Mining
Special report
Greenland Mining & Exploration Focus
Sponsored by:
The BANK of Greenland
airgreenland.com
We know the drill With decades of experience acquired from Arctic operations, Air Greenland is your reliable and dynamic partner for exploration. You will benefit from the fact that we are part of the Greenlandic society. We have the advantage of a broad network. We know the local requirements and we have an infrastructure in the form of hangars and aircraft all over the country. We aim to provide a high level of service and this means that every single job is specifically tailored to suit the customer’s requirements. Our 12 robust AS-350 helicopters can handle almost any task. It is the ideal helicopter for sling
operations with our experienced and competent long-line sling pilots. Our 8 Bell 212s with their versatile and spacious cabins, are effective in mobilizing your exploration camp. Our Dash 7s are very flexible combi/cargo aircraft that can meet all passenger and cargo requirements. With its unparalleled STOL capability, it matches the short runways all over Greenland and it is capable of landing on frozen lakes and other simple runways. We are simply your sustainable choice in Greenland. You just have to ask.
Air Greenland Charter, Tel. +299 34 34 34, e-mail: glcharter@airgreenland.gl, www.airgreenland.com/charter
business excellence
the team
coming soon
business Contacts Editorial 0203 4399362
☎
editorial@bus-ex.com
Design 0203 4399360
☎
studio@bus-ex.com
Finance 0203 4399355
☎
accounts@bus-ex.com
Sales 0203 4399355
sales@bus-ex.com
☎
MANAGEMENT TEAM Matt Johnson Art Director mjohnson@bus-ex.com
Alaskan Special report < more info >
Insight f ro J a so n m : Br Chairm une an Alaska M Assoc iners iation
Sharon Rooke Finance Manager srooke@bus-ex.com Matt Day Head of Operations & Technology mday@bus-ex.com Andy Turner Chief Executive aturner@bus-ex.com
subscriptions & enquires info@bus-ex.com
Involved To be a part of our authoritative report aiming to give a real insight into the mining sector in Alaska; exploring emerging markets and showcasing its investment opportunities - contact us today
aturner@bus-ex.com
Jacquard House, Queen Street, Norwich, NR2 4SX. England Registered in the UK: 9037437 UK VAT registration: 190 7190 02 The content of this magazine is copyright of Hill Top Business Media Ltd. Redistribution or reproduction of any content is prohibited. © Copyright 2014 Hill Top Business Media Ltd.
HINT: For the best viewing experience, click the fullscreen icon here
contents 6
Facts & Figures
Greenlands vital statistics
Some key facts and figures about the mining industry in Greenland.
12
feature
Arctic elements
An in depth examination on how Greenland has prepared to enter the world stage as a major supplier of minerals.
22 Sponsor
The BANK of Greenland
A small bank with big influence The bank is without comparison the strongest local collaborator to help you with financing and assistance concerning day-to-day operations.
4
[ Greenland ] BE Special Report
12
BE Special Report [ Greenland ]
30
30
38
46
The Mine her ancient Ruby yields An exciting gemstone project promises to be the first fruit of Greenland’s new mining era: we spoke to True North Gems’ enthusiastic President and CEO about building a new industry.
54
GME
64
Tanbreez
Royal Arctic Line
Greenland’s lifeline Boasting more than 20 years of internal experience of sailing in Arctic waters, Royal Arctic Line and its employees have become a massively important lifeline for Greenland and the surrounding region over the last two decades.
North American Nickel (NAN)
Put a lot more nickel in The resource that North American Nickel (NAN) expects to define this summer on its Greenland property could be a game changer not just for Greenland but for the countries that depend on this vital metal to develop their industries and infrastructure.
True North Gems
Where clean power starts The Kvanefjeld Project of Greenland Minerals and Energy has been boosted by a new technical partnership and progress in both Greenland and Denmark towards regulation for radioactive materials.
Ready to roll The world needs rare earths in quantities and Greenland needs inward investment, employment and the chance to trade in global markets.
64
BE Special Report [ Greenland ]
5
Greenlands vital statistics
T
he figures speak for themselves - a country the size of Western Australia that contains as yet untold reserves of critical minerals, from uranium, gold and precious stones to iron ore, nickel and rare earths, beneath rock that is unencumbered by tree cover and rapidly (some might say too rapidly) being freed by global warming from its ice cover. As the country prepares to enter a new era Greenlanders - all 56,000 of them - stand to become very wealthy as they start to sell these raw materials to hungry markets around the world. Read on; it is all there in the numbers!
minerals found in greenland Metals • Beryllium • Chromium • Copper • Iron • Lead • Molybdenum • Nickel • Niobium • Thorium • Tungsten • Uranium • Vanadium • Zinc • Zirconium
6
Precious Metals • Gold • Osmium • Palladium • Platinum • Silver • Titanium Semi-metallic • Antimony Gemstone • Diamond • Ruby
[ Greenland ] BE Special Report
Minerals • Barite • Celestite • Coal • Cryolite • Graphite • Olivine • Phosphorus
FACT Ruby prices have risen to over $550,000 per carat set
Facts & figures
Area 2,166,086 km2 Population 56,968 Population Density 0.026/km2 (The island is the least densely populated country in the world) official language Greenlandic currency Danish Krone (DKK)
12
81%
1
Of Greenland is covered in ice
2
11
10
3 4 Key Mine sites 1. Langø 2. Maarmorilik (‘Black Angel’) 3. Qullissat 4. Eqalussuit 5. Seqi 6. Ivittuut 7. Kobberminebugt (‘Josva’) 8. Amitsoq 9. Nalunaq 10. Malmbjerg 11. Smestersvig (‘Blyklippen’) 12. Clavering Ø
5 Nuuk
6 7
89
BE Special Report [ Greenland ]
7
No. of prospective licences (Active) Source: www.govmin.gl
25
20
15
10
5 2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2007
2008
2009
2010
2011
2012
2013
2014
No. of exploration licences (granted) Source: www.govmin.gl
80 70 60 50 40 30 20 10 2000
8
2001
2002
2003
2004
2005
[ Greenland ] BE Special Report
2006
Facts & figures
Exploration drilling (metres) Source: www.govmin.gl
60,000 50,000 40,000 30,000
55,338
40,889
20,000
52,304
36,185 25,146
10,000
18,816
18,101 12,981
0
0
4,071
112
3,195
2000
2001
2002
2003
11,091
6,862
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Exploration expenses (Million DKK) Source: www.govmin.gl
800 700 600 500 400 711.3
300 471
522.3
497
518.9
200 300
100 103.4
111.8
20.8
2000
2001
2002
191
44.9
135
66.2
0 2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
BE Special Report [ Greenland ]
9
Expected employment in progressing mining projects Source: www.govmin.gl Project
Geographical location
Expected application for exploitation
Expected jobs (operation)
Expected jobs (construction)
Eudialyt/Rare earth elements
Killavaat Alannguat (Kringlerne) – between Narsaq and Qaqortoq
2013
80
35-135
Ruby/Sapphire
Qeqertarsuatsiaat (Fiskenæsset)
Application received in 2013
60-80
40-50
Iron ore
Isukasia (Isua) – North of Nuuk
Application received in 2012
680-810
Peak 3,300
Zinc/Lead
Citronen Fjord – North Greenland
2013/2014
300
-
Rare earth elements /Uranium
Kuannersuit (Kvanefjeldet) – Narsaq
2013/2014
380
1,000
Anorthosit
Søndre Strømfjord close to Kangerlussuaq
2014
50
40
Strategic priorities with respect to minerals Source: www.govmin.gl
The Government of Greenland’s objective over the next five years is to grant three to five mineral exploitation licences on an environmentally and socially sustainable basis. The mining projects may include: • The Isukasia (Isua) project (London Mining, northeast of Nuuk) • The ruby project (Fiskenæsset, south of Kuannersuit) • The Killavaat Alannguat/Kringlerne project in South Greenland • The Kvanefjeldet project at Narsaq in South Greenland • The Citronen Fjord project in North Greenland • The Anorthosit project in White Mountain in West Greenland
10
[ Greenland ] BE Special Report
Facts & figures
Focus of new government survey programmes Source: www.govmin.gl
The new targets have been determined based on global mineral demand. In this context, iron ore, gold and copper are the most important minerals based on market value. As far as government survey programmes are concerned, the focus will be on high-volume metals ore/gemstones – and on special metals such as gold and uranium, i.e. the following: • • • • •
Iron ore, copper and zinc Rare earth elements Gold Uranium Gemstones
Diagram of value-based turnover of certain mineral resources Source: Raw Materials Group, Stockholm, 2012
32%
39%
Other
Iron ore
16%
13%
• • • • • • • •
Nickel Zinc Platinum Group Metals Silver Potash Phosphate Diamonds Rare Earth Metals
Copper
Gold
BE Special Report [ Greenland ]
11
12
[ Greenland ] BE Special Report
Arctic elements Greenland is progressing with determination tempered by prudence as it prepares to enter the world stage as a major supplier of minerals, adjusting its legislation to attract investment while keeping a firm grip on the potential environmental and social impact of mining Words by
John Oâ&#x20AC;&#x2122;Hanlon
BE Special Report [ Greenland ]
13
Greenland Mining
A
t the time of writing no active mining is taking place in Greenland since the closure of the exhausted Nalunaq gold mine in 2013. Considering how much attention we have given in our pages to the companies that have an interest in developing the huge mineral resources of this country over the last two years, this may appear a depressing statement. Far from it. Greenland is an island the size of Western Australia and has deposits as diverse and accessible; it is no accident that Australian prospectors are among the international companies working alongside the governments of Greenland and its parent state Denmark to create an industry here, and as we shall see, that process is in an advanced stage of development.
