manner.
Another criticism of the Kvanefjeld
mine is that GME intends to dump
tailings, a miners term for unwanted
material, into a lake close by the facility.
Berthlesen defends the process, calling
it the best way to protect the surrounding area against possible radiation from
the tailings.
Wants independent study
Urani Naamik, however, wants an independent study looking into the mines
environmental impact to be conducted.
Bertelsen feels such as study could be
useful, provided it was not carried out as
a pretext for rejecting the mines benefits.
Theres nothing wrong with being
against uranium mining, Berthelsen
says. You just need to let people know
thats where you stand.
By Kevin McGwin
Jess Berthelsen, the head of the workers union

SIK: Weve met people in Canada that work in
uranium mines and they were grateful for the
jobs the mines created,.
New jobs
for Narsaq
A list of propsals uranium mining
opponents believe could lead to job
creation in Narsaq
- Year-round fish processing
- Production of fish powder using
fishing industry waste
- Meatpacking
- Chicken farming and egg production
- Commercial fishing using modernised vessels, purchased with public
investments
- Duck and goose farming
- Development of new food products, together with the local meatpacker, fish processing plant and
cooking school
- Hothouse farming
- Harvesting of aquatic plants
- Production of lambswool
- Producing preserves and juices
from wild berries
- Import of consumer goods for local
resale
- Colleting and selling scrap metal
- Bottling glacial meltwater
- Honey production
- Establishment of a music school in
Narsaq
- Production of smoked fish
Oil & Minerals #15
Dont
take our word for it

Greenlands most talked-about
mining project could be approved
in 2016. Its boss understands if
people are worried, but is
confident the data will put them
at ease
If it turns out that rare earths and
uranium can be safely mined from the
Kuannersuit, in southern Greenland,
then Greenland Minerals and Energy,
an Australian firm, is ready to apply to
begin operation eight years after it
first began exploring the area, said John
Mair, the GME managing director in
connection with the release of the firms
quarterly report.
A feasibility study shows the mine
would be profitable, and it would mean
jobs and income for the country. Many,
though, are concerned about its environmental impact; opponents have repeatedly demonstrated against the mine,
particularly out of concern that radioactive dust kicked up by the uranium the
firm will extract as a by-product of the

rare-earths mining will make the area
unliveable.
GME estimates that Kuannersuit could
be operational for 37 years, though two
adjacent areas could hold as much as a
billion additional tonnes of rare earths,
which would extend the mines lifespan
considerably.
If all goes according to the firms
timetable, construction of the mine
could start as early as 2017, but, Mr Mair
points out, the actual date depends on
the approval process.
Keeping pollution to a minimum
The environmental and social-impact
studies are expected in to be completed
in the coming months, and Mr Mair
understands that the possibility of the
mine opening is making people in the
area nervous.
But were doing what we can to
keep pollution to a minimum, he says.
Were convinced that farming, fishing
and all other economic activity will be
able to continue as normal after production starts.

In addition to the presence of radioactive dust, critics are also worried about
GMEs plans to deposit tailings, the
unseable material left over after valuable
minerals are extracted, in a lake near the
mine. Mr Mair, however, notes that anything deposited into the lake will have
come from the area. Were not adding
outside pollution, he says.
Getting the mine approved requires
proving that it does not pose a health
or enviromental risk. Once approved,
according to Mr Mair, the firm would
continue to conduct regular monitoring
of the area. He suggests that concerned
residents do the same, so they can see
for themselves whether pollution measurements increase.
Maybe the best thing is for people
not to trust the companys monitoring.
By Poul Krarup
Farming and cattle is an important business in southern greenland.

Oil & Minerals #15
39
Siumuts Wavering Delays
Uranium
Mine
Greenland Minerals and Energy
had high hopes of submitting
an exploitation licence
application in mid-2015
In the summer of 2015, officials at the
Mineral Licence and Safety Authority
were supposed to be busy tackling a
controversial application.
An application, which opponents fear
will destroy South Greenlands nature
and contaminate the environment for
thousands of years. An application,
which supporters hope will create loads
of new jobs and pave the way for a
brand new export product.
But the officials did not receive any application for the exploitation of uranium,
zinc and rare earths in Kuannersuit. The
Australian company, Greenland Minerals and Energy had led investors and the
general public to believe that it would be
submitting the application in late 2014
or early 2015.
The moment was postponed.
Of course, delays are generally frustrating, said John Mair, CEO of Greenland Minerals and Energy.
Delays can reduce confidence on the
part of potential partners. But, in terms
of the projects funding and debts, it
can be considerably more problematic.
We are by no means at that point yet,
declares John Mair.
A significant uranium exporter
Greenland Minerals and Energy (GME) has
invested half a billion kroner in the Kuannersuit mining project near Narsaq. The
total investment required is in the order of
DKK 11 billion at the current rate of the
40
US Dollar. The figures should be treated

with caution, since the final amount
depends very much on the agreements,
which GME manages to make.
In the hunt for wealthy, prospective investors, the exploitation application, the
authorities and Naalakkersuisuts possible
endorsement of it, play a major role.
Because, with an exploitation licence in
hand and the start of the approval process, the sales pitch sounds more serious,
when it comes to netting the necessary
DKK 11 billion.
As part of the financial strategy, it is
important to get customer agreements
for key products in place. But this is difficult to do until we are sure of getting
approval and can establish a timeline for
when products and quantities can be
supplied, John Mair told Sermitsiaq in
August 2015.
Paradoxically, the reason for the delayed exploitation application is closely
linked to the reason for the fact that, in
just two years, GMEs much discussed
Kuannersuit project went from being a
pipe dream with an impossible premise
to being an ambitious, but also feasible
mining project.
On 13 March 2013 Aleqa Hammond
appeared on the stage of a packed Godthb Hall waving a Siumut flag. She was
celebrating a record-breaking election
and the fact that Siumut had recaptured
power from the anti-uranium IA.
That same year, a few months later on
24 October, Siumut repealed the 25-yearold old zero tolerance of the mining of
minerals with a higher level of radioactivity than normal background radiation.
The repeal was adopted with a majority
of just one vote.
This decision will pave the way for

