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The new gold rush in Greenland

How climate change may be a self-fulfilling prophecy

When one thinks of Greenland, what comes to mind? Cool glaciers, and large expanses of wooded forest, and perhaps confusion with Iceland. However, mining has long been important to Greenland, and the recent melting of polar ice caps has opened the market and prospectors are leering towards Greenland as a kind of new frontier for white gold. What does this mean for energy markets? How have things changed recently, and what are the implications for the future?

Gold Rush Greenland

In the past, the Arctic was largely considered off limits for mining work because the land was buried under hundreds of feet of snow and ice, and there was a complete lack of traditional infrastructure. Global warming, however, has greatly adjusted the situation. While the traditional ways of hunting and normal life in Greenland are on the verge of being completely removed due to the melting polar ice caps, mineral mining is a lot of the land masses remaining residents last hope for survival. Foreign countries like China and Russia are interested in exploiting the materials available there, including uranium used for nuclear enrichment. Other political blocs though, such as the EU, have encouraged the international community to take a more pragmatic approach, leading to substantive international debate.

In 2011 the Greenland government in Nuuk committed to the encouragement of new ventures when it repealed a law that prevented uranium mining. Now, laws have been amended to allow for exploration licenses for radioactive elements like uranium and thorium. This, however, on a purely case by case basis. Similar discussions have taken place regarding other countries too, like Canada, Russia itself and Finland. The land that has become exposed is rich with lead, iron ore, zinc, diamonds, gold, uranium and even oil, so executives and politicians alike are looking at Greenland like prospectors once looking to California as the new frontier for wealth.

Of course, there is some irony in the fact that Greenland is seeking to become a major producer of hydrocarbons, while simultaneously suffering from the very climate change that is causing its own glaciers to melt. The greedy appetite in the rest of the world for energy is forcing the country’s leadership to face extremely difficult decisions – save the wildlife and glaciers, or survive today? The public in Greenland is divided. While many fear what opening the markets will do to their traditional life, the native Inuit people who reside in Greenland are also curious about what increased wealth could do for their immediate comfort and wellbeing. According to an article in the Financial Times, investment in infrastructure is sorely needed across the entire land mass.

There has, of course, been a backlash addressing the trend to suck Greenland’s resources. Groups like Greenpeace and other environmental NGO’s are gathering information to fight back. They have jumped onto mining vessels to check for oil-spill plans, to avoid similar crises like that which happened in the Gulf of Mexico when the Deepwater Horizon ran into tough times and had no plan to handle the spill. Activists say that if the drilling and uranium mining is going to go forward, there must at least be safeguards in place to avoid similar disasters.