Business Opportunities in Greenland Project Overview 2016 / 2017 2 Business Opportunities in Greenland – Project Overview 2016 / 2017
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BUSINESS OPPORTUNITIES IN GREENLAND PROJECT OVERVIEW 2016 / 2017 2 BUSINESS OPPORTUNITIES IN GREENLAND – PROJECT OVERVIEW 2016 / 2017 GREENLAND BUSINESS AND DEVELOPMENT PROJECT OVERVIEW 2016 Published by the Arctic Cluster of Raw Materials (ACRM) in collaboration with the Confederation of Danish Industry (DI), November 2016 di.dk/english acrm.dk Prepared by Up Front Communication ApS, Managing Director Hans Bak UP Front COMMUNICATION APS Up-North ApS, Managing Director Martin Schjøtz-Christensen Edited by Niels Tanderup Kristensen Foto: Hans Bak, Ivar Silis, Royal Arctic m.fl. Print: Kailow Graphic A/S ISBN 978-87-7144-099-7 200.11.2016 BUSINESS OPPORTUNITIES IN GREENLAND – PROJECT OVERVIEW 2016 / 2017 3 FOREWORD Today, the Arctic region is experiencing an unprecedented level of interdependence with a number of growing interrelated challenges to the local, regional and global order. At the local level the lives of ingenious people, who have inhabited the Arctic of thousands of years are experiencing increasing opportunities for unlocking the vast economic po- tential through natural resources, shipping and tourism but at the same time face major challenges to their traditional livelihoods and cultures. At the regional level, the Arctic states and other international actors are increasingly engaging in the region making it both a venue for cooperation and competition over economic and security interests. The dynamics at both of these levels are unfolding at the backdrop of major global devel- opments, where climate change is having a particularly strong impact on the vulnerable region. While the global temperature increase is allowing the Arctic new economic op- portunities through new Sea ways, tourism and access to resources, climate changes are both impacting the melting of permafrost and ice caps as well as being increased through feedback loops in the Arctic. This report takes its departure in the arctic mineral extraction industry and highlights the current prospects and developments in one arctic state: Greenland. It showcases some key facts about Greenland’s administration and legislation as well as operational insights. But most importantly, it gives you an extract of the main investment opportuni- ties in 2016/2017 that are found in Greenland’s mineral-rich underground. The report is developed by the Arctic Cluster of Raw Materials (ACRM). ACRM is an EU accredited cluster of excellence comprising of Danish and Greenlandic enterprises. ACRM provides company profiles and industry information on Greenland in all phases of the mining life cycle. To learn more about ACRM, please check our webpage at www.acrm.dk We hope you will enjoy the report. Niels Tanderup Kristensen Director, ACRM 4 BUSINESS OPPORTUNITIES IN GREENLAND – PROJECT OVERVIEW 2016 / 2017 BUSINESS OPPORTUNITIES IN GREENLAND – PROJECT OVERVIEW 2016 / 2017 5 CONTENTS 6 A Nationless area in the Arctic 9 New Arctic shipping routes 10 The Arctic Circle and Greenland 13 OPERATING IN GREENLAND 15 Greenland at a glance 16 MINERALS (AND HYDROCARBONS) 17 The public administration 20 Mining projects 20 Existing and potential mining projects in Greenland 22 ¶ LNS / LNS Greenland A/S and LNS Greenland Gems A/S 24 ¶ Hudson Resources Inc. 26 ¶ Ironbark Zinc Ltd. 28 ¶ Rimbal Pty Ltd. / TANBREEZ Mining Greenland A/S 30 ¶ Greenland Minerals and Energy Ltd. / Greenland Minerals and Energy A/S 32 ¶ General Nice Development Ltd. 34 ¶ North American Nickel 35 ¶ ARC (Arctic Resources) 37 INFRASTRUCTURAL DEVELOPMENT PROJECTS 38 Collaboration and investments 39 Selected infrastructure projects in key figures 39 Mining projects 39 Existing and potential mining projects in Greenland 40 ¶ Sikuki – Nuuk Harbour 41 ¶ Nuuk Airport (Kalaallit Airports A/S) 42 ¶ Ilulissat Airport (Kalaallit Airports A/S) 43 ¶ Qaqortoq Airport (Kalaallit Airports A/S) 44 ¶ Tasiilaq Airport 45 ¶ Ittoqqortoormiit Airport 46 ¶ Kangerlussuaq – runway upkeep, new port and road to Sisimiut 47 ¶ Development strategy for Nuuk – Arctic Capital 49 HYDROPOWER AND CLEAN ENERGY 50 Hydro plants in Greenland 51 KEY ORGANISATIONS 53 OUTLOOK 54 SOURCES 55 ACRM MEMBER COMPANIES 6 BUSINESS OPPORTUNITIES IN GREENLAND – PROJECT OVERVIEW 2016 / 2017 A NATIONLESS AREA IN THE ARCTIC The Arctic covers an area of about 14.5 million km2 of The 1982 United Nations Convention on the Law of which some parts are currently outside existing terri- the Sea (UNCLOS), however, entitles states to extend torial boundaries. The Arctic states (Canada, Russia, their territorial demands if they can prove that their Norway, the United States and the Danish Realm) continental shelf reaches beyond 200 nautical miles. are all working to extend their territorial rights in the This will grant them an exclusive right to exploit North. natural resources on and below the seabed. Exclusive fishing rights are not part of UNCLOS. The efforts are rooted in a wish to establish rules for shipping in the