“Greenland is entering a new era – that is no exaggeration” Meanwhile let us consider once again the advantages that this island enjoys, alongside some of the challenges. While it is true that unlike WA most of Greenland is locked under an ice sheet that is two miles thick in places, it has more than 27,000 miles of coastline. The ice-free coastal hinterland up to 200 miles inland is everywhere devoid of agriculture or tree cover other than in South Greenland where sheep farming and growing of some vegetables occur: the population of under 60,000 has traditionally depended on fishing, and of course still does. However this makes it ideal for modern aerial surveying and something of a geologist’s paradise – Greenland is a break-off from the Canadian Shield, so its geology is
14
[ Greenland ] BE Special Report
similar and predictable. It also means that the deposits are never far from the coast. There’s not much in the way of ports, and infrastructure costs have to be factored in, but it does mean that bulk minerals can easily be enshipped for transport to the comparatively nearby markets of Europe and the Americas. Despite the absence of producing mines, Greenland can be regarded as a potential global mineral source. The opportunity can be taken to prepare the way both to encourage investors to develop infrastructure and production and to optimise the new industry for the benefit of the country. “Greenland is entering a new era – that is no exaggeration” affirms Dr Henrik Stendal, head of the Geology department at the Ministry of Industry and Mineral Resources (MIM). The next five years will be crucial, and the government wants to proceed without undue delay, though without undue haste either – it is determined to get things right. The strategy for activity over 2014-2018 inclusive is designed “to maintain a high level of oil/gas and mineral exploration activity, to further the chances of making commercially viable oil or gas finds and to incentivise the mineral resources industry to obtain exploration and exploitation licences.” By the end of this period, it would like to see up to five working mines up and running. An important intermediate goal for MIM is to set up Greenland’s own national geological GeoSurvey Greenland (GSG) within the strategy period. Another is to have the Mineral Resources Act amended to allow environmental protection in the context of mineral resources activities to be separated from the general mineral resources authority under the Ministry of Environment and Nature. Development must be sustainable, says the strategy document, and must therefore take place
Siggartartulik Deposit Surface showing by True North Gems
BE Special Report [ Greenland ]
15
North American Nickel have been drilling in the Maniitsoq area for the last two years
with the greatest possible respect for our environment and nature and not least for all the people living in Greenland. The first mine to open is likely to be the Fiskenaesset Ruby Project, located on the south-west coast, about 100 miles south of the capital Nuuk. The owner of
“Both rubies and pink sapphire have been found in abundance, and this promises to be a very viable project”
16
[ Greenland ] BE Special Report
this project, Vancouver-based True North Gems has obtained its mining permit and also its Impact Benefit Agreement (IBA; an essential permit stage agreed between the company, the government and local representatives), signed in June, and is ready to proceed later this year or early next once it has completed its financing arrangements. Both rubies and pink sapphire have been found in abundance, and this promises to be a very viable project according to Stendal. However it is quite small in scale compared with some. “There’s a large nickel camp in the Maniitsoq area just to the north of Nuuk here. North American Nickel has been drilling there for the last two years and they have an extensive
Greenland Mining
programme.” That is true – the company says it has flown more than 4,000 miles of helicopter surveys, and last year it drilled more than 1,500 metres on the 4,983 square kilometre nickel-cobalt project. “They are hoping to define a resource this summer, so that then they can make an application for exploitation – this is a really promising project!” he says. The Maniitsoq area has seen relatively little exploration activity given its very large size and abundance of nickel occurrences. This deposit, it is thought, represents the remains of a gigantic, three-billionyear-old meteorite impact, and displays a similar geological formation that is found in Canada’s Sudbury Basin. Maniitsoq revels in a climate that
“NAN’s nickel property at Maniitsoq is a really promising project”
keeps it free from ice all year round. The same is true of London Mining’s iron ore project at Isua, less than 100 miles north east of Nuuk. Its 30 year exclusive exploitation licence was awarded on 24 October 2013, and the company is currently negotiating an IBA. This is a large resource at 1.1 billion tonnes and the potential for further resources. Isua could sustain a 15 million tonnes of concentrate
BE Special Report [ Greenland ]
17
Your rock-solid business partner With more than 45 years of local experience, The BANK of Greenland is your reliable business partner in exploration and extraction in Greenland. You benefit from our know-how, extensive network, competitive prices and our strong risk profile. We know the decision-making process and work closely together with most companies involved in the national mining industry.
