Greenland seeks to attract exploration

Faced with the recent closure of its only remaining metal mines, and a slump in both its fishing and oil sectors, Danish government authorities are attempting to increase exploration activity in Greenland. By proposing substantial changes to the Greenland Mineral Resources Act, the authorities are hoping that international mining firms will take a new look at a land mass that is regarded as something of a mecca by academic geologists.

The proposals, set to go before a joint committee of Danish and Greenland resource authorities in March, include adjustments to Greenland tax legislation.

Pending approval, the proposed changes could also lead to the establishment of a mineral resources office in Nuuk, Greenland’s capital city, according to Hans Schonwandt, head of the mineral resources department of the Geological Survey of Greenland. Schonwandt spent four days in Toronto recently explaining the proposals to mining executives and geologists.

There are currently five Canadian companies involved directly or indirectly in exploration in Greenland. But the country needs more, said Schonwandt while speaking to a geological discussion group at the Toronto office of the Prospectors and Developers Association of Canada.

Due to the closure of the Maarmorilik lead-zinc and Ivittuut cryolite mines, Greenland is without a producing mine for the first time this century. But this situation may only be temporary.

As it contains the world’s largest exposed boundary of continental and oceanic crust, Greenland is currently “knee deep” in academic geologists, says Robert Gannicott, president of Toronto-based Platinova Resources (TSE). In a joint venture with Teck (TSE), Platinova is exploring for gold in the Skaergaard area of eastern Greenland.

“It is a pleasure to work in a country where exploration is so strongly encouraged,” said Gannicott. “All of the technical data are in English and the operating environment is easy,” he said.

Highwood Resources (TSE), Falconbridge Ltd. and Corona (TSE), through its interest in Platinova, are among other Canadian mining firms that are either exploring or planning to conduct exploration in Greenland.

According to Schonwandt, mineral resources in Greenland are currently administered jointly by Greenland Home Rule authorities and the Danish government. Public revenues derived from mining activity are shared equally by the two bodies.

Schonwandt said he believes that 80 million tons of nickel ore are waiting to be found on the island and that conditions are favorable for the discovery of gold, niobium and other base metals.

Some of the proposed changes are as follows: A new concession system that includes fixed exploitation terms, and gives exploration companies the right to obtain exploitation concession on newly discovered mineral deposits. Transfer rights ensuring that companies wishing to transfer interests in a particular concession to another company will no longer have to receive permission from government authorities. A procedure for granting exploration concessions (and for determining their contents) that is based on fixed work obligations expressed in monetary amounts per square kilometre which will be graduated during the term of the concession. More simplified mineral resource regulations regarding environmental safety and other issues. The establishment of a data bank at the Danish Ministry of Energy in Copenhagen. A clear definition of the role of Nunaoil A/S, a mineral resource company owned jointly by the Greenland Home Rule government and the State of Denmark. Changes are also planned for oil and gas exploration and development. For example, areas on Greenland’s western continental shelf may be available for leasing by 1993.