Greenland to exploit its rare earths and
to become, in the not so distant future,
a significant uranium exporter: potentially one of the top ten, even top five
uranium exporters, proclaimed Aleqa
Hammond, former leader of Siumut.
Zero tolerance had been a spanner in
the works for GME. Because, as long as
zero tolerance remained in force, GMEs
licence in Kuannersuit was actually useless. Such is the mineral deposit in the
controversial mountain near Narsaq that
if you dig up zinc or rare earths, you cannot avoid digging up uranium too.
The advent of the uranium coalition
With zero tolerance out of the way,
GMEs staff could seriously roll up their
sleeves and start work on the necessary
reports on the environmental and societal consequences of a mine at Kuannersuit, followed by the crucial exploitation
application.
But the work came to an abrupt halt
on 28 November 2014. For the second
time in less than two years, once again
Greenland had to take to the polls.
Shortly before, a dramatic event had
taken place. When she toddled up to the
Inatsisartut chamber for the opening of
Oil & Minerals #15
GMEs CEO:
POLFOTO
Even more
important
to meet
deadlines
the autumn session, Aleqa Hammond

was under police escort. She was booed
by members of the public, who were seriously disgruntled with the fact that she
had been making use of the Treasury as
an overdraft facility for private expenses.
The decisive factor was when two of
Siumuts MPs chose to resign.
The coalition was dissolved. Today
it has been replaced by the so-called
uranium coalition: Siumut, Atassut and
Demokratiit. Their policy is fundamentally different. Previously, Demokratiit in
particular never missed an opportunity to
accuse Siumut of nepotism and of consistently pursuing a destructive, irresponsible economic policy.
But there is a single topic, on which
the two parties agree. Chemical Element
Number 92. One of the worlds heaviest
and energy-rich metals. Uranium.
Siumut, the Democrats and Atassut
believe that Greenlands mining industry
should be allowed to mine this element.
So, even though the subject of uranium
and the mining industry were almost
absent from the election campaign, it
was mineral resources, and specifically
uranium, that determined the composition of Greenlands present Government.
Oil & Minerals #15
Aleqa Hammonds major electoral victory in

2013 not only paved the way for mining at
Kuannersuit, it also delayed the very same
project.
Cancellations and delays

The composition of the new Government
of Greenland was good news for GME,
but even so, the election has had negative consequences for the Australians.
The 2014 election led to delays in
the Governments work on the regulations, which need to be in place before a
Kuannersuit application can be accepted.
When the election was called, this work
was put on hold. Work with Denmark on
uranium regulations was also halted. The
Government of Greenlands presence at
international meetings on mining were
cancelled, and there was uncertainty
about how a new government would
act, says John Mair, CEO of GME.
Another delaying factor has been current Governments demand for GME to
hold public pre-consultation meetings.
Their purpose is to include, and increase
public interest.
By Mads Nyvold
The Australian company, Greenland Minerals and Energy needs to

scrape together about DKK 11 billion to open a mine at Kuannersuit.
Investors are in no doubt
about the value of the project, but
political stability and tight timelines
will be increasingly important as
we move towards the exploitation stage, and there will be more
emphasis on ensuring the projects
funding, says the CEO, John Mair.
In this respect, he acknowledges that it would of course have
been desirable for GME to submit
an exploitation licence in late
2014 or early 2015, as previously
announced.
Investors regard unexpected
changes to rules and regulations
negatively. Such changes lead
to uncertainty. Of course it is a
major source of concern for investors, and that creates a sense of
instability, says John Mair who
praises the current Government of
Greenland.
They were quick to emphasise
and guarantee the importance
of a stable backdrop for foreign
investment. This is important
to, and appreciated by all mining companies. The reality is also
that Greenlands provisions and
regulations have had to evolve
very quickly in recent years. Quite
a few projects have encountered
delays, notes John Mair.
41
Debate on Zero Tolerance was
UNNECESSARY
New research confirms that

Greenland never adopted
zero tolerance. Accordingly,
Inatsisartut did not need to
repeal the ban on radioactive
mineral resources in 2013
The repeal of zero tolerance of radioactive mineral resources, which Inatsisartut
adopted with a one-vote majority in the
2013 autumn session, still creates division in Greenlandic society.
But the destructive debate was unnecessary.
New research conducted by Gry
Thomasen of the Danish Institute for
International Studies, including in the
Danish State Archives, confirms that
Greenland never adopted zero tolerance of uranium and other radioactive
mineral resources.
The finger points at the Joint Council

The Joint Council for Mineral Resources
in Greenland is key in the debate on zero
tolerance of radioactive minerals.
The Joint Council was active from 1
May 1979, when home rule government was introduced, to 1 January 2010,
when the Government of Greenland
assumed control of the mineral resources
sector. The Joint Council consisted of
five Danish and five Greenlandic politicians and a chairman appointed by the
Queen. The first chairman in 1979 was
Jonathan Motzfeldt of Siumut, while the
last chairman in 2009 was Kim Andersen
of Venstre.
The Joint Council followed developments in the mineral resources sector in
Greenland and gave recommendations to
Greenlands home rule government and
the Danish government on fundamental issues relating to mineral resources research,
and specific recommendations on licences
for feasibility studies, and the exploration

and exploitation of mineral resources.
In the last decade and a half, a myth
emerged that in 1988 the Joint Council
had adopted zero tolerance of radioactive mineral resources.
In 2008, the then Minister for Mineral
Resources, Kim Kielsen (Siumut) presented
a report about uranium to the Landsting:
While drafting the report, it became
clear that there is a lack of updated
knowledge of the potential of uranium in
Greenland. This is a result of the political
decision taken in 1988, stating that radioactive elements should be excluded from
all licences for the exploration and exploitation of minerals, said Kim Kielsen.
Ever since, it has been a political truth
that in 1988 Greenland adopted zero
tolerance.
No decision
The researcher, Gry Thomasen of the
After a long and emotional debate on 24 October 2013, Siumut and Atassut voted to repeal zero tolerance of radioactive minerals, though it had never
been adopted. Note that Hans Enoksen (Siumut) voted against the repeal along with Inuit Ataqatigiit, the Democrats and Partii Inuit. The repeal was
adopted with a majority of just one vote.
42
Oil & Minerals #15
FACT
Guess a year
The 4th edition of the information
booklet on the mining of uranium
in Greenland was written by the
geologists, Per Kalvig and Karsten
Secher of the National Geological
Survey of Denmark and Greenland
(GEUS) and the chemical engineer,
Gert Asmund of the National Centre for Environment and Energy. The
first two editions (2010 and 2012)
state: since 1985, current practice
in Greenland has made it impossible
to look for, or mine uranium. The
3rd and 4th editions state simply
that Inatsisartut repealed zero tolerance in 2013.
Historical protests, as politicians opened the autumn session, which resulted in a repeal of the ban on
the mining of uranium-bearing minerals.
Danish Institute for International Studies (DIIS), was also puzzled about the
issue of zero tolerance, so dug into the
archives, including the Danish State Archives, to get to the bottom of this story.
In 1988, the Joint Council for Mineral
Resources in Greenland met twice. But,
according to the minutes of the meetings, there was no recommendation for
the introduction of zero tolerance, says
Gry Thomasen.
Last week, at a seminar on uranium in
Nuuk, she presented the results of her
research.
In 1986 and 1988, the Joint Council
recommended the award of exploration
licences to three companies to conduct
explorations in an area at Sarfartoq [English: Paradise Valley] in Kangerlussuaq
Fjord. One of the targets of the exploration was niobium, of which uranium is a
by-product. In 1990, the 1989 exploration licence was extended.
The Joint Councils 1988 and 1989
annual reports reviewed these licences
and the Councils recommendations, but
there is no mention of a fundamental
decision or recommendation for zero
tolerance, says Gry Thomasen.
In fact, according to the minutes of
the meeting on 20 October 1988, the
chairman of the Joint Council, Jonathan
Motzfeldt, stated that both the niobium
deposit in Sarfartoq and other mineral
deposits in Greenland ether contained
or were found together with various
degrees of uranium.
Oil & Minerals #15
No one in this country wishes to