The BANK of Greenland +299 70 1234 â&#x20AC;˘ banken@banken.gl â&#x20AC;˘ www.banken.gl
Greenland Mining
per annum operation, with 70 percent iron, for 20 years. A bankable feasibility study was completed in 2012 however the investment package of $2.3 billion has yet to be finalised. China is hungry for these minerals, and London Mining has been involved in negotiations that MIM has been carrying out with the China Development Bank – the next visit to China will take place in the autumn in connection with the yearly China Mining, says Henrik Stendal, who is keen to get the iron ore project off the ground: “Each time we meet them we move a step forward.” As mentioned, Greenland has a very small population and the government has been very nervous about its inability to meet the personnel demands of a new industry – which in cases like London Mining’s might run to thousands. There’s no doubt that workers will have to be brought in, and their impact will be considerable. There simply aren’t enough skilled workers in Greenland to fill all the jobs the mines will create. Some see this as a benefit if the miners will live in the community, send their children to school, and spend their money with local businesses. Others fear that the influx will destroy the Greenlanders’ way of life. The Large Scale Act as passed in 2011 and amended in autumn last year has cleared the way for mining companies to bring a large labour force into the country though, and this should help to secure confidence among investors. There is one rather exciting new project that belongs to Hudson Resources of Vancouver. Hudson formerly developed a rare earth elements (REE) project at Sarfartoq, and it has now made progress with its Naajat (White Mountain) anorthosite (calcium feldspar) project close to Kangerlussuaq, Greenland’s international airport. This material offers the opportunity to quickly establish a
Hudson Resources are hoping to put in an exploitation licence to the Ministry later this year
mine to supply the fibreglass industry with feed material as a replacement for kaolin. It also has the potential to replace bauxite in the production of alumina and provide solutions for the very large mineral filler/extender market. According to Dr Stendal the company has recently established with potential fibreglass industry partners that the anorthosite block contains low quantities of sodium, a quality they look for. “Hudson is hoping to put in an exploitation licence to the Ministry later this year – and since the project was only started 18 months ago it has moved forward very quickly to this point.” Down at the southern tip of the country Tanbreez Mining Greenland sees its massive eudialyte deposit
BE Special Report [ Greenland ]
19
“We are expecting Greenland Minerals & Energy Ltd, the owner of the licence, to lodge an application for exploitation of both uranium and rare earths before the end of this year – then we can start uranium mining in Greenland!”
providing uncontaminated light and heavy rare earths for hundreds of years to come. Tanbreez is not another difficult Greenlandic name but a portmanteau of the tantalum, niobium, zirconium and rare earths in the ore body. Its Australian founder Greg Barnes believes that the deposit will be a game changer for the world REE market, and he’s probably right considering its accessibility and the fact that it contains half of global resources
Tanbreez taking some lake settlement samples
20
[ Greenland ] BE Special Report
outside of China, which has hitherto had a near monopoly. Tanbreez is on a fast track to full permitting. The adjacent Kvanefjeld deposit also contains significant quantities of REEs however these are associated with uranium. Until recently Denmark and Greenland being staunchly nonnuclear would not countenance uranium mining. This ban however was lifted last year, and Stendal expects all the requisite
Greenland Mining
Greenland Minerals & Energy have been operating in Greenland since 2007
legislation to be in place by early 2016. “We are expecting Greenland Minerals & Energy Ltd, the owner of the licence, to lodge an application for exploitation of both uranium and rare earths before the end of this year – then we can start uranium mining in Greenland!” Finally, Dr Stendal points out that even the seasonally ice-locked north is now open for exploration and development by companies that respect the sensitivity of this Arctic environment. Another Australian company, Ironbark Zinc, is continuing to advance its Citronen project, which represents one of the world’s largest undeveloped zinc-lead resources, in excess of 13 billion pounds of contained zinc and lead metal. To date more than 67,000 metres of diamond drilling has been completed at Citronen Fjord, which is potentially a very large type of deposit.
We may have been passing through a period of depressed commodity prices on global markets, and China’s industrial growth may have slowed somewhat but these conditions will pass, and Greenland will undoubtedly be a leader in providing the minerals that will be needed as demand for increased infrastructure starts to be met and capital markets recover. It will be a busy time for MIM together with the Mineral Licensing and Safety Authority (MLSA, formerly BMP) as it coordinates all the associated licensing and permitting activity.
Learn more about Ministry of Industry and Mineral Resources (MIM) and the Mineral Licensing and Safety Authority (MLSA). www.govmin.gl
BE Special Report [ Greenland ]
21
22
[ Greenland ] BE Special Report
A small bank with big Influence The BANK of Greenland According to international standards, The BANK of Greenland is a small bank. But in Greenland, the bank is unconditionally the largest bank. And if you want to operate in the Greenlandic mineral resources industry, the bank is without comparison the strongest local collaborator to help you with financing and assistance concerning day-to-day operations Words by
Ditte Vibe Petersen
BE Special Report [ Greenland ]
23
ith a total business volume of DKK 2.74 billion, The BANK of Greenland is only a small financial institution internationally. In Greenland, however, the bank is the largest bank and the only physically available full service bank. With a strong local mooring and more than 45 years of close cooperation with Greenlandic industries and public institutions, the bank takes the absolute lead as a partner for businesses in the Greenland mineral resources industry. We know the decision-makers in Greenland. We know the people who explores. We know the people who are close to extraction. Last but not least we know all the enterprises that offer services to the mining companies. And of course our network of national and local partners benefits our customers, says Lars Gaasvig, Commercial Lending Manager at The BANK of Greenland. He continues: The BANK of Greenland is a modern bank with a European level on products, services and web bank. But what really makes us the preferred financial institution in Greenland is our thorough knowledge of the Greenlandic rules, businesses, financing matters and our understanding of the cultural conditions and local community. We reach our decisions locally, and we provide answers faster than most others, says Lars Gaasvig, Commercial Lending Manager.
W
“We know the decisionmakers in Greenland. We know the people who explores. We know the people who are close to extraction”
24
[ Greenland ] BE Special Report
Managing Director Martin Kviesgaard © The Bank of Greenland
The BANK of Greenland
â&#x20AC;&#x153;Accessibility is an important parameter for the work carried out in the Business Department of The BANK of Greenland. The department is known for its frequent customer visitsâ&#x20AC;? Accessibility is an important parameter for the work carried out in the Business Department of The BANK of Greenland. The department is known for its frequent customer visits. And most recently the department has introduced a new service in the form of video meetings. The active effort made by the Business Department is acknowledged by its customers. Last time the Business Department was measured, customer satisfaction reached almost 78 percent. That is a customer satisfaction level that is several percentage points above the average level at Danish financial institutions.
National expertise and local mooring With six branches in Greenland, The BANK of Greenland is well represented. The headquarters is situated in the capital Nuuk, and this is also where Account Manager Carsten Bondersholt is working on a daily basis. The Account Manager has practical experience with mineral resources projects in all phases from when the first geologist goes out with his spade to the extraction phase itself. In particular it is escrow accounts and current accounts that we provide to the mining industry today. Naturally we also provide most financial services for example financing
BE Special Report [ Greenland ]
25
of production, buildings and working plants, yield optimization of surplus available funds, cash management, guarantees and webbased solutions, says Carsten Bondersholt, Account Manager. The most recent collaboration between The BANK of Greenland and the mineral resources sector in Greenland is the involvement in what is expected to become the very first ruby mine in the Arctic. The project is under management of the company True North Gems, and the bank is actively engaged with advice about the day-to-day operations and expects to provide a part of the financing. Account Manager Carsten Bondersholt emphasises that the customers have a clear advantage in The BANK of Greenland being a multi-language enterprise that professionally provides service in English, Greenlandic and Danish. At the same time the bank has close relations with Europe on a par with other modern Scandinavian banks. The BANK of Greenland also takes pride in being consistently represented at all courses, conferences and network arrangements about the mineral resources of Greenland. At The BANK of Greenland we are first and foremost experts in networking - we are not yet definite experts in mining. We are gaining a lot more insight into the topic, however, because we believe the sector to be one of the important new industries in Greenland, says Carsten Bondersholt, Account Manager.
