Minister of Industry and Mineral Resources
Jens-Erik Kirkegaard
The government of Greenland’s policy on mineral resources
The new government in Greenland
 As you no doubt have already heard, Greenland has a new,
broad governing coalition.
 It consists of three parties: Siumut, Atassut and Partii Inuit.
 And although each party has entered the new government
with its own party platform, they have a united approach when
comes to industrial policy.
 We want to continue with the positive industrial development
that Greenland has experienced for many decades now.
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The new government programme
 Government take on mining projects won’t increase – but the taxation model
has to be organised in a different manner.
 The zero-tolerance policy on uranium must be amended.
 The Large-Scale Project Act needs to be adapted – the Greenlandic trade
unions’ negotiating position has to be strengthened.
 Mining and large-scale projects have to help create growth and prosperity.
 The Government of Greenland will proceed cautiously with the allocation of
new license blocks, but wants to see exploration continue at the current level
 New oil licensing rounds are necessary to maintain the level of exploration
because other license blocks on the west coast will expire.
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The goal of our industrial policy
 It is the clear goal of the Government of Greenland to create the
most positive business environment possible, and this is an area that
we are striving to improve even further over the coming years.
 On this note, I feel that it is important to point out that we are open to
international commerce and foreign investment.
 We are staunch supporters of free and open trade, where all
businesses are subject to the same set of rules.
 Because equal conditions mean that as many businesses as
possible will take part in the competition to win a contract – for
everyone’s benefit, not least of all for consumers and society.
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Foreign investment
 Over the past few years, there has been a great deal of focus in the
foreign media on our mineral resources.
 This is an interest that we heartily welcome.
 This has already resulted in a great deal of interest among foreign oil
and mining companies that are seeking to acquire exploration
licenses for specific areas.
 This is true for both oil and minerals. A total of nearly 150 licenses
have been granted to a wide range of companies. This is nearly ten
times as much activity as we had just over 10 years ago, which is
something that we are very proud of.
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Other industries
 Fishing remains our main industry, and this is an area where we are
constantly striving to achieve increased growth.
 Tourism is another industry with big opportunities for growth.
 Greenland is a unique tourist destination because our attractions are
significantly different and more distinctive than what Western tourists can
experience in their home countries or local communities.
 This is an area that we intend to focus on. We view tourism as a major
growth market. One of the opportunities that I want to examine as a relatively
new minister in this sector is how we can attract tourists to our country who
mainly visit Iceland. Every year, Iceland is visited by over 500,000 tourists.
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Growth potential for the Greenlandic
economy
A recent analysis by the magazine Mandag Morgen concludes:
• “The resource crisis will accelerate until 2025, when there will be one
billion more people in the world and the global middle class will
broaden thanks to strong economic growth in China, India and other
developing countries."
• "The demography and historic boom in prosperity in the BRIC
countries will simultaneously trigger a huge increase in the demand
for energy, minerals and water, and there is no indication that oilproducing and mining companies can keep pace with this demand.
According to the International Energy Agency (IEA), energy
consumption alone will have increased by 35 percent by 2035. The
United States National Security Council estimates that energy
consumption may even rise by 50 percent by 2030."
• The analysts conclude that the mineral resources sector has the
potential to support future growth in Greenland.
The urgent need to turn around
Greenland’s economic development
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Growth in GDP
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Growth in GDP, real, %
 A net total of more than
7,000 people have
emigrated from Greenland
since 1993
3
2
1
0
-1
2008
2009
2010
2011
2012
2013
-2
-3
-4
Development of GDP
112
110
108
Index 2007=100
 Outlook for low growth –
after high growth in 2011
4
106
104
102
100
98
96
94
2007
2008
2009
2010
2011
2012
2013
Source: 2012 report of the Danish Economic Council
Income per inhabitant
500
450
400
350
DKK 1,000
300
250
200
150
100
50
-
With the annual block grant
+ EU transfers
What the new government
is concretely doing to turn
this trend around
We intend to decide on
applications for
exploitation licenses for
mining projects during
the course of 2013.
Lead and zinc (Citronen
Fjord)
Iron (Isukasia)
Rubies (Fiskenæsset)
REEs (Kuannersuit)
REEs (Killavaat Alannguat)
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New mining projects
Project
Investment
Workforce
London Mining - iron
Approx. 13 billion kr.
