LONDON MINING’s Isua iron ore project in Greenland. The company plans to build an airstrip, slurry pipeline and year-round deepwater port, shipping 15m tonnes of blast furnace grade pellet feed into China each year. Photograph: London Mining

LONDON MINING’s Isua iron ore project in Greenland. The company plans to build an airstrip, slurry pipeline and year-round deepwater port, shipping 15m tonnes of blast furnace grade pellet feed into China each year. Photograph: London Mining

Greenland Swings from Shrimp to Iron Ore

Issue 42, May 2013

London Mining looks set to get the green light from Greenland’s government for development of its Isua iron ore project on the edge of the Arctic Circle. Industry minister Jens-Erik Kirkegaard has told Global Mining Observer he is “optimistic” Isua will be built under his tenure.

Speculation has surrounded whether the country’s coalition government, elected in March, would grant licenses for Isua. London Mining’s chief executive Graeme Hossie met prime minister Aleqa Hammond in April, but told the Greenlandic press he could not predict whether construction would begin.

Speaking on Wednesday, Kirkegaard strongly endorsed the project. “Both sides of the table are very positive. The work is ongoing to make sure the company gets a license. Greenland needs revenue from its natural resources: it’s hard to maintain a traditional life in hunting and a welfare system where we have free schools and healthcare for everybody. We need to get an industry up and running.”

As a Danish colony, Greenland gets annual subsidies of $600m. The government is evaluating an unprecedented new tax code, binding companies to tax payment forecasts published in a project’s bankable feasibility study, putting a tax floor under new mines, with royalties capturing expansion. “We want to make sure Greenland gets a minimum of government take, but also maintain it as a mining friendly environment.”

The code may include rebates prior to a project’s payback, critical for Isua, which has upfront costs of $2.4bn due to a shortage of existing infrastructure. Nuuk, Greenland’s capital, has one set of traffic lights. London Mining has deferred construction of a port, airstrip and access roads, subject to government approval and financing. Refundable failing milestones, London-listed Anglo Pacific holds a 1% royalty over Isua.

Kirkegaard expects license requests from Australia-listed Ironbark Zinc and Greenland Minerals and Energy. He is committed to lifting a ban on uranium mining and views Greenland as a prime mining jurisdiction, with large deposits close to a deepwater coastline, negating railroads and barges.

“Some areas of the world have the risk of civil wars, riots, militia conflicts and stuff like that, but Greenland is very stable.” Nearly half the country’s export revenue comes from shrimp.

“We need to get an industry up and running.”
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