© Nuna Minerals
Strong financial performances The financial performances of The BANK of Greenland are sound. The quarterly and annual
“At The BANK of Greenland we are first and foremost experts in networking - we are not yet definite experts in mining”
26
[ Greenland ] BE Special Report
The BANK of Greenland
© True North Gems
DKK 55 per share distributed reports of recent years have Did you know? last year. In May 2014 The BANK shown record results, and the of Greenland was selected as annual report 2013 shows a good 78% the financial institution with result of DKK 124 million before Level customer the second best risk profile tax and a return on shareholders’ satisfaction in the Kingdom of Denmark. equity of 15.8 percent before tax. reached last The survey was undertaken by In the wake of the global financial time the Business Niro Invest, who examined 75 crisis it is worth noticing that The Department financial institutions’ key factors BANK of Greenland has come was measured such as gearing, solvency ratio out strong and each year with and core earnings on the basis sound profits. At the same time of annual reports. Finanstilsynet (Danish Financial The BANK of Greenland has Supervisory Authority) has had for a large number of years no substantial remarks after been able to show a sound performance, ordinary visits to the bank where in particular and the reason for this is a stable business solvency is on the agenda. There is nothing development. If I am to point to the most surprising about that, if you take a look at the important reasons, I would point to our solvency ratio of The BANK of Greenland of physical presence with six branches, approximately 20 percent against a solvency competitive prices and our very active requirement of approximately 10 percent. endeavours at the coast of Greenland, says As an investment The BANK of Greenland Managing Director Martin Kviesgaard. share is also interesting with a dividend of
BE Special Report [ Greenland ]
27
Š Nuna Minerals
28
[ Greenland ] BE Special Report
The BANK of Greenland
Lars Gaasvig, Commercial Lending Manager (left) © The Bank of Greenland
“The bank concentrates its CSR activities on efforts that heighten the financial understanding in Greenland”
Active in Greenland community The active endeavours of The BANK of Greenland also include an increasing number of Corporate Social Responsibility projects. In 2010 the bank co-founded the association CSR Greenland known for its price nominated environmental project Saligaatsoq. CSR Greenland continually plays a part in ensuring a continued dialogue among Greenlandic business and industries about social responsibility. Most recently the bank joined the UN Global Compact network that commits its members to reporting and making policies on the environment, anti-corruption and human rights among other things. In particular, however, the bank concentrates its CSR activities on efforts that heighten the financial understanding in Greenland.
Examples are presentations at educational institutions and a new online platform “Qassit” about everyday finances targeted pupils in the primary and lower secondary schools. You may also be fortunate to meet one of the bank’s 115 staff members engaged in corporate volunteering. In 2014 the bank has made more than 2,000 working hours available to staff to engage in voluntary social work for associations and projects in Greenland.
The BANK of Greenland
+299 70 1234 banken@banken.gl www.banken.gl
BE Special Report [ Greenland ]
29
Photo: Lars SvankjĂŚr
Royal Ar
Greenland
Boasting more than 20 years of internal experience employees have become a massively important lifelin liner services with servicing businesses within words by
30
[ Greenland ] BE Special Report
W
rctic Line
dâ&#x20AC;&#x2122;s lifeline
of sailing in Arctic waters, Royal Arctic Line and its ne for Greenland. The Company combines its regular Greenlandâ&#x20AC;&#x2122;s emerging mineral and oil sectors
Will Daynes BE Special Report [ Greenland ]
31
Photo: Dan Boman
Operating in remote areas with little or no infrastructure comes with establishing mines in Greenland
32
[ Greenland ] BE Special Report
Royal Arctic Line
or more than 20 years (since 1993 to be exact) Royal Arctic Line has been a premier provider of specialist services and skills to customers in Greenland and the wider Arctic region. Wholly owned by the Government of Greenland, Royal Arctic Line and its vessels hold an exclusive concession for the transportation of general supplies by sea to and from Greenland, and between the various Greenlandic towns and settlements. Through its subsidiary, Royal Arctic Bygdeservice, goods are also carried to all the settlements, while Royal Arctic Havneservice handles operations in the 13 biggest ports and harbours in Greenland, and at the same time represents the port authority on behalf of the state in these ports and harbours. Forwarding activities such as air freight, combined air/sea freight and consolidated are undertaken by Royal Arctic Logistics. Furthermore, the group is also a major supporting player within Greenland’s oil and mineral exploration sectors with activities in these fields being undertaken by Arctic Base Supply, a business co-owned by Royal Arctic Line and Norwegian Norsea Group. A quick glance over the aforementioned services really does highlight why the company has come to be seen as one of Greenland’s most important lifelines. Greenland, and indeed the other countries that exist within or between the Arctic and Atlantic Oceans, of course comes with its own unique environment and climate, and thus its own unique challenges. It stands to reason therefore that not just any company, shipping or otherwise, is suited for servicing the country. Rather it takes those with market leading experience, knowledge and capabilities to earn business in this remote part of the world. “What you have with much of Greenland is an environment typified by difficult weather and geological conditions, and little or nothing in the way existing infrastructure,” explains Royal Arctic Line’s Commercial
F
BE Special Report [ Greenland ]
33
Director, Niels Clemensen. “What we have as a business is a large degree of competency, experience and understanding of what it is like to operate within the Arctic. Alongside this we have the physical assets of a fleet of vessels and equipment specifically designed with the Arctic environment in mind.” The fleet that Clemensen speaks of consists of ten ships, each meticulously designed to overcome the challenges that operating in the Arctic possesses. The company’s biggest ocean-going vessels and feeder ships are
34
[ Greenland ] BE Special Report
of the highest Baltic ice classification and have been specially-built with double hulls and high freeboard so they can sail in Arctic waters. All the ships are fitted with cranes and are supplemented with the shipping company’s barges. “Our vessels are designed especially for carrying out trade to and from Greenland, and for sailing on the North Atlantic, which is of course a very rough sea,” Clemensen continues. “All equipment on board is designed to operate down to -30 degrees,
Royal Arctic Line
Royal Arctic Line’s fleet is designed for Arctic conditions and able to operate just about everywhere in Greenland
“Our vessels are designed especially for carrying out trade to and from Greenland, and for sailing on the North Atlantic”
which is the standard that we work to given that we understand the demands that can be placed on this equipment, especially during the Arctic winter. It is vital to remember at all times also that when working in this part of the world there is almost never a time when there isn’t a huge distance between yourself and the nearest spare part or support vessel. With that in mind the utmost attention to detail goes into each operation our vessels conduct.” Arriving at Greenland in the search for minerals presents the industry with the
BE Special Report [ Greenland ]
35
challenge of overcoming a remote landscape lacking in infrastructure. Fortunately for these companies Royal Arctic Line and its subsidiaries are more than used to operating under such demanding conditions. The company prides itself on the wide range of logistical and transportation services it can offer its customers. Particular solutions of note include the transport of fuel, machineries and special cargo, regular connections to the US and Canada, consolidation of cargo before shipment, monitoring and surveying,
ice management, forwarding services and preparation for sling operation from barges. To date Royal Arctic Line has been a major provider of logistics support during the construction and operation of several notable mines such as the Olivine Mine and Nalunaq Gold Mine in Greenland. “The services and equipment we have available to the mineral sector are varied enough to support all stages of mineral development, be it the construction, production or operational stage of a mine’s
“The services and equipment we have available to the mineral sector are varied enough to support all stages of mineral development”
Delivering supplies to Antarctic bases includes operating directly on the ice cap
36
[ Greenland ] BE Special Report
Photo: Lars Svankjær
Royal Arctic Line
Ice management is crucial when operating in Arctic waters
life,” Clemensen enthuses. “The most important thing to remember is that all of these mines are established in the most remote of locations, miles from what few established towns there are and with practically no infrastructure in place to support their growth. What makes us unique is that we are able to reach such locations, places that other shipping companies cannot, and we have the built in knowledge, systems and capabilities required to immediate begin supporting customers in the mineral industry regardless of what stage of development they find themselves.” Royal Arctic Line has also taken the initiative in examining other business opportunities, both in Greenland and further afield. “We also recognise the need to target specific niche markets that are best suited to benefit from our fleet and our unique
capabilities,” Clemensen highlights. “So, for example, we have spent the last five years providing supply services to Antarctic bases belonging to the likes of Belgium, Germany and the UK, to name a few countries, while one of our vessels is regularly leased out to the Norwegian Polar Institute to supply their base. These are the kinds of niche, yet hugely important, jobs that our vessels can undertake and that those belonging to other container lines are unable to.”