exploit uranium, or to pollute the environment with radioactive substances,
but radioactivity is part of nature, said
Jonathan Motzfeldt.
30 years ago, the political tendency was
to say no to uranium as a main product,
but yes to uranium as a by-product.
The Home Rule Government is opposed to uranium mines, but we find no
basis for a fundamental rejection of projects, of which uranium is a by-product,
stated Jonathan Motzfeldt in 1988.
And in Kvanefjeldet at Narsaq uranium
is a by-product, not a main product.
Go to the Danish State Archives
During all the years, the government officer, Gert Vigh was head of the secretariat of the Joint Council. That makes
him the only person in the world to have
attended all the Councils meetings.
The Joint Council never adopted zero
tolerance of radioactive minerals, said
Gert Vigh to Sermitsiaq.
The Joint Council played an advisory
role for the Home Rule Government and
the Danish Government, so there is no
way that the Council could make a political decision, on their own, to introduce
zero tolerance.
I do not recall the Joint Council at
any point discussing zero tolerance, but
the Councils files can reveal that, said
Gert Vigh.
For the first two decades of its activities,
the Joint Council was rooted in the Dan-
Where does the year 1985 come

from?
You have asked a question, which
has been asked before, but I have
never been given the definitive answer, said Per Kalvig to Sermitsiaq.
Presumably zero tolerance was
introduced as a practice in the
administration at that time. In other
words, not a law. But, of course,
politically you can relinquish a
practice.
Youll have to ask people other
than us three about this situation,
if you want the best answer, said
Per Kalvig.
ish Energy Agency, after which the Home

Rule Government assumed the management of mineral resources in 1998.
The files of the Joint Council are located in the Danish State Archives, where
they are part of the Mineral Resources
Administration for Greenland. They are
also part of the Danish Energy Agencys
journal files, said the archivist, Michael
H. Gelting to Sermitsiaq.
In accordance with the regulations of
the Archive Act, the records are available
(20 years for ordinary material, 75 years
for cases affecting the private circumstances of individuals or private companies).
By Kurt Kristensen
kurt@sermitsiaq.gl
43
REMEMBER
Our Memory
That means biting ones tongue,
if Greenland wants to export
uraniumThe institutional memory
of the Danish Realm is weak,
notes the researcher Gry Thomasen
of the Danish Institute for
International Studies.
After an embittered debate, Inatsisartut
repealed zero tolerance of radioactive
minerals in the 2013 autumn session.
But the research of Gry Thomasen, a
researcher at the Danish Institute for
International Studie, confirms that the
Joint Council for Mineral Resources in
Greenland definitely did not introduce
zero tolerance in 1988:
The lack of memory led to an unnecessary debate, which still divides the
people of Greenland and causes difficulties between Naalakkersuisut and the
Danish government. The vote in Inatsisartut two years ago paved the way for
mining, in which uranium is included as
a by-product. That makes Greenland a
uranium-exporting country and places
demands on Greenland and the Danish
Realm that are very different from the
export of prawns and rubies.
A clear policy
In Nuuk, Gry Thomasen, presented her
findings.
Uranium is important for both nuclear power and nuclear weapons, so

states, which decide to mine and export
uranium, must have a clear policy: partly
to prevent uranium from falling into the
wrong hands, says Gry Thomasen.
A clear policy is based on an institutional memory, solidly rooted in previous
decisions and the reasons for making
those decisions.
The history of zero tolerance emphasises that together Copenhagen
and Nuuk must develop a clear nonproliferation policy and strong control of
Greenlands uranium export, says Gry
Thomasen.
Learn from history
Greenlands collective memory, even
about events in our time, is like a sieve.
At each election, major changes occur
in the parliamentary chamber and every
transatlantic flight brings a new batch of
enthusiastic lawyers and economists on
short visits to the central administration.
In many newsrooms sits a dinosaur surrounded by newly trained journalists.
While the debate on zero tolerance
is still in their memories, Denmark and
Greenland must learn from history, says
Gry Thomasen.
By Kurt Kristensen
kurt@sermitsiaq.gl
Danish hold on Greenlands uranium

The change in the law, which the Danish Government is predicted to make in
February to introduce export control of
Greenlands uranium, will reopen the
debate about the actual extent of the
Government of Greenlands jurisdiction.
The people of Greenland cannot
determine their own foreign policy.
In that area, Denmark has the final
say, says Lars Hovbakke Srensen, a
44
part-time Associate Professor at the

University of Copenhagen.
Nonetheless, the bill will be passed in
February. Lars Hovbakke Srensen estimates that this will be a bill to ensure
that Greenland does nothing on its own
that would make it difficult for Denmark to comply with its international
obligations.
It is definitely an expression of
Denmarks wanting to have complete

control of what goes on in Greenland,
so that other powers do not sign
agreements with Greenland that could
make problems for Denmark. After all,
Denmark is responsible if Greenland
does anything that might be at odds
with the international obligations of
the Danish Realm, says Lars Hovbakke
Srensen.
Oil & Minerals #15
LEIFF JOSEFSEN
At the latest Nunaminerals AGM, Naalakkersuisut handed over the company to the British financier. At the front to the right, wearing
glasses, we see Patrick Newman, who now heads the company.
Expert:
THE TAKEOVER
of Nunaminerals is a Creative Tax Move

