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Large Scale Projects in the Arctic: Socio-Economic Impacts of Mining in Greenland

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Large Scale Projects in the Arctic: Socio-Economic Impacts of Mining in Greenland University of Akureyri School of Humanities and Social Science, Faculty of Law Master‟s Program in Polar Law Large Scale Projects in the Arctic: Socio-economic impacts of mining in Greenland Monika Margrét Stefánsdóttir June 2014 University of Akureyri School of Humanities and Social Science, Faculty of Law Master‟s Program in Polar Law Large Scale Projects in the Arctic: Socio-economic impacts of mining in Greenland Monika Margrét Stefánsdóttir Master thesis submitted as part of studies for the M.A. – Degree in Polar Law. Akureyri June 2014 Master Thesis Monika Margrét Stefánsdóttir Ha070314 Large Scale Projects in the Arctic: Socio-economic impacts of mining in Greenland Joan Nymand Larsen: is hereby approved as part of studies towards the M.A. degree in Polar Law Studies Akureyri in June 2014 Master Degree Examination Committee Members _______________________________________ Joan Nymand Larsen _______________________________________ Hjalti Jóhannesson iii Abstract Changes in the Arctic environment in the last decades are highly relevant to understanding changes in the socio-economic development in the Arctic. The main focus of this thesis will be on those changes, with a certain concentration on the changes in relation to Greenland. The thesis starts out by providing an overview of the physical and historical background of Greenland, followed by an overview of the economy of Greenland and a discussion of the obstacles for economic development. With Self-Government, Greenland is looking for new sources of income. The importance of the mineral sector has grown as it begins to show its potential as this new source. Case studies of four different mines, in three different countries, along with large scale projects in four different countries will be analysed and compared. Two of the mines are in Greenland, the Maarmorilik mine (closed operation in 1990) and the ISUA Iron Ore mine (that has not started operating yet). The other two mines are the Mir mine in Russia (closed operation in 2001) and the Red Dog mine in Alaska, which is still operating. The other case studies are the Eastern Siberia-Pacific Ocean Pipeline in Russia, The Snøhvit (Snow white) gas field in Norway, Kárahnjúkar hydro power and Alcoa Fjarðarál in Iceland and the Ekati diamond mine in Canada. These case studies will be analysed and discussed to gain a better understanding of the impacts that large scale resource exploitation have on their environment and the surrounding society, with the goal to gain knowledge about best practices. iv Gratitude My gratitude goes to my supervisor Joan Nymand Larsen, which gave me the best advice and mentoring possible for this thesis. I especially want to thank her for the patience and her countless values, and for making me believe in myself during this process. Special thanks go to the institutes and companies that contributed and made my fieldwork trip to Nuuk in September 2013 possible. Without them the project would not have had the same value and would have been different in so many ways. My gratitude goes to Arngrímur Jóhannsson at the Polar Law Institute, Níels Einarsson at the Stefansson Arctic Institute, Óskar Óskarsson at Gúmmívinnslan, Akureyri and Flugfélag Íslands. Finally I want to thank my family, for all their support in various ways during the period of this writing. Last but not least, my gratitude goes to my husband and my children, Gunni, Malena, Jana, Stefán and Hjördís, thank you all, I would never have been able to do this like I did without you all. v Table of Contents List of Figures ........................................................................................................................................... 4 Introduction ............................................................................................................................................. 5 1. Methodology and research questions ........................................................................................... 10 1.1. Fieldwork ............................................................................................................................... 11 2. Greenland’s background ............................................................................................................... 15 3. Greenland – history of economic development ............................................................................ 18 3.1. Colonial Rule .......................................................................................................................... 19 3.1.1. G-50 Policy ..................................................................................................................... 20 3.1.2. G-60 Policy ..................................................................................................................... 22 3.2. Home Rule ............................................................................................................................. 25 3.3. Self-Government ................................................................................................................... 28 3.4. Home Rule vs. Self-Government ........................................................................................... 37 3.5. Summary................................................................................................................................ 39 4. Economic Development in Greenland ........................................................................................... 41 4.1. The Greenland Economy – The mixed economy ................................................................... 42 4.2. The Formal Economy ............................................................................................................. 44 4.2.1. Fisheries ......................................................................................................................... 45 4.2.2. Minerals ......................................................................................................................... 50 4.2.3. Tourism .......................................................................................................................... 54 4.3. The Informal Economy .......................................................................................................... 56 4.4. Summary................................................................................................................................ 58 5. Theoretical Background to the Study ............................................................................................ 60 5.1. Primary-Export-led growth theory ........................................................................................ 60 5.2. Greenland´s Export Sector .................................................................................................... 64 5.3. Summary................................................................................................................................ 66 6. Legal Frameworks for megaprojects in Greenland ....................................................................... 67 6.1. History of legal frameworks for megaprojects in Greenland ................................................ 67 6.2. Legal framework for minerals today ..................................................................................... 70 6.3. Summary................................................................................................................................ 74 7. Case studies of four different mines in three Arctic countries ..................................................... 77 7.1. Greenlandic Mining ............................................................................................................... 77 7.1.1. History of the Black Angel Mine .................................................................................... 78 7.1.2. Environmental monitoring and pollution at Black Angel .............................................. 80 7.1.3. Black Angel today .......................................................................................................... 81 7.1.4. Lessons to be learned from Black Angel Mine .............................................................. 82 7.1.5. Summary ........................................................................................................................ 83 7.2. History of the ISUA Iron Ore mine ......................................................................................... 84 7.2.1. Summary of the project description.............................................................................. 85 7.2.2. Education for local people ............................................................................................. 86 7.2.3. Social Impact Assessment ............................................................................................. 87 7.2.4. Environmental Impact Assessment ............................................................................... 89 7.2.5. Summary ........................................................................................................................ 91 7.3. Alaska mining......................................................................................................................... 92 7.3.1. NANA foundation .......................................................................................................... 92 7.3.2. History of the Red Dog Mine ........................................................................................
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