Royal Arctic Line
+299 34 91 00 kundeservice@ral.gl www.royalarcticline.com
BE Special Report [ Greenland ]
37
North America
Put a lot mor
The resource that North American Nickel (NAN) property could be a game changer not just for G this vital metal to develop thei words by
38
[ Greenland ] BE Special Report
Joh
an Nickel (NAN)
re nickel in
) expects to define this summer on its Greenland Greenland but for the countries that depend on ir industries and infrastructure
hn Oâ&#x20AC;&#x2122;Hanlon BE Special Report [ Greenland ]
39
ickel may be one of the most common elements in the earth’s crust but that does not mean that it is the most accessible. Unlike some metal commodities, the global supply of nickel is concentrated in a handful of regions of the world. According to the US Geological Survey, in 2011 Russia was the world’s largest producer of nickel followed by Canada, Australia, Indonesia and the Philippines. It is generally believed that ‘major igneous events’ cause this otherwise inaccessible element to appear close to the earth’s surface – well igneous events don’t come much larger than the 20 mile diameter meteor that smacked into Greenland three billion years ago, tearing open a crater some 60 miles wide. It’s the oldest and biggest meteor impact identified on earth so far and its discovery in June 2012 by researchers from the Geological Survey of Denmark and Greenland (GEUS) may help to explain the abundance of nickel in the Maniitsoq area 100 miles to the north west of Nuuk. When the meteor hit Maniitsoq, it caused nickel-rich magma from the earth’s mantle to flow up into its crust. These nickel-rich magmas are preserved as the Greenland Norite Belt, which is the focus of North American Nickel’s exploration programme. On August 15, 2011 the company was granted an exploration license by the Bureau of Minerals and Petroleum of Greenland
N
“When the meteor hit Maniitsoq, it caused nickel-rich magma from the earth’s mantle to flow up into its crust”
40
[ Greenland ] BE Special Report
Helicopter-assisted off-loading of equipment and supplies at NAN’s Maniitsoq property in Greenland
North American Nickel (NAN)
“We hire local people not just for camp administration work but also for the more technical jobs” (formerly BMP, now the Mineral Licence and Safety Authority or MLSA). This gave the company exclusive exploration rights over an area totalling nearly 5,000 square kilometres located near Sulussugut. As Dr Mark Fedikow, NAN’s President and Interim CEO explains this was a massive area, and it was important to reduce it to a more manageable size once the most productive areas for drilling had been identified by helicopter-borne surveying. “Initially we held the largest ground position in Greenland, but part of the regulatory process requires that you diminish your asset progressively. We have reduced ours to a little over 3,600 square kilometres now.” NAN is probably spending more within Greenland than any other company this year – around $9.5 million. This is a very significant project for the nascent Greenlandic mining industry, and Dr. Fedikow is enthusiastic about the level of cooperation he has encountered from the government and local communities. It is tempting to compare Maniitsoq with the Sudbury Basin in Canada, whose nickel deposits are related to a meteor impact, but in fact it is geologically different and in many other ways Greenland has advantages over Canada. The first of these is in the terrain. “There is virtually no soil or tree cover, so from a helicopter you are always looking at bare rock.” This suits modern airborne geological mapping
BE Special Report [ Greenland ]
41
Emplacement of a survival hut at a NAN drill site
techniques like VTEM (versatile timedomain electromagnetic system) used for identifying electromagnetic conductors such as semi-massive to massive sulphide mineralisation. NAN has flown more than 5,700 kilometres of survey, and in these conditions Fedikow says you can maintain a constant height over the rugged terrain with the helicopter-borne geophysical survey, looking a couple of hundred metres into bedrock. Working with the government in Greenland is a pleasure compared with many jurisdictions, he continues, because of the steps the authorities have taken to achieve transparency. The regulatory regime is straightforward, the rules clear, and the culture enabling for a responsible mining company. And Greenland has to be unique in that there is no such thing as private ownership of land – it all belongs to the state. There are no special interest groups or layers of administration to contend with. This does not mean that local communities are any the less respected and involved, he hastens to add. Best practices are in place for consultation, maximising the level of local subcontracting and employment just as they would be anywhere else. So on the ground the company has a crew of 34, including a number of Greenlanders. “We do try our best to hire local people, despite the fact that there are only 60,000 people in the entire country!” There is a government supported programme that is training Greenlanders for the mining industry, he notes. “They are moving ahead
“Helicopters are critical for us to get to and from our drill sites on the property”
42
[ Greenland ] BE Special Report
North American Nickel (NAN)
NAN’s Project Manager James Sparling examining a norite rock sample, Maniitsoq property
with that, and we do hire significantly impact time in the Did you know? the people according to our air for helicopters. “Helicopters are critical for us to get to needs and the skills available. and from our drill sites on the We also hire local people not 20 miles property, he explains, so the just for camp administration Diameter of the weather impacts everything. If work but also for the more meteor that created it is kind and the sky stays clear technical jobs, helping us by the Maniitsoq till September and the results cutting and sampling of the nickel deposit we are expecting are realised, core and preparing samples the staff, the equipment and for analysis. They are doing an 10 kilometres the finance is in place to excellent job.” This year’s optimum complete 10,000 metres.” This summer, NAN is drilling target The three targets mentioned drilling intensively, with one will get most of the attention, eye on the weather. The 2013 says Fedikow, because NAN’s drill programme led to the clear goal is to build tonnage based on recognition of the Imiak Hill Conduit Complex nickel, copper cobalt and platinum group (IHCC) which includes Imiak Hill, Imiak North metals (PGM) mineralisation at the IHCC and Spotty Hill, three mineralised zones and potentially define an inferred resource. within 1.6 kilometres of one another. “This “Ultimately the simple question is, can we year we will drill a minimum of 4,700 metres build a resource with sufficient tonnage at a of core. That could be increased to as much grade that will allow us to go into production?” as 10,000 metres, but that depends on That question is being addressed through results and the weather. In August fog can
BE Special Report [ Greenland ]
43
Dr. Mark Fedikow President & Interim CEO
Cecil Johnson, NANâ&#x20AC;&#x2122;s senior prospector examines a gossanous norite outcrop, Maniitsoq property
44
[ Greenland ] BE Special Report
Mark has 35 years of industry and government experience as an exploration geochemist and mineral deposits geologist. He has worked for major and junior mining exploration companies and the Manitoba Geological Survey completing his employment at the Survey as Chief Geologist of the Mineral Deposits Section. In 2001, Mark was the recipient of the Provincial Geologists Medal, a Canadian national award for outstanding g e o s c i e ntif i c achievement. Mark is also a Fellow of the Association of Applied Geochemists.