When an English investor spends
more than DKK 10 million on
saving Nunaminerals, he is
actually purchasing a deficit of
DKK 100 million, from which he can
deduct earnings, claims an expert
Nunaminerals, another firm that got
tripped up by financial troubles, remains
an active firm, but only just. It was bailed
out, but questions remain about the aims
of its new British owner.
With the restructuring of Nunaminerals, what Greenland Mining Management (GMM) and its backer, Patrick
Newman have mainly acquired is a huge
tax perk.
That is the opinion of Jesper Ilse of
Praetorian Research, one of the few
people in Denmark to keep a regular eye
on the stock: partly to provide guidance
for private investors.
Not interested in rocks
He thus denies that the British backers
Oil & Minerals #15
main interest is licences or the drill samples, of which the company is in possession. It would be possible to purchase
the licences much more cheaply than the
DKK 10 million the restructuring would
cost, if Nunaminerals went bankrupt.
And the drill samples are not worth
very much, he claims.
Particularly because they currently owe
the Government and their creditors a lot
of money. If Nunaminerals went bankrupt,
the licences would naturally be handed
back, and then one could just ask to take
them over, said Jesper Ilse to AG.
Speculating in Tax Regulations
He believes that actually the manoeuvre
is a creative tax move.
But Patrick Newman rejects this. He is
now in charge of Nunaminerals, after his
consortium, GMM took over the controlling interest.
Im not a tax lawyer. But we only got
involved in the whole Nunaminerals issue, because we feared that we and the
Koreans were about to lose our licence
and investment. We did not come here

looking for a tax business.
andreas@ag.gl
FACT
For much of its 25-year existence,
Nunaminerals has been a sure winner for Greenlands government.
Historically, for each krone that has
been injected into the nationally
controlled mining firm, Nunaminerals has been able to attract an
additional five kroner in foreign
investment. Perhaps that would explain why Inatsisartut, the national
legislature, itself facing a DKK 83
million ($14 million) budget deficit
next year, agreed to a government
request earlier in 2015 to earmark
an additional DKK 4.5 million in
funding to keep the firm afloat.
45
China is on a global shopping spree for mineral resources and geopolitical influence in the Arctic.
Chinas Interest in Greenland
WORRYING
The Danish Defence Intelligence
Service is following Chinese
investments in Greenlands
underground
It has not escaped the attention of the

Danish Defence Intelligence Service that,
following the collapse of London Mining, the Chinese company, General Nice
Development took over the Isua mining
project at the bottom of Godthb Fjord .
Every second year, the Danish Defence
Intelligence Service (FE) publishes a report about its activities.
According to the report for 20132014, in addition to Russias political
and military intentions in the Arctic, the
Danish Defence Intelligence Service has
prioritised Chinas economic involvement
in the Arctic region, including Greenland.
Chinas primary interests in the Arctic
46
are shorter shipping routes and access to

natural resources, but Chinese investment
in the Arctic, including Greenland, will, in
the medium to long term, probably lead
to the countrys achieving political and
strategic interests in the region, states
the Danish Defence Intelligence Service.
Could pose risks
China is not directly involved in the Isua
mine at the bottom of Godthb Fjord,
but the Greenland mining authorities
have granted exploration licences to
companies, whose ownership ultimately
points toward China.
Chinas interest, particularly in investing in strategic minerals in Greenland,
could pose risks for the Danish Realm,
and we are following this development,
writes the Danish Defence Intelligence
Service.
China is also interested in achieving
influence on development in the Arctic

region, so it cannot be implemented by
the Arctic coastal states alone.
Like a number of other countries, in
May 2013, China was granted status as a
permanent observer in the Arctic Council, and will slowly attempt to expand its
influence in the Arctic, says the FE.
Free market forces

But it is not everyone who shares the
Danish Defence Intelligence Services concerns about Chinas interest in Greenland.
Maybe Im nave in relation to the political picture that the FE outlines, said
Ole Christiansen, CEO of the Greenlandic
mineral exploration company, Nunaminerals to Sermitsiaq.
But I think its more a case of how
markets are evolving. Are we going to
see mines competing against mines,
regardless of nationality, where the most
Oil & Minerals #15
competitive wins, or will two or more

market cultures evolve, where individual
markets will produce under different
market conditions?
I have long been of the opinion that
the strategic element of mineral resources is greatly exaggerated, and it is my assessment that, instead, it is market forces
with supply and demand, which mainly
come into play, said Ole Christiansen.
But the Danish Defence Intelligence
Service is expressing concern?
I think well discover that there are
just as many bad apples in Western markets as in Eastern markets, and Chinese
money can be just as good as Western
money. So far, China has invested much
greater venture funding than North
America and Europe, and the Danish
pension funds have made it clear that
they will only get involved if there is a
good risk premium.
Demand is covered
At the spring Future Greenland conference in Nuuk, Ole Christiansen stated
that it was the special market develop-
ment resulting from the development in

China, which was causing metal prices to
rise so much.
The mining industry is burdensome
and capital intensive. For several years
it was all about expanding production,
while prices rose sky high, said Ole
Christiansen.
Now market production is on a par
with demand. In fact, today supply is
greater than demand. This means that
the least profitable mines have to close
down (unless planned finances operate these mines artificially). It may well
be that the demand for metals will rise
again, but in the foreseeable future we
are unlikely to see the same sky-high
prices that we saw before. The markets
have adjusted themselves and without
major investment they can keep up with
a moderate development in demand.
Investments can lead to
political pressure
In its risk assessment, the Danish Defence
Intelligence Service write that Chinas
commercial and strategic interests are
traditionally closely interwoven because

of the Communist Partys dominant role
in society and the economy.
It is therefore likely that China will
have more political and strategic interests in the Arctic region as the countrys
economic involvement in the Arctic
grows. Consequently, there is a risk that
a commercial transaction with a Chinese
company or a Chinese state-owned company could be a political issue, in which
the Chinese government gets involved
and acts predominantly on the basis of
political considerations.
The FE calls for caution.
In recent years, on several occasions
China has used its financial strength and
market dominance for direct political
pressure on other countries in connection
with issues, which China considers to
be of vital national interest. It is possible
that similar cases could occur in Arctic
contexts.
By Kurt Kristensen
kurt@sermitsiaq.glw
WE OFFER SERVICE ON:

Surveying and Geotechnics
Mapping and Geodata
Remote Sensing and GIS
GREENLAND SURVEY
www.asiaq.gl
Hydrology, Climate and Enviroment
Oil & Minerals #15
47
Crouching General,
Hidden Iron
Huge mining
conglomerate
General Nice Development is a mining conglomerate
with more than 12,000 employees. The company operates in
China, Singapore, Indonesia, India,
Thailand, Tajikistan, South Africa,
the United States, Australia, and
Russia.
The ISUA licence is so marginal
that it is not even mentioned on the
companys website.
The large-scale mine in Nuuk
Fjord is several years in the future.
Ideally, it will be established in parallel with other huge projects so they
can share infrastructure, said Jenny
Yang of General Nice Development
the other day at a conference in
Copenhagen. As a representative
of the Chinese mining industry with
close links to the government in
Beijing, Jenny Yang suggested the
establishment of an international
fund to finance mining in the Arctic.
The Nordic Resources Development Fund was the working title.
48
The Chinese General Nice

Development, which now
owns the ISUA licence in
Nuuk Fjord, has no plans to
establish an iron mine in the
foreseeable future
Forget all the dreams (or nightmares) of a
massive iron mine with Chinese workers
at the bottom of Nuuk Fjord.
For the time being, the Hong Kongbased company, which currently owns
the ISUA licence, does not intend to
invest in the project. This information
was part of a statement made on Tuesday in Copenhagen by Jenny Yang, Vice
President of the licences new owners,
General Nice Development.
The news from the major Chinese
company that they had no immediate
plans to construct the ISUA mine was delivered at a closed meeting in the offices
of the Confederation of Danish Industry.
In the subsequent open conference
about investment in mineral mining in
Greenland, the message from the new
owners was not quite so conclusive,
but the analysis was clear: no commercial value.
The price of iron on the world market
must be much higher than today before
it becomes commercially interesting to

invest the estimated DKK 14 billion,
which it would cost to construct the
ISUA mine.
Price must exceed $80
In a presentation at the conference,
Jenny Yang went over the main features
of the project and concluded that it has:
no commercial value under the current
market conditions.
In a statement to Sermitsiaq Jenny
Yang refused to admit that plans for the
construction of an iron mine near Nuuk
had been abandoned. She emphasised
that, if the price of iron rises from the
current US$ 50-55 per ton, then at some
point the company might look at the
project more positively.
It depends on the market, which is
presently very unstable. In the current
situation, where the price is low, we cannot build the mine. We must wait. It is
very difficult to say when iron prices will
be back at 80-85 [US Dollars per ton, ed.].
At that point, the project may have
commercial value, said Jenny Yang.
What is your companys assessment
of the development of the price of iron?
Will it take five, ten, fifteen or twenty
years before General Nice Development
will invest in the ISUA mine?
Oil & Minerals #15
Until 2014, the ISUA project was owned by

the company, London Mining. The company
attempted to raise capital to construct a
huge open-pit iron mine with the associated
infrastructure.
Thats a very difficult question to

answer. If you asked an analyst to predict
the development of the price of iron,
they would find it very difficult. The quality of the iron ore in ISUA is very good.
We hope we can continue to work on
this project, said Jenny Yang.
Several huge projects
In her presentation at the conference,
she emphasised that it would be more
realistic to build the iron mine, if other
large-scale projects were to evolve at
the same time in South West Greenland. Then we could share the infrastructure and achieve synergy effects,
said Jenny Yang, mentioning oil and gas
drilling and the mining of rare earths or
other metals as possible projects.
Poor iron prices have led to the shelving of the Isua project yet again.
Until 2014, the ISUA project was

owned by the company, London Mining. The company attempted to raise
capital to construct a huge open-pit
iron mine with the associated infrastructure 70 kilometres from Nuuk. In
2013, London Mining was granted a
mining licence, but went bankrupt the

following year when iron prices plummeted. Meanwhile, the companys only
major active mine in Sierra Leone was
paralysed by the Ebola epidemic.
A great business travel agency

has more to offer than just great travels
Susan Gudmundsdottir Johnsen, travel consultant, Greenland Travel
As travel consultants we are in daily

contact with many different customers
who all depend on good advice. This is
an obligation and a responsibility that
Oil & Minerals #15
we take seriously. Therefore, all our

travel consultants are Greenlanders
with a personal, first-hand knowledge
of Greenland.
www.greenland-travel.com
49
New
China Proposes
Private and public investors from
China, Scandinavia and other countries should join forces to establish
a major fund to invest in major
mining projects in the Arctic
The Nordic Resources Development
Fund
With this headline, a representative of
the Chinese mining industry launched
an idea to consolidate venture capital in
an international fund for investment in
major Arctic mining projects.
The proposal came during a conference in Copenhagen on investments
in Greenlands mining industry. It came
from the Chinese mining giant General
Nice Development, whose Vice President,
Jenny Yang, in her presentation, introduced the concept of a financially strong
fund: to invest, on one hand, in
mines and, on the other, in the necessary infrastructure such as ports and
power plants.
Proposal from Beijing
Participants in the fund could be industrial investors, financial institutions and
others, said Jenny Yang. Her proposal
did not go into detail, but there was a
very positive response from a number of
stakeholders in and around the mining
industry who attended the conference.
The proposal evidently does not come
from the Chinese mining company alone.
50
Arctic Mining Fund
Just before, Jenny Yang had highlighted the close relationship between the
company and the Chinese government,
and other governments, illustrated with
a photo of executives from General Nice
Development with Chinese President Xi
and Russian President Putin.
No pension money
Recent notions of investment in the
mining industry by Danish pension funds
were put to sleep at the conference.
During a panel debate, Claus Lyngdal,
Head of Investment at Pension Danmark,
warned against nourishing hopes that
billions of Danish pension funds would
be available as venture capital.
In recent years, Pension Danmark
has invested in the likes of wind farms,
broadcasting networks and the leasing of
British trains, but these are projects with
a minimal risk of loss. With reference to
the mining industrys need for investment, Claus Lyngdal noted that: the
projects, which have been mentioned
today, are undoubtedly excellent, but our
appetite for risk is very small.
A possible fund
But he would not completely close the
door in terms of the billions of kroner
in Danish pension funds and projects in
Greenland. Maybe there is infrastructure,
which the pension funds will invest in,
but I have not yet seen such projects.
We have no obligation to invest in
mining projects. We will look at them as