area and to benefit from the raw ma- Danish submissions to UNCLOS terial deposits that may be found there. The latter is, The Kingdom of Denmark has submitted three par- however, currently of less significance, partly because tial submissions relating to Greenland to the Com- the raw materials located outside current territorial mission in 2012, 2013 and 2014. On 15 December, boundaries are difficult to access, and partly because 2014, the third partial submission – regarding the it is assessed that 80 per cent of the Arctic raw ma- area north of Greenland – was submitted cover- terial deposits are found within boundaries that have ing an area of 895,541 km2. The two previous par- already been established. tial submissions for Greenland concerned the area (about 114,929 km2) south of Greenland from June Exclusive economic zone 2012 and the area (about 61,913 km2) north-east of All states are currently allowed to establish an exclu- Greenland from November 2013. sive economic zone 200 nautical miles off their coast- line. Within this zone, they have the exclusive right to explore and exploit the natural resources in the sea, on the seabed and subsoil, and to any economic opportunities that may arise. The states are also per- mitted to enforce environmental jurisdiction in their zone. BUSINESS OPPORTUNITIES IN GREENLAND – PROJECT OVERVIEW 2016 / 2017 7 Existing boundaries Nationless area Lomonosov Ridge Source Nordregio Alaska U.S. Russia Canada North Pole Greenland Norway Iceland Finland Sweden Faroe Islands Nationless area in the Arctic 8 BUSINESS OPPORTUNITIES IN GREENLAND – PROJECT OVERVIEW 2016 / 2017 North West Passage North East Passage Central Arctic shipping route North Pole New Arctic shipping routes BUSINESS OPPORTUNITIES IN GREENLAND – PROJECT OVERVIEW 2016 / 2017 9 NEW ARCTIC SHIPPING ROUTES New shipping routes are gradually opening up as the The North East Passage is particularly interesting sea ice in the Arctic region retreats. This will signify- from a European perspective. A trip from Rotterdam cantly reduce sailing times between Asia and Europe/ to Yokohama north of Russia is only at 8,500 km, America. Since 90 per cent of international trade is or 12,000 km shorter than through the Suez Canal. shipped by sea, new and shorter shipping routes will The trip from Rotterdam to Vancouver north of Rus- have an enormous impact on global trade. With the sia is 12,500 km, or 3,500 km shorter than through Arctic shipping routes, the shipping industry will be the Panama Canal. The North West Passage is open able to reduce its exposure to many of the challeng- for shipping roughly every seven summers, but is ex- es it is faced with today. These include bottlenecks pected to be navigable every second summer from in congested waters around the Suez Canal, the Pan- 2050. The route across the Arctic Ocean is not yet ama Canal and the Strait of Malacca, and the safety open for shipping, but navigability is expected to in- problems related to piracy. On the other hand, new crease gradually so that by 2050 the area will be open challenges appear in relation to crews and equipment during four months of the summer. This could poten- that must be able to deal with harsh weather condi- tially make Iceland a hub for transport between West tions and drifting icebergs – even in the summer. America/Asia and Europe/East America. Three shipping routes Extreme conditions The Arctic region basically offers three shipping Shipping in the northern regions, however, is not routes: without challenges, particularly in relation to unpre- dictable weather conditions. Storms, icebergs and ° The North East Passage north of Russia between extreme temperatures are just some of the circum- Europe and Asia/West America stances that both equipment and crews must be able ° The North West Passage north of Canada to handle. This means that shipping in the area is between East America and Asia/West America highly demanding in terms of safety. One considera- ° The Central Arctic shipping route across the tion is the vulnerable Arctic environment and another North Pole that gives access to Europe and East is the fact that an accident in Arctic regions may have America from Asia/West America. fatal consequences for the crew since it may take sev- eral days for help to reach the position. 10 BUSINESS OPPORTUNITIES IN GREENLAND – PROJECT OVERVIEW 2016 / 2017 THE ARCTIC CIRCLE AND GREENLAND The Arctic is currently going through major changes Infrastructure and is increasingly attracting international attention. Greenland is an example of a frontier Arctic region Climate changes combined with technological pro- with limited mining infrastructure and challenging gress present new challenges and opportunities for physical circumstances, yet it has a quite well devel- the Arctic and its population. The recent ten year pe- oped infrastructure compared to many other Arctic riod has been the warmest ever recorded in the Arc- states and regions and is experiencing a significant tic, and the region is expected to have ice-free sum- increase in mining activity. mers within the next 30-40 years.