North American Nickel (NAN)
“As time went on the results were so promising that we thought again and said perhaps we would build a mine ourselves”
the drill results, and constrained by a conceptual economic scenario that is being prepared in collaboration with global mining consultancy Golder Associates. This will provide an estimate for the necessary nickel resource and the feasibility of building a mill, starting mining, , and marketing the product. The next steps will depend on what the Golder preliminary economic scenario concludes.. Originally the game plan was to define the resource and then involve a major nickel miner to come in and take the project over, he says. “As time went on the results were so promising that we thought again and said perhaps we would build a mine ourselves. That is one reason why we contracted Golder Associates to give us a picture of how we might proceed and how the economics would stack up.” It will depend on what is in the best interests of the NAN shareholders, he says, but he is looking at a precedent that was set with the discovery of the Reed copper deposit in Manitoba in 2007 by NAN’s sister company VMS Ventures. In that case a 70/30 joint venture with Hudbay Minerals was established, with Hudbay building and operating the mine and VMS retaining a minority interest. “That might be the route we take in Greenland.” Regardless of the manner in which NAN moves forward its intention is to build a
Massive pentlandite-chalcopyrite mineralization in drill core from the Maniitsoq property
nickel-copper-cobalt-PGM resource that will lead to an exploitation licence application. The Greenland government is supportive and keen to see this become one of the early producing mines – one that will put Greenland firmly on the world nickel map at a time when stalled infrastructure in developing economies is expected to get under way. Nickel demand is directly linked to infrastructure growth, a fact that will not be lost on investors as they look at North American Nickel.
North American Nickel (NAN)
604-986-2020 info@northamericannickel.com @NAmericanNickel www.northamericannickel.com
BE Special Report [ Greenland ]
45
46
[ Greenland ] BE Special Report
The Mine her ancient Ruby yields True North Gems An exciting gemstone project promises to be the first fruit of Greenland’s new mining era: we spoke to True North Gems’ enthusiastic President and CEO about building a new industry words by
John O’Hanlon
BE Special Report [ Greenland ]
47
Nick Houghton, President and CEO, holding a sample at Qaqat Aqulerit
he finest rubies are rarer and more valuable than diamonds and for many the icy brilliance of the latter is no match for the colour, warmth and romance of the former. Their prices are on the rise too: the record of just under $275,000 per carat set in 2005 has since risen to over $550,000. The worldâ&#x20AC;&#x2122;s richest source of fine rubies, Burma, is still under an embargo and the market
T
48
[ Greenland ] BE Special Report
is hungry for gemstones of that quality, particularly if they can be certified ethical. In that context, True North Gemsâ&#x20AC;&#x2122; Aappaluttoq Ruby Project is coming on stream at just the right time for the ruby market, which is worth $2.1 billion annually. Basically, ruby is a form of aluminium oxide (Al2O3), or corundum, which at nine on the Mohs scale sits just one place lower than the hardest element
True North Gems
“Once the mine life is completed and the area reclaimed it will just look like a glacial lake again”
diamond. Demand today, says Nick Houghton, President and CEO at True North Gems, who has lived and breathed gemstones since he started work in 1974, is almost entirely from the jewellery trade: “There are some industrial uses for corundum but the main one, as an abrasive, is nowadays satisfied by synthetic material.” The Aappaluttoq Ruby Project, presently 100 percent owned by True North Gems is
BE Special Report [ Greenland ]
49
Rough surface showing at Qaqat Aqulerit
a unique opportunity for the world market to source first quality traceable gemstones that satisfy their customers’ growing demand for jewels that are free from any taint of conflict or human exploitation. Both ruby and pink sapphire (red and pink varieties of corundum), are found here. Multi crystalline stones weighing more than 80 grammes (400 carats) have been found. Located on the south-west coast of Greenland, about 160 kilometres south of the capital Nuuk, the site is accessible all year round, and just four kilometres from open water. The mine is now fully permitted since the local authority, the Municipality of Sermersooq and City Council, approved its Impact Benefit Agreement in June (IBA). In Greenland an IBA, essential for every prospective mine, is no formality – it testifies to the need to develop the project in a sustainable manner, with jobs, training opportunities and economic benefit to the local community, Houghton emphasises. “We were able to show that everything is in place. The IBA was a huge achievement – it is a partnership between us and the communities and the people of Greenland.” That was just the latest in a string of achievements this year for the company. In March it was granted a 30-year mining licence, or exploitation licence, paving the way to mine construction, which True North Gems is looking to commence later this year. Nick Houghton gives full credit to the Greenlandic authorities, in particular the Ministry of Industry and Mineral Resources and the Mineral Licensing and Safety Authority (MLSA,
“The IBA was a huge achievement – it is a partnership between us and the communities and the people of Greenland”
50
[ Greenland ] BE Special Report
True North Gems
Rough Ruby and Pink Sapphire liberated from host
formerly BMP) in smoothing the partner LNS Greenland who Did you know? path to this vital milestone: “We will earn a project share of 20 percent by doing so, an are working in a country that experienced company that recognises that you need to be 30 years combines Greenlandic and able to plan long term. That long Duration of TNGs’ Norwegian expertise. “Impact term thinking on the part of the mining licence will be minimal. This is a simple government is essential to the open pit: Once the mine life success of any mining operation: 100 is completed and the area you have to be able to work with Personnel reclaimed it will just look like a the government as well as the employed at full glacial lake again, with no visual local people.” production sign it was ever there. There will The exploitation be reclamation of roads and the agreement was followed by camp, of course but minimal the operating licence and invasive action. There’s no massive road rigorous environmental and social impact programme, no blasting through rock.” assessments. Greenland may seem a Though it’s a rich deposit, it is a bit of a relatively sparse country, both in terms of myth that one can pick up rubies from the population and vegetation, but that is part surface. “The ore body runs like a spine of the reason it is determined to develop through the middle of the mine,” he explains. its resources with minimal adverse impact “The reason you can find anything at all on on either, Houghton insists. The open pit the surface is that there is no overburden mine and its infrastructure will be built as in Greenland. It is bare rock with only a few a turnkey operation by True North’s JV
BE Special Report [ Greenland ]
51
mosses and lichens to cover it. But you cannot pick much up because the material is locked in the host rock.” Unlike a mineral ore that can be crushed, this material is extracted almost surgically from the spine, in blocks that are broken down and go through an irritative crush system, which he describes as more of a ‘squeezing’ than a ‘pounding’ operation. Once the gemstones have been liberated they are taken to the next stage of the process - dense media sorting (DMS) magnetic sorting (MS) and optical sorting. DMS and MS depend on the fact that the host rock is lighter and
the corundum will sink. Optical sorting is simple - the host rock is grey-black in colour, the corundum red and pink. At the end of the sorting stage gemstones go on for secondary cleaning and grading. At full production the company will employ up to 100 people, the majority based at the mine site, the remainder at the administrative and downstream grading centre in Nuuk. For the time being True North has taken premises within the Bank of Greenland building, but hopes to later build its own secure premises in the city for processing the gemstones and
“We need builders, mechanics, electricians, chefs, and we help them acquire the more specialised skills”
Taking geological notes at the Aappaluttoq Deposit and Sarfaq Showing
52
[ Greenland ] BE Special Report
True North Gems
Bent Olsvig Jensen, Managing Director, at the Aappaluttoq Camp
setting up a training centre where local people will be taught the skills involved in grading, cleaning, selecting and packing the stones. Mining may be a new industry, but Greenlanders are already well versed in many of the skills it needs says Houghton. “The Cummins and Iveco engines used in fishing boats are just the same as the ones we use in mining trucks. If you can work on the one you can work on the other. Electricians and mechanics in the local population can bring those skills – it is a matter of moving your existing skills to a different challenge! We need builders, mechanics, electricians, chefs, and we help them acquire the more specialised skills.” His priority is now to complete the project’s capex requirements, though that task has been made considerably lighter by the JV agreement with LNS, which has brought in $23 million, or 60 percent of the money needed. He is trying to educate investors who, while they may be familiar with the landscape of mineral mining, where a resource is defined
in terms of ounces or pounds of defined value on the metal exchanges, may not appreciate the added complexity of gemstone mining where the product extracted can vary in value from two to two thousand dollars per carat. He would like them to look at the example of another listed gemstone company, Gemfields PLC, which has proved through the performance of its Zambia emerald deposit that when a company comes to market with a consistent supply of goods its share price can increase dramatically. Gemfields has doubled in the last year, and he is confident the same will happen with True North.
