Questions & Answers on Kvanefjeld Project
This Q & A is a practical tool to help people find information about rare earth elements and
uranium in regards to the mining project on Kvanefjeld.
This Q & A is divided into the following 5 sections:
1) Facts on rare earth elements and uranium
2) Business case issues
3) Environmental issues
4) Social and economic issues
5) Uranium issues
1) Facts on rare earth elements and uranium
Q: What are Rare earth elements (REE)?
A: Rare Earths Elements (REEs) are a group of specialty metals with unique physical,
chemical and light-emitting properties. The group is considered to include the 15
lanthanide elements: lanthanum, cerium, praseodymium, promethium (does not occur
naturally), neodymium, samarium, europium, gadolinium, terbium, dysprosium, holmium,
erbium, thulium, ytterbium and lutetium. The elements yttrium and scandium are also
included as they have similar chemical properties, making 17 REEs in total.
REEs are typically described as being either “light” or “heavy”:

Light REE
Lanthanum through to samarium on the periodic table
(LREE)

Heavy REE
Europium through to lutetium on the periodic table
(HREE)
Q: What are REE used for?
A: Several high technology commodities depend on the unique properties of REE: wind
turbines, hybrid vehicles, rechargeable batteries, mobile (cell) phones, plasma and LCD
screens, laptop computers, disk drives and catalytic converters. Rare Earth Elements
make the world’s strongest permanent magnets, which are used in electric motors.
Q: Where do REEs come from?
China is responsible for nearly 95 per cent of the world’s production of rare earth metals.
China domestic demand is such that the majority of this is consumed within China and
only a relatively small proportion is available for export. Western World production is
forecast to increase with both Molycorp Inc. (USA) and Lynas Corp. (Australia) beginning
to ramp up their respective newly established operations, however these projects
predominantly produce only LREEs.
Q: What is uranium?
A: Uranium is a naturally occurring element that can be found in low levels within all rock,
soil, water and even animal and human tissue. Uranium is most widely known for its
radioactive properties and it is these radioactive properties that drive most of its
commercial use, particularly in nuclear power generation.
Q: Why is nuclear power important?
A: About 12 % of the world’s electricity comes from nuclear energy. The nuclear fuel cycle
produces virtually no emissions of greenhouse gases. This avoids the release of 2 billion
tonnes of CO2 each year into the atmosphere. Nuclear power plants generate about 30%
of the electricity produced in the EU. There are currently 132 nuclear reactors in operation
in 14 EU member countries. Each EU country can decide whether it wants to include
nuclear power in its energy mix. Countries like France, Slovakia, Belgium, and Sweden
rely heavily on nuclear power. Countries such as Great Britain, Canada and the United
states are considering expanding the nuclear energy capacity. Denmark currently receives
electricity from Sweden so it too benefits from nuclear energy.
2) Business case issues
Q: Why have Greenland Minerals & Energy chosen to explore and develop
Kvanefjeld?
A: The Kvanefjeld is one of the largest deposits of rare earth metals in the world. The ore
in Kvanefjeld comprises multiple elements with commercial value, namely REEs uranium
and zinc. By 2016 global consumption of REEs is forecast to increase to over 180,000 tpa,
up by 50% from current levels, driven by significant market growth for many applications
that rely on REEs.
Q: Is it possible to mine the rare earth minerals and leave the uranium behind?
A: No. It is a bit like fishing with a large net. Whilst you may be seeking one type of fish it
is inevitable that the net will contain many species, not necessarily all wanted. As the main
minerals at Kvanefjeld contain both rare earths and uranium it is not possible to selectively
mine and process the rare earths and keep the uranium separate. The only way to
separate the two products will be during the chemical processing of the mined ore.
Q: Does Greenland Minerals & Energy have enough professional experience to
perform the complex mining project?
A: Greenland Minerals & Energy is an Australian based mining company with extensive
experience in this field. The project team is made up of industry professionals from around
the world and is supported by internationally recognised expert consultants. The
development of the project will be managed in consultation with, and under the supervision
of, both Greenlandic and Danish authorities.
Q: Why do you say, uranium is only a ‘by-product’, when GME will earn lots from
uranium?
A: REEs are the primary products and the uranium, which is locked within the same
minerals, must be removed prior to producing a commercial REE product. The potential
annual production of REEs is more than 23,000 tonnes, being forty times more than the
production of the uranium oxide by-product, being up to 500 tonnes per annum. It is
important to remember that Kvanefjeld is a uranium deposit with a very low grade.
Greenland Minerals and Energy estimates to mine 0.04 percent uranium per tonne
compared to 1.3 percent REE per tonne.