we would look at any other project. Our
commitment is to our pension customers
who want security and stability for their
savings, stated Claus Lyngdal.
However, he left the door ajar for a single model. Participation in an investment
fund might be an option, but Pension
Danmark would also expect the state to
stake some money in the fund.
Lengthy processing time
Several speakers at the conference
highlighted the slow processing of cases
by the Greenlandic authorities as an
obstacle for the mining industry.
Frode Nilsen, CEO of the Norwegian
LNS Group, a partner in the ruby mine,
criticised the unacceptably long time it
took to process the case, before the mine
was awarded the final licences.
Henrik Leth, President of the Greenland Business Association, warned that
unpredictability and unclear frameworks can scare away investors.
The conference was organised by the
Confederation of Danish Industrys Arctic
Cluster of Raw Materials, which sets up
networks and rearms companies in Denmark and Greenland for the challenges
and opportunities of the mining industry.
Oil & Minerals #15
Aluminium
Giant
Releases Huge Hydropower Potential
Alcoa is now losing the monopoly
on the access to hydropower from
two lakes near Maniitsoq. Until
now the potential had been
reserved for the aluminium project
and excluded other possible users
Alcoa is no longer counting on building
an aluminium foundry at Maniitsoq. This
must be the conclusion, now that the
major American company is voluntarily
releasing the Government of Greenland
from one of their most maligned commitments in the declaration of intent,
which was signed between the parties
ten years ago.
It was in this agreement that the then
Government agreed to reserve Greenlands biggest potential from Lake Tasersiaq between Maniitsoq and Kangerlussuaq for the company for 50 years, while
the company mulled over whether or not
they would invest in Greenland.
The potential from the smaller lake,
Tarsartuup Tasersua, which has the
perfect strategic location for prospective
iron production at Isua, was also locked
because of the agreement.
But that is over now says Vittus Qujaukitsoq (Siumut), Minister of Finance
and Domestic Affairs, who was responsible for some of the final negotiations
with the company, when both parties
were in Maniitsoq to inform the residents
of the town about the development.
Three-phase process
We really want the project to succeed.
Oil & Minerals #15
But, on the other hand, we also have to

admit that it is not tenable to allow the
potential for energy supply and hydropower to be tied to the project. In my
opinion, that puts us in a very bad position, says Vittus Qujaukitsoq.
He refuses to criticise the then Government led by Hans Enoksen for entering
into what many people considered a far
too unilateral agreement with Alcoa.
In this context, one of the companys
demands was the option of the mass
import of foreign labour. This led to the
Large Scale Act, lenience in the area of
the environment and billions of kroner
of investment by the Government of
Greenland.
In return for these promises, the Government were given a three-phase process, in which phase three was the actual
start of the project. There was, however,
no deadline in terms of the amount of
time the company had to spend on the
current phase two, while the hydropower
potential was locked. Ever since, Maniitsoq and the rest of Greenland have been
kept on tenterhooks.
I am not the person to judge whether
it was good or bad. I simply want to note
that it creates no momentum, if we only
commit ourselves to Alcoa, says Vittus
Qujaukitsoq.
server farms with natural Arctic cooling.

Another possibility is the aluminium
company, Norsk Hydro, which was also in
the running before the agreement with
Alcoa was signed.
There are also several mining projects
in the area, which might join forces and
use hydropower instead of the planned
diesel generators.
Projects dont grow on trees, and we
are not so privileged that we can just
pick and choose. But it creates some
leeway, says Vittus Qujaukitsoq, who
emphasises that Alcoa has no wish to
withdraw from the rest of the agreement
with Greenland.
This doesnt mean goodbye to Alcoa,
but a possibility that the data provided
by the company on the potential of
hydropower might be used for other
purposes, says Vittus Qujaukitsoq.
According to the agreement with the
aluminium giant, by signing a confidential disclosure agreement, any new
investor could be granted free permission
to analyse all the available data on the
potential of hydropower. If a stakeholder
agrees to proceed, using the existing
studies (thus saving many years of work),
they will have to refund the expenses of
Alcoa and the Government of Greenland
for the work, adjusted to current prices.
Hydropower to be marketed
As soon as the new agreement has
been signed, he will set about marketing the potential of hydropower to other
stakeholders. For example, the planned
extension of the lake cable might lead to
Andreas Lindqivist
andreas@ag.gl
51
Gold
hunting in
Godthb Fjord
Eric Drummond (centre) demonstrates how to wash gold.
American black-and-white western films.

The soil, gravel, stone and remnants
of the mountain are swirled round in the
pan. Gold is 17 times heavier than water.
So the precious metal should be deposited at the bottom of the pan.
Let me just take a look at the pan,
says Eric Drummond, producing a magnifying glass.
nies the trip. In the programme a brood

of gold hunters, soldiers of fortune and
geologists searched for rubies and gold
in Godthb Fjord, when they were not
fighting against the weather and falling
out with each other.
Patience is golden
Eric Drummond has been in the licence
area before.
Youve got to be patient. Eric Drummond encourages one of the women on
the trip.
She is one of the first to wash the
pebbles and gravel. Earlier, the group
chopped off the material from what
looks like a boring, rusty rocky ledge.
The washing process is just like in the old
MADS NYVOLD
Deep in the heart of Godthb Fjord, the

geologist Eric Drummond squats down
on the banks of a flowing river.
In front of him he has a green plastic
dish with five grooves. The dish is filled
with what looks like rusty pebbles, gravel
and muck. Eric Drummond scoops water
into the dish and swirls the contents
round in gentle, circular movements.
You never tire of this, sighs Eric
Drummond with fascination.
After a brief instruction, he hands the
dish to a female member of a group on
an unusual package tour. Together with
11 other travellers, she has sailed into
the fjord with Captain Erik Palo Jacobsen
of Arctic Boat Charter.
They are in search of element 79, one
of the most coveted metals in the world.
The trigger of wars and the symbol of
eternal love. Gold.
Eric Drummond, familiar from three
seasons of the Discovery/Animal Planet
TV reality show, Ice Cold Gold, accompa-
MADS NYVOLD
Erik Palo Jacobsen combines

tourism with gold digging
The first gold of the trip was found after 38 minutes and placed in a test tube.
The trials and tribulations

of gold fever
It was Erik Palo Jacobsens intention to
launch the Gold&Fish concept last
year. Travellers would extract gold, and
fish for deep-water redfish, aptly known
as Golden Redfish in English.
But, to his frustration, he could not
find any gold in the selected area, so he
did not want to delude other people into
thinking that it was possible.
Erik Palo Jacobsen had the feeling that
he was approaching things wrongly.
Before winter set in, and with the help
of the American geologist Eric Drummond, he would now decide whether
the concept was at all viable or should be
scrapped.
As Arctic Boat Charters Targa 37, the
M/S Sterna, pulled out from Tidevandstrappen in the morning, Eric Drummond
doled out small test tubes. At the bottom
were examples of gold found in California.
Theres always a chance of finding
the big nugget. Thats what keeps you
going. Hopefully youll also come back
richer today! said Eric Drummond with
Oil & Minerals #15
52
Never mind the fish