True North Gems
604.687.8055 info@truenorthgems.com @TrueNorthGems www.truenorthgems.com
BE Special Report [ Greenland ]
53
54
[ Greenland ] BE Special Report
Where clean power starts Greenland Minerals and Energy The Kvanefjeld Project of Greenland Minerals and Energy has been boosted by a new technical partnership and progress in both Greenland and Denmark towards regulation for radioactive materials words by
John Oâ&#x20AC;&#x2122;Hanlon
BE Special Report [ Greenland ]
55
Looking south over Narsaq towards the north Atlantic
ince we last looked at Greenland Minerals and Energy A/S (GME), a subsidiary of Perth (Australia) based Greenland Minerals and Energy Ltd, a great deal of progress has been made. To recap, GME entered the Greenland scene in 2007 when it acquired a majority interest in an exploration licence covering the northern Ilimaussaq Complex, subsequently increasing that to 100 percent. The Kvanefjeld is the largest global example of a uranium and rare earth deposit, so it contains two of the most
S
56
[ Greenland ] BE Special Report
sought after groups of raw materials, Rare earth elements (REEs) in particular make up a group of metals that have properties that are needed in mobile communications, battery technology, green energy generation, superpowerful magnets, smart lighting and a host of other up and coming technologies. Currently China has a massive lead in the mining and downstream exploitation of rare earths. It controls more than 90 percent of global REE production, and. The quota system by which it has controlled the market
Greenland Minerals and Energy
“In April we signed a MoU with NFC with the aim working together to establish a Strategic Cooperation Agreement”
today has discouraged the growth of these industries in the western world and skewed the market, so any major alternative source that is accessible and reliable is bound to create a buzz. With the scale to supply at least 30 percent of the urgent and growing need from European and North American markets GME’s Kvanefjeld project is well placed to become one of the world’s largest and most cost-effective producers of these speciality metals. Only ten kilometres from ice-free water, 40 kilometres from an international
BE Special Report [ Greenland ]
57
Southern Greenland allows for almost year round exploration
airport and close to available low cost power it has a multitude of advantages, says the company’s Managing Director Rod McIllree. A major stumbling block until recently was the reluctance of Greenland and its mother country Denmark to even consider mining radioactive materials. Because the REEs are associated with uranium they could not be extracted under the former regulation, however in October last year Greenland’s parliament voted in favour of reversing that policy in the interest of establishing a viable minerals industry. The radical change not only made possible the further development of a mine and processing facilities at Kvanefjeld but sent a message to investors and the international minerals trade that GME had a future. The company had been discussing development scenarios with a number of global players over the past three years, explains McIllree, but no real progress could be made while the zero tolerance legislation was in force. One of the interested parties was China’s Non-Ferrous Metal Industry’s Foreign Engineering and Construction (NFC), which has an excellent track record in the engineering, construction and operation of mines and refineries. “Once the policy change was known they were prepared to step forward, and in April we signed a Memorandum of Understanding (MoU) with NFC with the aim working together to establish a Strategic Cooperation Agreement.” This was essentially a structure within which GME and NFC would formulate a full development scenario for a complete vertically integrated business.
“The Feasibility Study has optimised the project on what are known as the critical rare earths, dysprosium, neodymium, yttrium, terbium and europium”
58
[ Greenland ] BE Special Report
Greenland Minerals and Energy
Local Greenlandic workers
A mine, a concentrator and “The Feasibility Study has Did you know? an intermediate refinery would optimised the project on what are known as the critical rare be constructed in Greenland, earths, dysprosium, neodymium, and a dedicated separation 7,000 tons yttrium, terbium and europium” facility built in China. A jointly Target annual explains McIllree. “So we are owned marketing company production of tailoring the project to 7,000 will sell the minerals to their critical REs tons of critical REs per annum. end users. It is likely that GME That dovetails with the NFC will be a majority partner in the 956 separation facility, which is Greenland operations, a minority million tons designed to handle a similar partner in the separation (taking Total indicated quantity.” NFC is very keen to into account IP and technology and inferred get a long supply line of these – after all NFC subsidiary minerals at particular elements, he adds, Guangdong Zhujiang Rare Kvanefjeld and there are a lot of synergies Earths Company was the first with this arrangement. to achieve full separation of all Getting this agreement in place fifteen rare earth elements in was a big step forward, and demonstrates the China and is recognised globally as a leader willingness of Chinese companies like NFC to in rare earth separation technology). The move forward in a rapidly changing rare earth marketing company would be split evenly landscape. With a major overhaul of regulations between the JV partners. inside China, the top Chinese rare earth groups Though all the rare earths are present at are looking to align with high-quality offshore Kvanefjeld, not all are economically viable.
BE Special Report [ Greenland ]
59
“We now have enough money to fund the application and complete the bankable feasibility study and we expect to lodge the mining licence application early next year” projects and Kvanefjeld is a clear standout. It also demonstrated their confidence that obtaining the mining licence, or exploitation licence, is something of a formality, given the amount of work and political capital that has
60
[ Greenland ] BE Special Report
been put into the project thus far. “We now have enough money to fund the application and complete the bankable feasibility study and we expect to lodge the mining licence application early next year.” He adds that if
Greenland Minerals and Energy
Looking north up the Narsaq Valley
nothing untoward is identified it should take no more than a year to approve and grant the licence, opening the way for construction to start at the beginning of 2016. And problems are unlikely. The environmental and social impact assessments (EIA and SIA) are close to being finalised. The EIA report, compiled by Danish consultants Orbicon will cover the entire exploitation period from mine development prior to the mine start, going back to the 1970s, until closure of the mine and a subsequent monitoring period. Grontmij, also a Danish firm, has worked with GMEL on establishing
the baseline studies for the Kvanefjeld SIA since 2010. It has a deep understanding of social issues affecting Greenland and will look at the amount GEM has injected into the local economy through direct and indirect employment and procurement. The company has sponsored local sporting and community events, purchased computers for local schools and an internet cafĂŠ, and holds public information seminars to address any concerns and keep local people up to speed with its operations and plans. The mining licence is about more than this, though, and is complicated by the fact
BE Special Report [ Greenland ]
61
The first drill holes were set up in 2007
62
[ Greenland ] BE Special Report
Greenland Minerals and Energy
“I simply refuse to be the victimised people of climate change… we have the right now to our own underground” Aleqa Hammond
that though the country has given the green light to uranium production and export it does not yet have the regulatory framework in place to become a player in the global trade in radioactive materials and meet the demands of its international regulator the International Atomic Energy Agency (IAEA). As for uranium mining, processing and marketing, GME has recently appointed a respected uranium consultant James Eggins as its Manager of Uranium Marketing to take forward its increased focus on developing the uranium business strategy. Over the coming months one of the priorities will be to strike an agreement with a uranium end user, probably a nuclear energy utility in Europe or North America. The uranium can in any case only be exported to countries that need uranium to produce clean energy in their nuclear power plants, and only if those countries have signed the Nuclear Non-Proliferation Treaty controlled by the IAEA. Rod McIllree is hopeful that this framework approved by the Danish and Greenlandic governments before the end of the year. “Without the rules and regulations to facilitate a uranium-based application our own application clearly can’t be approved, but I think the situation is closer to resolution than most people realise – a lot of work has gone into it.” Greenland is joining a well
Exploration campsite
established uranium-producers club and can take the existing IAEA framework, to which countries like Namibia, Australia and neighbouring Canada already adhere. Apart from amendments to suit local conditions, it is largely a plug and play exercise. The government is 100 percent behind the change. As prime minister Aleqa Hammond, has said: “I simply refuse to be the victimised people of climate change … we have other options than just hunting. We have the right now to our own underground.”