Q: Who will be able to purchase uranium from Greenland Minerals & Energy?
A: The uranium can only be exported to countries that need uranium to produce clean
energy in their nuclear power plants, and only if those countries have signed the Nuclear
Non-Proliferation Treaty controlled by the International Atomic Energy Agency, a United
Nations organisation. It is anticipated that both the Greenlandic and Danish Government
will be actively involved with GME in the setting up of export controls for uranium
shipments.
3) Environmental impact issues
Q: How will you ensure that the Greenlandic environment will not be negatively
affected?
A: Before establishing the mine, Greenland Minerals & Energy will perform at least a 2
year-long, and in some cases longer, assessment of the environmental impact. Only after
demonstrating to the satisfaction of the Greenlandic and Danish authorities that the mining
activities could be performed in environmentally responsible way would the mine be
established. One should remember, that REE‘s are actually beneficial to our climate and
environment, since REE is used in green technologies that help preserve the global
climate over the longer term.
Q: How will you ensure that dust from the mine will not spread to the surrounding
areas?
A: When blasting and quarrying the ore dust can spread to the immediate surrounding
areas depending on the prevailing weather conditions. Greenland Minerals & Energy will
implement appropriate management plans and controls to minimise this spread of dust,
such as using appropriate mine design, rock blasting only when weather conditions are
suitable, and using state of the art dust suppression techniques etc. It is highly unlikely
that dust from the mining operation will impact upon the nearby town of Narsaq. Dust
monitoring stations have been established to determine current background levels and
these stations will continue to operate throughput the life of the mine to ensure residents of
Narsaq are not exposed to dust from the mining areas.
Q: What will happen to the processing plant residues?
A: Before a decision on the storage of residues can be made we require a number of
detailed studies. There are many factors to consider, for instance it is preferable that the
residues should be stored in an impervious area, capped by at least 30mm of water. The
water will not only eliminate any dust generated from the residues during periods of high
winds but also suppress any possible release of radon gas.
Earlier studies by the Danish Government considered Lake Taseq as a potential site. Lake
Taseq is located in a 3 km wide valley which is approximately 7 km northeast of the town
of Narsaq and approximately 3 km southeast of the proposed process plant site. The lake
level is 518 m above sea level, with a surface area of approximately 1.3 km2 and the water
volume is estimated to be 16.5 Mm3. The lake drains from the southwest into the Taseq
River, which flows into the Narsaq River and, hence, to the ocean approximately 6 km
distant. The water from Taseq cannot get into the local Narsaq drinking water supply.
There are a number of possible alternative locations and these will be considered, in
consultation, with the local community.
Q: With regards to the residue storage facilities, how will these be managed to avoid
dust, radon or leakage?
A: The concentrator residue storage facility will be constantly covered with water to stop
the emanation of radon, and at the completion of the mining project, the whole residue
facility will be covered by crushed rock to ensure encapsulation of its contents. The
residue facility at Taseq will be designed so as not to drain or leak, as the rock that
contains the lake is impermeable and any fractures in this rock will be small, and it will
quickly be filled by the initial crushed rock which is deposited into tailings at the start of the
mine, effectively blocking any of these cracks that may exist.
Q: What other hazards are there? What about the fluoride?
A: There are a number of hazards associated with a typical mining operation and the
Kvanefjeld Project will be no different in this respect. In this case we define a hazard as
“something causing unavoidable danger, peril, risk, or difficulty”. A mining company will
typically prepare a “Project Management Plan” (PMP) during the Assessment and
Approval phase of the project. The PMP forms the basis for the initial identification of
potential major risks associated with the proposed operations and is a starting point for
developing on-going strategies to manage those risks. Most hazards are identified and,
where possible, eliminated during the environmental, social and engineering design
studies, prior to construction and operation of the mine.
One potential pollutant of concern is fluoride, which comes from the dissolution of sodium
fluoride (NaF). The mineral form of NaF, villiamite, is moderately rare, and is generally
known from plutonic nepheline syenite rocks, such as those found at Kvanefjeld.
Since villiamite is highly water soluble it is generally absent from the upper layers of the
ore body. However, during the mining operation fresh surfaces will become exposed to
water and may percolate through cracks and fissures in the mountain. It is intended to
reclaim the process water during the operative phase and pass it through a treatment
plant, where the fluoride will be recovered as a saleable fluorspar product.
The Narsaq River currently has higher than normal fluoride levels, particularly during
periods of low water flow. Despite this there is a small population of Arctic Char living in the
river.
Q: How will you safeguard the environment once the mine operations are closed?