Back at the river, Eric Drummond squints
through the magnifying glass. He
rummages in what looks like a pile of
ash-grey pebbles. He grimaces and looks
disgruntled.
He rummages and pokes around in the
pile. He puts the magnifying glass to his
eye again. He holds the washing pan up
to the light to see if there is any golden
glimmer. He pokes the pile once again.
A smile is perceptible at the corners of
his mouth.
The American geologist hands back

the green washing pan to the female
traveller.
Look up there in the corner. Youve
struck gold! he tells her.
The group cheers. A mere 38 minutes
after the group had landed and chopped
into the boring rocky ledge, someone
has made a find.
The gold fever spreads. They flock
round the waterhole and swirl sand and
gravel round in the dishes. Eight minutes
after the first find there is another prize.
A man has found two tiny pieces of gold
in his first attempt.
Time to retire! he laughs.
Little, sharp grains
When, after three hours of gold hunting,
the M/S Sterna heads back to the capital,
the group assemble in the cabin.
One of them has brought champagne.
They drink a toast and Eric Palo Jacobsen
sums up the situation. 11 out of a total
of 14 people were lucky.
Now that most people of found gold
and even I found a little grain, Ill be able
to sell the product next year with a good
MADS NYVOLD
a twinkle in his eye.

Erik Palo Jacobsen picked up speed
and turned to the 12 travellers on board.
No. Because you havent paid for the
trip yet, he joked.
Erik Palo Jacobsen has a small-scale
licence for the actual licence area. According to him, the cooperation with the
Mineral Licence and Safety Authority is
excellent. Next year he will be allowed to
issue export licences. Once he has those,
travellers can safely fly away with gold in
their pockets: but of course only if they
have actually found something.
Here! You need good sight to spot some of the

grains of gold.
conscience. Ill probably focus on gold

alone and leave the fish swimming,
declares Erik Palo Jacobsen.
None of the finds were nuggets. They
were little, sharp grains of the coveted
precious metal.
In many cases it took a magnifying
glass to see the deposit. Altogether,
there was scarcely enough to produce
a pinhead. But at least they did find gold.
By Mads Nyvold
OIL SUPPLY
COMPANY FOR ALL
OF GREENLAND
We supply oil to mining
and oil industries
Contacts
Energy Manager
Tage Lindegaard
tal@kni.gl
Logistics Manager
Niels Chemnitz
niz@kni.gl
All types of liquid petroleum products

OilMinerals_polaroil_promo_186x124mm.indd 1
Oil & Minerals #15
P.O. BOX 3030 3911 SISIMIUT GREENLAND

PHONE: +299 86 24 44 FAX: +299 86 23 96
01-12-2015 14:36:14
53
Opinion:
Dont Squeeze the
Lemon
A major mining project at Citronen
Fjord has moved a little closer,
which again raises the question of
mineral royalties. However, royalties on minerals are a poor and
ill-considered tax, which should
be removed because it prevents
investment in mineral exploration
A few years ago, Greenland chose to
introduce a royalty tax on new mining
projects.
The attraction of such a tax is very
simple. It is easy to manage and it
yields immediate income if there are
mines in operation. It is a temptation,
which any Minister of Finance hungry for
revenue finds it hard to resist. During recent years of high prices, many countries
with established mining industries chose
to introduce such a tax.
Just because other countries introduced a royalty tax, it is not necessarily
a good idea, and certainly not in Greenland. The ideal would be a system, which
taxed extraordinarily large profits when
they occurred, in addition to an ordinary corporation tax. Such taxes on the
high profits that may be earned in times
of high mineral prices do exist, there
is experience of them and it is no big
mystery how they work and they are well
suited for their purpose which is collecting the governments share of the value
of minerals.
It goes without saying that investors
would rather be free of taxes. However,
if mines need to be taxed, it is vital for
investors to know the terms and conditions from the very first moment they invest. That is why Greenland very sensibly
includes a mention of the tax in exploration licences.
The problem of a royalty tax is that in
many ways it is socially inefficient. The
54
rate may be set too high or too low. In

this way projects with low profitability
may be taxed too much whereas highly
profitable projects may end up paying
too little.
A fixed royalty tax increases unit costs
and makes every single mine smaller,
because the size of a mine is determined
by the difference between a units value
and the expenses involved in digging up
this unit from the ground.
On top of these technical problem
comes another. Greenland is not a country with a mining industry. That means
that future investors are unable to get
a clear picture of whether Greenland is
a reliable partner. Every time Greenland
fiddles with tax conditions it has an
impact on the countrys reliability. From
this perspective, Greenland cannot abolish the royalty tax without damaging the
countrys reliability even further, despite
the fundamental flaws inherent in the
royalty tax.
Right now, large parts of the mining
industry are in crisis. Some of the major
companies are challenged and one or
two are dangerously near collapse, and
there is no prospect of higher mineral
resource prices in the near future.
That is why now is a good time to get
rid of Greenlands royalty tax. By eliminating the royalty tx and, if necessary
introducing a profitability tax, Greenland
could focus on the only thing that matters: getting a certain amount of mining
off the ground.
The previous tax model, which had developed under a broad consensus since
the late 1990s was less harsh. It certainly
would not guarantee Greenland all the
revenue that theoretically might be possible. Nevertheless it was appropriate
for two reasons: It made investment in
mineral exploration in Greenland attractive and it was based on a broad political
compromise, which guaranteed stability,