Greenland Minerals and Energy
+299 66 14 94 gme@gme.gl @GreenlandMining www.gme.gl
BE Special Report [ Greenland ]
63
Tanb
ready t
The world needs rare earths in quantities and Greenland to trade in global markets while making use of its str words by
64
[ Greenland ] BE Special Report
Joh
breez
to roll
d needs inward investment, employment and the chance rategic position close to the transatlantic trade routes
hn Oâ&#x20AC;&#x2122;Hanlon BE Special Report [ Greenland ]
65
Diamond drilling rig
66
[ Greenland ] BE Special Report
Tanbreez
are earth elements (REEs) continue to be a hot topic. This group of 17 chemically similar elements crucial to the manufacture of many hi-tech products is causing international supply headaches. China currently produces about 90 percent of the world’s rare earths and produces more than 70 percent of the world’s rare earth magnets - neodymium in particular is used to make smaller, more efficient and more powerful magnets used in loudspeakers and computer hard drives. In order to curb environmental degradation and protect resources, China has set output ceilings, export quotas and stricter emissions standards as well as high resource taxes for some ores. By restricting exports and driving up prices China can effectively force companies to manufacture devices that need to incorporate rare earths in its own factories. However, the World Trade Organization ruled that China’s export duties, quotas, and administration of rare earths, tungsten and molybdenum products were inconsistent with WTO rules. A viable, reliable and politically neutral source of rare earths needs to come on stream soon, and the more accessible it is to global industrial markets the sooner will China’s stranglehold on these critical minerals be broken. They’ve recently discovered large deposits in Afghanistan, but who wants to start a mining operation there? Enter Greenland, where the largest REE deposit outside of China itself has been under development by the mining company Tanbreez, which under the leadership of the vastly experienced Australian geologist Greg Barnes has invested more than $40 million dollars in developing a world class deposit that will be a significant resource for many generations. The ‘ree’ in Tanbreez stands for the rare earths, while the rest of the name is made up from the chemical abbreviations for associated minerals tantalum, niobium and zirconium. All of these are sought after as new uses are found for them in, among other things, electronics,
R
BE Special Report [ Greenland ]
67
alloys, mobile devices, car exhausts and green power generation applications, however one feature of the Tanbreez deposit is the large proportion – 30 percent – of the more eagerly sought after heavy rare earths that it contains such as dysprosium, used in lasers and commercial lighting. Despite their name, many of the rare earth elements are quite plentiful around the world. However, the forms in which they occur in the earth’s crust are often not concentrated enough to be economically viable to recover. That is certainly not the
case at the Kringlerne deposit in southern Greenland which is probably the largest rare earth deposit in the world – certainly large enough to disrupt the market. The ore that is mined, called kakortokite, is easy to separate into three constituent concentrates; whitish feldspar, black arfvedsonite and red-coloured eudialyte; in a chemical-free magnetic process that will be carried out on site. There are many industrial uses for feldspar; eudialyte holds the REEs and will be shipped out for further processing; while arfvedsonite is attractive when polished and used by some
“The Danish Technological Institute has done some research into the use of arfvedsonite as a substitute for sand when making bricks and roof tiles”
Geology in process
68
[ Greenland ] BE Special Report
Tanbreez
Main ore body looking from west
as a mystical stone, it has no feldspar have been separated Did you know? bulk value, though that may out, there remains a black be about to change. residue called arfvedsonite, and The mining project will this would have to be contained $40 million consists of an open mine pit, in tailings dumps. However the Investment a processing plant, a port Danish Technological Institute amount in (including a helipad), a mine has done some research into developing a camp and internal connecting the use of arfvedsonite as a world class substitute for sand when making roads. A tailings deposit is deposit bricks and roof tiles.” part of the mine plan, and there is no doubt that this is an It makes a lighter and stronger 100 element that would need careful product, he says, with excellent Direct jobs for management and eventually load bearing qualities: if adopted local people remediation. Unless a better by the building trade it would at Tanbreez way can be found, that is. Hans mean that all of the material Kristian (Hank) Schønwandt is a taken from the pit could be consultant to Tanbreez: he used taken away and sold. That is a to lead the Bureau of Minerals and Petroleum fact that is very important to the Greenlandic (BMP, now MLSA), and understands better authorities, who are deeply concerned that the than most the balance between Greenland’s arrival of large scale mining could degrade the economic needs and its unique environment. unique landscape, pollute the waters around “Once the mineral-bearing eudialyte and the the coast, and leave undesirable residues.
BE Special Report [ Greenland ]
69
The only thing now holding up the construction of a working mine and processing plant is the granting of an exploitation licence. On 21 March 2012, Tanbreez submitted to BMP a draft application for an exploitation licence covering rare earth elements and feldspars. Since then the process has been delayed, as the Greenland government works through the process of formulating new legislation to cover mining activity. One problem with this, in the opinion of Hank Schønwandt, lies in the vey uniqueness of Greenland’s geology. Kakortokite is named after Qaqortoq, the nearest settlement to Tanbreez, precisely because it in a mineral not found anywhere else. The legislation, he thinks, should be framed to reflect the reality on the ground, rather than trying to make the deposit fit the legislation! Recent drilling at the site has shown that it contains at a deeper level other REE-bearing structures that may include different minerals, but each time a variation
Greg Barnes Chief Geologist More than 40 years in the mining industry including (but not limited to) gold, silver, rare earths, iron ore, coal, oil and gas, niobium, pot ash and platinum. This work has included head geologist duties in Australia, Asia, central and eastern Europe, Greenland and eastern Africa.
Tanbreez 400 metres high section of ore
“A hydro-electric line runs close to the ore body so we will be able to get all the power we need and there is no lack of water”
70
[ Greenland ] BE Special Report
Tanbreez
Qaqortoq port
is detected the situation changes. However it should be borne in mind that no part of the deposit contains significant uranium or thorium – a factor that delayed other projects in Greenland until it lifted its zero tolerance policy to radioactive materials less than a year ago. Thanks to the benign processing method and the fact that the deposit adjoins a natural harbour, which can take large ships all the year round, it will have very little impact on the physical environment, says Greg Barnes. “A hydro-electric line runs close to the ore body so we will be able to get all the power we need and there is no lack of water.” The impact on the local population will be considerable, but all positive. “All the labour we are likely to want is available locally. We aim to operate with a maximum
of local workforce in all job categories too.” With the exception of key managerial and professional positions, all positions will be offered to local workers, he promises. Around 30 to 40 workers will be needed once construction starts, rising to a maximum of 140 at peak times over the two years it will take to complete the work. Once operational the project will support almost 100 jobs, and in a country with only 60,000 inhabitants that is a real social contribution.
Tanbreez
+299 586641 info@tanbreez.com www.tanbreez.com
BE Special Report [ Greenland ]
71
Mining
www.bus-ex.com