Mining officials are cheering this week’s election results in Greenland, hoping that the country’s first female prime minister will follow through on promises to support the extraction of vast mineral resources, including uranium.
With all votes counted on Wednesday, Aleqa Hammond’s centrist Siumut party won 42.8 per cent and 14 seats, while incumbent Premier Kuupik Kleist’s left-leaning Inuit Ataqatigiit garnered 34.4 per cent.
Hammond’s party now needs to cobble together a coalition that will control at least 15 seats in the Greenland Parliament.
Many Greenlanders want to use the island's mineral resources, including rare earth metals and uranium, as a way to reduce dependency on a subsidy from Denmark which now accounts for about two-thirds of the island's economy.
“Whatever government gets in will follow through on that mandate,’’ said Nicholas Houghton, President and Geo of True North Gems Inc. (TSX: V.TGX, Stock Forum), one of a handful of Canadian, U.S. and Australian companies that are working to develop mining projects in Greenland.
Others include North American Nickel Inc. (TSX: V.NAN, Stock Forum), Hudson Resources Inc.'s (TSX: V.HUD, Stock Forum) and U.S. giant Alcoa Inc. (NYSE: AA, Stock Forum). Alcoa wants to take advantage of cheap hydro electric power in Greenland by building a 600 megawatt hydro generation facility to supply power to a $5 billion aluminum smelter.
Developing a mining industry, however, would require inviting thousands of guest workers, a sensitive topic among the population of 57,000.
Kleist has headed efforts to attract international investment, but his Inuit Ataqatigiit party adheres to a zero-tolerance policy that forbids mining and selling radioactive minerals, including uranium.
Hammond has said her party was ready to accept uranium mining if the ore contains a maximum of 0.1 per cent uranium oxide.
The big hope now is that Greenland will permit mining companies to extract uranium as a by-product from rare earth deposits which are believed to be among the largest in the world outside of China, which currently accounts for 90% of global production.
Rare earth elements are key ingredients in smartphones, weapons systems and other modern technologies.
That’s why this week’s election result is likely to be welcomed by companies such Greenland Minerals and Energy Ltd., which has estimated that it could extract 40,000 tons of rare earth metals per year, with some uranium as a by-product.
The Australian Stock Exchange-listed company recently demonstrated that a high grade flotation concentrate can be produced from its Kvanefjeld project in southern Greenland where a feasibility study is currently underway and scheduled for completion this year.
Hudson Resources, meanwhile, is also hoping to develop a rare earth elements project in the Sarfartoq Carbonatite Complex in west Greenland.
However, the bulk of the company’s capital budget for 2013 will be focused on its 100%-owned White Mountain anorthosite project, where it has made substantial progress in a relatively short time, the company has said.
Hudson recently announced the first NI 43-101-compliant mineral resource estimate for White Mountain,(27.4 million tonnes in the indicated resource category, together with an inferred resource of 32.7 million tonnes) and is targeting buyers in the fiberglass market.
The company plans to submit an application for an exploitation license in early 2014.
"Cash flow from White Mountain should give us a real leg up,’’ said Jim Cambon, Hudson’s vice-president, project development, during an interview with Stockhouse.
Hudson has spent a decade exploring in Greenland, a country that Cambon said offers relatively low corporate taxes, and an environment that requires no royalty payments or the challenge of having to deal with Aboriginal land claims issues.
Permits can also be secured within a six-month window, Cambon said.
(With files from The Canadian Press and AP).