no matter which party was controlling
the country. This broad-based approach
showed that Greenland understood the
low probability of finding deposits, which
really would require an extra high tax,
compared to the probability of finding
a few more ordinary deposits. These
ordinary deposits, however, would, as
a result of the royalty tax, be demoted
from being interesting investments to
being irrelevant.
The current royalty tax shows that
Greenland no longer understands what
the mining of mineral resources under
extreme conditions is all about. In other
words: Greenland will not get very far as
a mineral resources nation as long as its
politicians continue to insist on the royalty tax. The government of Greenland
needs to refocus its attention on becoming a mining nation and then worry
about taxes later. If it must the government can introduce a more appropriate
tax targeted at those instances where
an extremely valuable deposit earns big
profits but that should not be a priority
at this time. Or, put differently, keeping
the royalty tax will make it hard to attract
exploration investment in the future and
it will also reverse the significant advances in exploration made over the last
decade or two.
Dr. Sinding is a Danish geologist who
obtained his PhD in mineral economics
from the University of British Columbia.
He has held positions at Imperial College, University of Dundee and Aarhus
University.
By Knud Sinding,
Associate Professor, MSc, BComm, PhD.,
Department of Environmental
and Business Economics.
Oil & Minerals #15
Large Ruby
Crystals Found
in the Mountains
A father and son have found two
ruby crystals, which are among the
largest in the world. They will be
sold at auction in the United States
Two mineral hunters have found two
very large ruby crystals, which they say
are among the largest in the world.
The men responsible for the find are
Lars Jepsen, who has a so-called personal
small-scale licence, and his son, AngnguaK Thomas Jepsen.
The two crystals, which have been
named Angakkoq 1 and Angakkoq 2,
weigh respectively 865 grams and 497
grams and have a carat of 4.325 and
2.485.
Were talking about very large ruby
crystals, which are among the largest in
the world, in terms of recorded global
finds, says AngnguaK Thomas Jepsen.
Took the whole field season

The mineral hunter, who has a geological
background, emphasises that such valuable stones are not that easy to come by.
We started at one end and evaluated the geological data for the whole
of West Greenland. Then we selected an
area with ruby potential. Then it took us
the whole summer to look for the deposit. But it was worth it, says AngnguaK
Thomas Jepsen.
ANGNGUAK THOMAS JEPSEN
Great quality
He adds that the ruby crystals were
found somewhere in West Greenland,

but is keeping his cards close to his chest
when it comes to the exact location.
The difference between genuine rubies
in jewellery shops and ruby crystals is
that the crystals are not counted as
gemstones or precious stones until they
are cut.
Conversely, a valuable ruby may be
concealed within these ruby crystals. The
ruby must then be cut so it can be set in
a piece of jewellery.
But these are gem quality crystals
because of the stones quality, and the
exceptionally large size, shape and colour, emphasises AngnguaK Thomas
Jepsen.
Rubies and ruby crystals are evaluated
according to their quality. There are socalled non-gems (non-precious stones),
near-gems (semi-precious stones) and
gems (precious stones).
These two crystals are estimated to
be in the near-gem class with sections of
gem quality, says the mineral hunter.
Oil & Minerals #15
Uncut
These are rough ruby crystals that have
been neither cut nor in any other way
processed. The mineral hunters will now
try to get the stones sold at an auction in
the United States.
In this context, the ruby-discoverers are
receiving assistance from the American
geologist, Eric C. Drummond, who works
as a consultant for Greenland jewel hunters. Eric Drummond is well-known from
the Animal Planet TV series, Ice Cold
Gold, which involved a group of adventurers searching for gold and rubies in
Greenlands subsoil.
Drummond owns the company Red Ice
Gem, which deals with the practicalities
of getting the stones put up for sale in
the United States.
In December 2013, a Greenland ruby
crystal shaped like an apple with a leaf
and a stem of Greenlandic gold was
put up for auction in the United States.
But no sale went through, because the
Greenland sellers did not achieve the
reserve price of DKK 55,000.
By Mads Dollerup-Scheibel
mads@sermitsiaq.gl
55
our
region with
the most
experienced
businesses
www.business.gl - info@business.gl
Photo/Foto: Mads Pihl

Greenland Oil &amp; Minerals, Issue 15, December 2016

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Issue 15 2016

First Ruby Mine

Oil exploration is good entertainment ................................. 18

Gold hunting in Godthb Fjord ........................................... 52

Greenland Oil & Minerals is independent of political and

Editor in chief: Poul Krarup, krarup@Sermitsiaq.AG

Low Price of Oil Puts Paid to

in the near future. Russian oil production is at its highest level

Mads Nyvold, editor

Oil & Minerals #15

We know the drill

With decades of experience acquired from Arctic

Our nine robust AS-350 helicopters are versatile

Air Greenland Charter, Tel. +299 34 34 34, e-mail: glcharter@airgreenland.gl, www.airgreenland.com/charter

No nukes from Nuuk

Smiths working on ruby mine

Expectations for the ruby mine

Oil & Minerals #15

New minerals boss

Lauge Koch and the

Oil & Minerals #15

On With Your Helmets!

THE MINES ARE COMING

of large mines in Greenland can again be

1990s that they had high hopes for oil

international perspective, the reluctance

tractors in lots of fields when mining on

By Sren Rasmussen, freelancejournalist

One of the first

Peter Madsen, Project Manager, Norwegian geologist.

On 2 December 2015 True North Gems

True North Gems Commences

Jrgen Nielsen from Qaqortoq is working as a

will be Greenlandic manpower).

The Aappaluttoq is expected to be

Politician Demands Ruby

lation debate raised by Peter Olsen (IA)

levels. So I dont understand the idea of

By Niels Ole Qvist

True North Tired of

No ruby debate fails to mention the rock

Rumours still abound about

Bent Olsvig, CEO of True North Gems.

everyone is so focused on the matter is

So far they have been used to market the

potential. The results from this years field

The areas high number of mineral deposits

Resources mining project and North

The mineral resources sector is one

By Mathies Hvid Toft, freelancejournalist

Hudson to Export Anorthosite from

All the major fibreglass manufacturers in

with one of the worlds major energy

around the world, says Jim Cambon.

a road and harbour facilities, which will

Hudson are also required to participate

new mineral opportunities. Once weve

Steffen Jacobsen, author of an acclaimed thriller about oil

Oil exploration is good

which is helping to fund the project.

out. Innocent people in Denmark are

Iluaqutissaq uagutsinni nassaariuk

All kinds of business

+299 701243 www.forsikring.gl kfa.erhverv@if.gl

Greenland Oil & Minerals, Issue 15, December 2016

Greenland Oil & Minerals, Issue 15, December 2016