Brussels, 13 June 2012
Greenland's raw materials potential and the EU strategic needs
Greenland has an especially strong potential in six of the fourteen elements on the EU critical raw materials list developed by the European Commission (niobium, platinum group metals, rare earths and tantalum) and moderate for further three elements. The EU list of critical raw materials is part of the EU Raw Materials Strategy adopted in 2008 and reinforced in 2011. The critical raw materials list in 2010 identified the 14 elements based on several risk factors: if a material displays a high importance to the economic value chain and a high vulnerability to possible supply constraints it can be considered as critical (if e.g. it is produced in only a few countries in the world which are not always marked by great political and economic stability, it is difficult to substitute or it has a low recycling rate).
Greenland's potential in critical raw materials production
Greenland is known for geological settings carrying a high potential for hosting Rare Earth Element-deposits (REE), and a number of large deposits are being explored in an advanced stage. It is considered likely, that Greenland has the ability to become a mid-size supplier in a REE market dominated by larger players. Greenlandic share of the overall REE resources amounts to 3.44 % (ca. 4.89 million tonnes). If one includes the latest project figures the Greenland REE resource is estimated to be at least 12 million tonnes of REEs. These figures are based on resource estimates from 5 mineral projects. This corresponds to 9.16 % of the global REE resources.
X – defined as critical, + - considered important, UNEP = United Nations Environment Program
Source: Bureau of Minerals and Petroleum, Greenland and Geological Survey of Greenland and Denmark (GEUS)
Global rare earths potential (2010)
Source: Bureau of Minerals and Petroleum, Greenland, after USGS (2010)
Several projects are already in their exploitation phase: gold and silver mine in Nalunaq (the only currently producing mine), lead/zinc mine in Maarmorilik (production to start in 2012), molybdenum mine in Malmbjerg and olivine mine in Fiskefjord. International interest in Greenland has strongly increased recently as shown by the exponentially growing number of exploration licenses granted by the Government of Greenland. Of the projects in their exploration phase, several are in an advanced phase with the possibility to turn into exploitation projects in the next one to five years. Three applications for exploitation are expected already in 2012.
Number of mineral licences in Greenland (excluding oil and gas)
Source: Bureau of Minerals and Petroleum, Greenland
The Government of Greenland presented a new mineral strategy in 2009 with focus on new areas and themes establishing Greenland as an attractive exploration area. Currently ca. 58 % of exploration companies operating in Greenland are Canadian or Australian companies. The share of EU companies operating in Greenland is only 15% (Denmark, Germany, Czech Republic and United Kingdom). Although of the four exploitation licences three are European, the European companies have a low involvement in ongoing exploration activities and own only a few exploration licences (with most licences owned by UK, Germany and Denmark). The signature of the Letter of Intent between the European Commission and the Government of Greenland can change a great lot in this respect.
Exploration companies operating in Greenland by country of origin (April 2011)
Source: Bureau of Minerals and Petroleum, Greenland, Greenland mineral exploration brief in figures.
EU-Greenland dialogue on raw materials – Letter of intent
To address these challenges the European Commission adopted its Raw Materials Strategy in 2008, and further reinforced it in 2011. With this coherent approach aimed at ensuring fair, undistorted and sustainable access to raw materials, the Commission proposed to concentrate actions on three pillars which represent three different sources of supply:
Ensuring the fair and sustainable supply of raw materials from international markets
Fostering sustainable supply within the EU
This strategy has been endorsed by the Council in its Conclusions of May 2011. The Commission also received the broad support of the EP which adopted a comprehensive Resolution last September.
The signature of the Letter of Intent will take place during the official visit of Vice-President Antonio Tajani to Nuuk on 13 June. The Letter establishes to explore ways to reinforce their dialogue on mineral resources, within the framework of the EU-Greenland partnership, as laid down in Council Decision 2006/526/EC of 17 July 2006 on relations between the European Union on the one hand, and Greenland and the Kingdom of Denmark on the other.
The envisaged co-operation should serve to diversify Greenland's economy, build stronger EU-Greenland industrial relations, contribute to Greenland's economic development and secure sustainable supply of raw materials for the EU industry as part of the raw materials diplomacy. The Letter of Intent proposes the following four areas of cooperation:
Analysis of infrastructure and investment needs related to the exploitation of mineral resources
Environmental issues related to mining and social impacts of mining
In the letter Greenland recognizes the importance of fair competition conditions and market access in order for the cooperation to be mutually beneficial. In its Raw Materials Strategy the European Commission stressed its commitment to tackle trade barriers on raw materials. The recent WTO case on rare earths against China is an example of how this commitment is put into practice. The fact that Greenland voluntarily signs up to free trade principles in raw materials trade is an important step in this direction and securing sustainable supply of raw materials through dialogue is the way to follow.
EU-Greenland relations are based on the Greenland Treaty
Greenland and the Faroe Islands are parts of the Danish Realm. Due to their exceptional position nationally, culturally and geographically these parts of the Realm have an extensive type of self-government. Denmark’s membership of the EU took effect on 1 January 1973. Home Rule for Greenland was first introduced in 1979. Hence Greenland became a member of the EC when Denmark joined the Community. After the introduction of Home Rule, Greenland held a consultative referendum in 1982 on membership of the EC, after which Greenland chose to leave the EC with effect from 1 February 1985.
The Treaty of Withdrawal is often called the Greenland Treaty (1984). In its preamble the Greenland Treaty states that arrangements should be introduced which permit close and lasting links between the Community and Greenland to be maintained and mutual interests, notably the development needs of Greenland, to be taken into account.
On its withdrawal from the Union, Greenland enjoys a special relationship with the EU through its Overseas Countries and Territories status (OCT). The purpose of the Association of the OCTs with the EC is to promote social and economic development of the OCTs and establish close and economic relations with the EC.
The EU-Greenland partnership (Council Decision 2006/526/EC of 17 July 2006) envisages six broad areas for co - operation: education and training, mineral resources, energy, tourism and culture, research and food safety. The new partnership covering the period 2014-2020 is currently being discussed. The financial means devoted to this partnership are concentrated entirely on education, as this sector was chosen by Greenland as priority for EU financial support.
The Act on Greenland Self-Government was adopted by the Danish Parliament on 19 May 2009 and came into force on 21 June 2009. The Act on Greenland Self-Government establishes that the Greenland Self-Government authorities can assume responsibility for the mineral resource area and that the Greenland Self-Government will thereby have the legislative and executive powers in the mineral resource area.
Recently, on April 12, 2011 the importance of mineral resources was stressed in the Memorandum on the Greenland Government’s Mineral Strategy including rare earth metals. It states that "the overall objective of The Bureau of Minerals and Petroleum in the field of ’geological knowledge development’ is to enhance the level of specific knowledge of attractive geological environments for mineral occurrences in Greenland and, through marketing, to encourage the mineral industry to apply for exploration and exploitation licences in Greenland." Greenland is interested in enhancing its geological knowledge base and in encouraging mineral industry interest in investing in exploration in Greenland.
For more information please visit:
International aspects of EU Raw Materials Strategy
The Development and Cooperation website on EU relations with Greenland
The Bureau of Minerals and Petroleum of Greenland