A: When a mine is closed it must be secured in a way such that the local environment is
left free from contamination. As a consequence, so-called tailing depots must be
established. These depots are set up as long term facilities and when properly established
it is well documented that they do not contribute to long term environmental damage. Mine
closure plans must be established and approved by the authorities prior to commencing
exploitation
4) Social and economic impact issues
Q: What social impact will the mine have on Narsaq and Greenland?
A: Greenland Minerals & Energy will need to invest around 5 billion Danish kroner over the
next four years to establish the mining operations. This investment includes amongst other
things, a new deep water harbour, various access roads, processing facilities, an
accommodation village and new power station. The mining operation will create hundreds
of jobs, and economically benefit the people of Narsaq and the rest of Greenland. This will
be particularly important in the case of Narsaq, where the community is challenged by high
unemployment rates and is experiencing a decline in population as young people leave
due to the lack of a viable future.
Q: Will Narsaq close down when the mine opens?
A: No, Narsaq will not close if the mine opens. Narsaq is key to the project at Kvanefjeld,
given it is access to local workforce and services. The location allows Greenland Minerals
and Energy to integrate the local population and workforce in a way that is not possible for
other mining projects. At the same time, Narsaq will benefit from the work and
infrastructure advantages that will help develop the area in a positive way.
Q: How much money will Greenland earn from the mine? Will all profit just ‘go
abroad’?
A: Prior to generating a net profit the mining operation must first meet all its obligations in
terms of corporate and employee taxes. As the mine should generate healthy profits and
will create many well paid jobs it is expected that the Greenlandic self-government will
benefit from the mine for many years to come. There is no doubt that mining will add
positively to financial growth and increased job opportunities in Greenland.
Following full plant ramp-up it is anticipated that a tax instalment in the order of US$55M
per annum will be payable to the Greenland Government based on sales income derived
from the base case of the Kvanefjeld Project. This excludes any tax derived from:

Payroll

Import duty

Royalties.
In addition to this, there will be significant tax revenues generated during the 2 year
construction phase.
For the expansion case, the notional tax instalment is expected to increase to US$120M
per annum.
Q: How many jobs do you expect to create?
A: Initial estimates for the project are that up to 383 personnel will be required for the
operating phase and approximately one third of these ideally would be recruited locally from
within the Kommune Kujalleq. The balance of the personnel required will most likely be employed
on a fly-in/fly-out basis, and will be accommodated in a new village. To help meet the local
employment target Greenland Minerals & Energy has started a training and development
program to provide assistance for those who may wish to participate in the future mining
operations.
Q: Where will the workers live?
A: Most of the fly in/fly out personnel required to staff the management, operations and
maintenance functions of the Kvanefjeld mine, plant and port facilities will be accommodated in a
custom built village, likely to be located somewhere in between the existing town of Narsaq and
the process plant.
Q: How will the mine impact on the unemployment rate?
A: As there is a large potential workforce in South Greenland due to the current high
unemployment rate (approximately 11%) it will have a positive impact. The types of job
opportunities available, and suitable for local workers, in a typical mining operation include among
others:
a) Unskilled job opportunities such as digger operators, truck drivers, drillers, plant operators etc.
b) Skilled job opportunities supervisors, administration staff, health and safety providers,
surveyors, engineers, geologists, etc.
Q: How will the mine affect the sheep farmer and the sheep meat?
A: Sheep have been farmed around the Narsaq Peninsula for many years. The meat is
regularly tested and locals can eat the sheep meat without any negative consequences.
The sheep farmers’ grazing areas will not be affected by the mining activities at Kvanefjeld.
Greenland Minerals and Energy has installed radiation monitoring in places around the
town of Narsaq and the farm in the Narsaq Valley, in order to collect background data as
part of the environmental studies. As part of the stakeholder engagement process
Greenland Minerals and Energy consult regularly with the local farming community and
their concerns about the possible impact of mining are being addressed as the studies
progress.
Q: How will you ensure that such a large project, which would attract an
international workforce, will not negatively affect the small Inuit community?
A: Before establishing the mine, Greenland Minerals & Energy will perform at least a 2
year-long, and in some cases longer, assessment of the potential social impact. This
involves consultation with the local communities and will help identify the issues and
concerns that may exist in relation to establishing a nearby mining facility. Concerns about
the impact of economic development on Inuit culture, way of life, and community will be
positively addressed so that the local Inuit population are able to take full advantage of the
economic opportunities if they so desire.
Q: Will the Kvanefjeld have any economic impact on Denmark?
A: Denmark will benefit from the development of the mining operation in a number of
ways. It is likely that the Greenland Government will receive significant taxation revenues
which may in turn reduce Greenland’s financial dependency on the Danish block grant to
Greenland. It is certainly likely that numerous Danish companies would have the
opportunity to supply goods and services during the development and operation of the
project.
