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How Rare-Earth Mineral Mining is Changing Greenland’s Politics

by Serag Heiba Americas Global Commons Jun 18th 20215 mins
How Rare-Earth Mineral Mining is Changing Greenland’s Politics

The largest island in the world, Greenland, is home to 56 000 inhabitants and a massive ice sheet that makes up 80% of the country’s land. As a result of global warming, Greenland’s ice sheet has been melting at increasingly faster rates compared to the past, with new research suggesting that a significant part of it is on the brink of a major tipping point. Recently, the political landscape in Greenland has been changing as quickly as its physical one; concerns over a proposed mining project in Greenland took centre stage in a snap election which left the once-dominant Siumut party (which has won all the past elections except one) in second place, stopping the controversial project dead in its tracks. 

The election was held on April 6 and saw a major victory for the democratic-socialist party known as Inuit Ataqatigiit, Greenlandic for “Community for the People.” This left-wing indigenous party, which based its campaign on a promise to cancel the proposed mining project (known as Kvanefjeld) in the south of Greenland, won 36.6% of the votes, earning it 12 seats in the country’s 31-seat parliament—more than any other party.

greenland mining

Nuuk, the capital of Greenland, is home to a third of the country’s population (Image: Wikimedia Commons).

Greenland’s politics are unique. Although the territory is autonomous and self-governing, it still belongs to the Kingdom of Denmark (which declared it a colony in 1721, several centuries after Vikings settled along its coast). Denmark sets Greenland’s foreign, monetary and defence policies, while Greenland’s parliament and prime minister govern domestic policy. Greenland also receives an annual block grant from Denmark of USD$585 million, constituting roughly 20% of Greenland’s GDP and more than half of its public budget.

Kvanefjeld, the ambitious mining project that has caused controversy in Greenland since it was first proposed in 2007, is also unique in many ways. The site is claimed to be the world’s second-largest deposit of rare-earth oxides (which are found in virtually every modern electronic device), and the sixth-largest deposit of uranium. Some of the rocks near the site are more than 1 billion years old, making them among the oldest found on Earth. Greenland Minerals Ltd., the Australian company backing the project, claims Kvanefjeld has “the potential to become the most significant western world producer of rare earths.” 

Yet, the project remains highly controversial, particularly in the small city of Narsaq located just six kilometres from the site. Concerns over the long-term environmental and health risks posed by uranium mining (as well as unaddressed rumours of radioactive uranium dust blowing onto nearby farms and settlements) caused severe resistance to the project, which has failed to gain support from the residents of Narsaq or the wider Greenland community. 

Regardless of public perception, rare-earth mining is environmentally devastating. China currently dominates the global trade of rare-earth metals, bringing it considerable revenue but exposing it to severe environmental damage. This includes the destruction of surface vegetation and soil erosion, as well as the creation of huge and highly-polluted wastewater ponds contaminated with radioactive residue. Although efforts are being made worldwide to devise more environmentally-friendly methods for the extraction and processing of rare-earth metals, there is still a long way to go. There is certainly a huge incentive to support this research, not least because many of the technologies needed to mitigate climate change are dependent on rare-earth metals, including electric vehicles and wind turbines.

Incidentally, it was a similar debate about mining (on whether international companies such as Greenland Minerals should be allowed to mine in Greenland) that caused the country’s previous coalition government to collapse, precipitating the snap parliamentary elections held on April 6. At the polls, Greenlanders voted out the previously ruling Siumut (Forward) party which has dominated Greenland’s elections since 1979, the year Denmark granted home rule to Greenland. In their place the opposition Inuit Ataqatigiit (IA) party was elected after a successful campaign that explicitly opposed the Kvanefjeld project.

However, IA is not opposed to all forms of mining. The newly elected party generally supports the development of mineral extraction, including existing gold and olivine mines. Exports derived from mining in Greenland currently bring in about USD$9 million annually, constituting 2% of the country’s total exports. Greenland Minerals estimates the Kvanefjeld project will have annual revenues in excess of USD$600 million, though much of this amount will likely flow out of Greenland to the company’s headquarters in Australia and backers in China. 

With an economy that is heavily reliant on grants and imports from Denmark, Greenland’s substantial ore reserves bring hope for economic autonomy and full political independence. IA is itself a separatist party, and should Greenland ever succeed in gaining independence from the Danish realm, it would be the world’s first completely independent indigenous country.

greenland mining

Greenland’s ice sheet is the second largest in the world, after the Antarctic ice sheet (Image: Wikimedia Commons).

However, as with all issues concerning the environment, politics and money, this one is more complex than it may appear.

Greenland’s geographic location coupled with its untapped mineral deposits has for a long time attracted attention from foreign powers. In 2019, former US President Donald Trump mentioned the idea of buying Greenland from Denmark. This wasn’t the first time a US president made such a proposal. Greenland was briefly a US protectorate during World War II, and it still operates an air base in the island’s north west.

China is also involved in Greenland, and has several deals with the Greenlandic government in infrastructure and natural resources. Greenland Minerals, the company behind the Kvanefjeld controversy, is backed by Chinese companies.

For Russia, Greenland presents an opportunity to gain greater control over the Arctic. Russia houses its nuclear fleet in Arctic waters, and has for years been promoting use of the North Sea Route—a trading route that will only grow in importance as the world warms and the Arctic ice melts.  This places Greenland right in the middle of a global tug-of-war between three major global powers.

But before the new government can begin to worry about the island’s role on the global chessboard, it is focusing on making sure the proposed Kvanefjeld project is dead and buried. Greenland Minerals has vowed to take legal action and fight back the decision to cancel the project.

Ultimately, the future of Greenland is tied to the future of this controversial project and others like it. Rare earth mining, with its financial lure and promises of economic growth, could help bring about independence to a country whose large indigenous population is fearful of losing its beautiful environment and traditional ways of life. With climate change a present reality threatening the world’s largest island, such loss may be inevitable.

Featured image by: Flickr 

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