Parliament narrowly agrees to lift ban on extraction of uranium

For the past 25 years Greenland has had a 'zero tolerance' policy in relation to the extraction of uranium, due to concerns over the consequences for that part of the population residing in close proximity to the areas where uranium may be extracted, as well as concerns for the vulnerable environment around the Arctic zone.

Furthermore, the extraction of uranium is still controversial in the kingdom of Denmark as a whole (ie, Denmark, Greenland and the Faroe Islands), due to the fact that the production of nuclear power is prohibited in Denmark.

However, on October 24 2013 the Greenlandic Parliament voted in favour of lifting the ban on the extraction of uranium.

Introduction

For the past 25 years Greenland has had a 'zero tolerance' policy in relation to the extraction of uranium, due to concerns over the consequences for that part of the population residing in close proximity to the areas where uranium may be extracted, as well as concerns for the vulnerable environment around the Arctic zone.

Furthermore, the extraction of uranium is still controversial in the kingdom of Denmark as a whole (ie, Denmark, Greenland and the Faroe Islands), due to the fact that the production of nuclear power is prohibited in Denmark.

However, on October 24 2013 the Greenlandic Parliament voted in favour of lifting the ban on the extraction of uranium, albeit by the narrowest possible majority (15 to 14 votes).

Ban on uranium extraction

At many mines, the extraction of rare earth metals is impossible without extracting uranium as well, due to the fact that the rare earth metals are often interlaced with uranium. Therefore, lifting the ban on the extraction of uranium is a prerequisite for developing the mining industry in Greenland and for completing, for example, the Kvanefjeld project in the southern part of Greenland (among the largest mining projects in the country).

In addition to rare earth metals, Kvanefjeld contains approximately 575 million pounds of uranium, making it the world's fifth-largest uranium reserve and providing a breeding ground for the commercial exploitation of uranium.

One reason for the fierce debate generated by the zero tolerance policy is that rare earth metals are crucial components in the production of a large variety of electronic equipment (eg, smartphones, flat screens) and wind turbines.

At present, China is close to having a complete monopoly on rare earth metals. However, by lifting the ban on the extraction of uranium — and thereby making the extraction of rare earth metals possible — Greenland could globally obtain a dominant position with regard to rare earth metals.

Another reason for the fierce debate is that not all deposits of rare earth metals contain uranium. In such circumstances, rare earth metals can be extracted without the concurrent extraction of uranium.

For instance, Kringlerne is likely the biggest natural deposit of rare earth metals in the world, estimated to contain more than 4 billion tons of ore, and this area contains no uranium. It is located in the southern part of Greenland, close to the townships of Narsaq and Qagortoq.

Political process

The government of Greenland obtained an expert report on the consequences of lifting the ban, dealing with legal, economic and environmental concerns. The report concluded that it is possible for Greenland to lift the ban without intervention from Denmark.

The reasoning is that Greenland does not need to request permission for the exploitation of uranium from the Danish authorities, provided that the purpose of such exploitation is peaceful — it was argued that this does not affect foreign and security policy matters.

Since the Mineral Resource Act entered into force in 2009, Greenland has been regulating the field of mineral resources independently of Denmark. Therefore, the report claims, lifting the ban is exclusively a Greenlandic affair.

However, if Greenland is to export uranium, an effective supervising authority must be established, as well as a system to regulate the safety of the extraction and export of uranium.

Voting controversy

The government of Greenland conducted the first reading of the bill on October 10 2013 (after it had been postponed for two days due to political disputes). On October 24 2013 Parliament voted on whether to lift the ban.

The controversy about the ban was clearly reflected in the final result: 15 votes in favour of lifting the ban and 14 against (ie, the narrowest possible majority). The vote triggered tempestuous debates throughout, causing one party to resign from the government.

Economic impact

The above-mentioned expert report also deals with the economic consequences of lifting the ban and allowing the export of uranium. The report concludes that there are many uncertainties with regard to the export of uranium, due to the fact that the uranium market has been volatile in recent years. It is therefore difficult to predict how much Greenland will gain by allowing the export of uranium.

However, by considering a 30-year mining period in its calculations, the report concludes that Greenland can most likely expect a substantial income if the ban is lifted and the Kvanefjeld project can proceed.

The report also concludes that the extraction of uranium in Kvanefjeld is not that profitable without also extracting rare earth metals.

While the export of uranium is estimated to reach a turnover of $4.5 billion, it is assumed that rare earths will attain a turnover of $33 billion. The overall assessment of the Kvanefjeld project is estimated to render a profit of $17.655 billion.

However, if the Greenlandic government does decide to mine and export uranium and other radioactive minerals, this must be done in full compliance with international rules and controls applicable in the field, including rules from the International Atomic Energy Agency.

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