Q: What kind of impact will the mine have on Greenland tourism?
A: The mining project is located within a popular tourism region in Greenland and many people fly
to Narsarsuaq from Denmark/Iceland to hike or sail, or to join one of the many cruise ships that
visit the area.
It is unlikely that the presence of the mining project itself will deter tourism, given the careful
design and landscaping planned for the mining project. In fact, the tourism industry could benefit
from the project due to the increase in commercial flights, better accommodation etc., as
presently the lack of such infrastructure creates a transport bottleneck within South Greenland.
5) Uranium issues
Q: What will the uranium be used for? Where does it go? Will it be used for
weapons?
A: Uranium’s primary commercial use is to provide fuel for nuclear reactors, which
generate electricity. Another beneficial application of uranium is medicines. Radiation in
medicine is used for diagnosis and therapy of various medical conditions, for instance
cancers. The uranium from the Kvanefjeld mine will not be used for weapons, this being an
essential component of any export licence negotiated between GME and the relevant
Government and International authorities.Through the Euratom Treaty, the EU can ensure the
safe and sustainable use of nuclear energy across Europe and help non-EU countries meet high
standards of safety, security and non-proliferation.
Q: Will uranium mining affect the Greenlandic environment?
A: There are no specific environmental issues related to uranium mining and
environmental controls are likely to be similar to other mining operations exploiting
different minerals, in similar regions.
Q: How is radiation exposure managed?
A: Whilst the level of uranium in the Kvanefjeld area is low, especially compared to those
operating in places like Canada, the security standards of the Kvanefjeld project are very
strict. A number of precautions are taken to protect the health of workers: Dust and radon
emissions are controlled, so as to minimize exposure through inhalation. Strict hygiene
standards are imposed on workers handling the drill cores, and respiratory protection is
required when dealing with dusty conditions.
Q: We have concerns about the levels of radiation. Is it dangerous?
A: Everybody around the world is exposed to a certain amount of radiation, regardless of
mining. Radiation exposure is already occurring in the area around the Narsaq Valley due
to natural erosion effects over the years. Radiation exposure on the Kvanefjeld itself is low
due to the low grades of uranium (well below international exposure guidelines). During
operations exposure to radiation will be controlled by minimizing handling time, maximizing
distance to radioactive materials, regular hand washing and wearing protective equipment
– including gloves, safety glasses and coveralls.
Monitoring of our workforce during the exploration phase has shown that our drill teams
have been exposed to radiation levels corresponding to around 1 mSv per year. In
comparison an average Dane receives approximately 3 mSv per year from naturally
occurring sources, especially radon.
The local population living in Narsaq should not receive any additional exposure to the
current background radiation as a result of the exploration and mining activities.
Q: Will I be exposed to radiation when transporting the uranium oxide?
A: Every day radioactive materials are transferred from one location to another, throughout
the world. The safety precautions adopted for transport of uranium oxide ensure that there
will be virtually no possibility for exposure to uranium oxide dust. During routine transport,
workers and the public can be exposed to very low levels of gamma, for instance truck
drivers are exposed to approximately 0.001 mSv per hour from the container of uranium
oxide. Compare this to the exposure from a typical x-ray (1.7 mSv) or a flight from Nuuk to
Copenhagen (.02 mSv).
Q: What about nuclear waste and the environment?
A: Nuclear Power has a low impact on the environment. Nuclear wastes consist of small
amounts of manageable materials that can be securely and safely stored in isolated
facilities and which lose their hazard with time.
In the European Union for instance, radioactive waste is not only produced in those states
that use nuclear for electricity generation, but also by many other applications, be it
radiotherapies or industrial tests. It’s safe management is therefore a challenge for all
Member States, irrespective of their stance on nuclear.
While low and medium level radioactive waste is increasingly being taken care of, there is
not yet a single final repository for high-level radioactive waste and spent fuel. It is likely
that the first repositories of this kind will be opened between 2020 and 2025 in several EU
Member States.
Q: What about the thorium? Why can’t that be used?
A: Today, uranium is the only fuel supplied for nuclear power reactors. However, thorium
can also be utilized as a fuel for CANDU reactors or in a reactor specially designed for this
purpose. The use of thorium-based fuel cycles has been studied for about 40 years, but on
a much smaller scale than uranium or uranium/plutonium cycles. Much development work
is still required before the thorium fuel cycle can be commercialised. Up to recently only
India has actively pursued a reactor designed for thorium. Recent international moves to
bring India into the ambit of international trade might result in the country ceasing to persist
with the thorium cycle, as it now has ready access to traded uranium and conventional
reactor designs.