Construction: 3,000
Operation: 800
Tanbreez Greenland (REEs,
niobium, tantalum, zirconium)
Approx. 1 billion kr.
Construction: 40-140
Operation: 80-100
Greenland Minerals & Energy
(REEs, uranium
Approx. 2.5 billion kr.
Construction: 1,000
Operation: 380
Citronen Fjord (zinc and lead)
Approx. 3 billion kr.
Construction: 465
Operation: 300
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New mining permits
• All mining projects will have to be environmentally and socially
sustainable.
• Comprehensive hearings will have to be held.
• Both society and the companies will receive a fair share of the
profits.
• Impact and benefit agreements (IBA) will have to be made for all
mining projects to ensure:
• Maximum local employment
• Maximum involvement of Greenlandic companies
• Enhancement of skills and competencies among workforce,
etc.
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Taxation of mining projects
• Royalties will have to be paid on turnover – but at the same time we intend to
reduce the corporation tax for the relevant mining companies so there will be
no increase in the overall taxation of these projects.
• We have already engaged in a productive dialogue with a number of
companies on determining the overall taxation model – and will finalise this
model during the course of the summer.
• Greenland continues to be very competitive in this area:
100%
Til rettighedshaver efter
udbytteskat
90%
Udbytteskat
80%
70%
Told
60%
Omsætningsroyalty
50%
Arealskat
40%
Overskudafgift
30%
Mineskat
20%
Regional skat
10%
Selskabsskat
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0%
Australien Can. Nunavut
Can. NFL
Chile
Kina
Grønland
Sverige
Sydafrika
New policy on radioactive
minerals - 1
• The majority of the known deposits of rare earth elements (REEs)
in Greenland are associated with uranium and/or thorium.
• The exploitation of rare earths thus requires an amendment to the
current zero-tolerance policy on radioactive minerals.
• The Government of Greenland intends to put forward a proposal
on a decision-in-principle to amend the zero-tolerance policy
concerning uranium and other radioactive minerals at the
parliamentary session in the autumn of 2013.
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New policy on radioactive
minerals - 2
• The parliament has commissioned an independent report on the consequences
relating to a possible lifting or changing of the zero-tolerance policy on the
exploitation of uranium and other radioactive minerals.
• Likewise, a Greenlandic-Danish team of experts is compiling a report on the
regulatory aspects of a change in policy on radioactive minerals.
• These and other reports and studies will be incorporated into our ongoing work,
including:
• Drawing up a proposal for a decision-in-principle to amend the zero-tolerance
policy
• Compiling a possible follow-up set of rules and procedures for mining operations
involving radioactive minerals
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Oil licensing policy
Tirsdag 7. maj 13.30 – 14.10
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Status
The license blocks cover an area
of over 200,000 km2.
There are over 20 license blocks
with 14 companies involved.
The participating companies
include some of the world’s
largest independent oil
corporations.
A total of 14 wells have been
drilled in Greenlandic waters and
many more are expected during
the course of the next few years.
Exploration in Greenland is in its
infancy and many challenges lie
ahead.
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Drilling in 2010 and 2011
Exploratory drilling
2010
2011
3 drilled holes
5 drilled holes
The results of the drillings: confirmation
that there is oil/gas in the area, but not
yet in commercial quantities.
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Greenland Sea
2012/2013 bidding round
Bidding area
covers:
49,949 km2
And is divided
into:
19 blocks
Block sizes
range between:
1,752 km2
and
3,803 km2
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Greenland Sea
2012/2013 bidding round
 2012 bidding round reserved for members of the KANUMAS group
 Members of the KANUMAS group:







StatoilHydro
BP
ExxonMobil
Chevron Texaco
Shell
Japan Oil, Gas and Metals National Corporation
NUNAOIL
 Applications for licenses were submitted by 15 December 2012
 The Government of Greenland will decide on these applications during
the course of the summer.
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Greenland Sea
2012/2013 bidding round
 2013 bidding round is open to all interested
parties
 Applications for licenses must be submitted
by 15 October 2013.
 The bidding round will be conducted as
planned.
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Upcoming oil drilling
• Applications for permits
to conduct new
exploratory drilling for oil
are expected during the
course of 2013.
• No applications for 2013
have been received at
present.
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Thank you for your attention.
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