Greenland Minerals and Energy

The explorer preparing to develop one of the world's largest uranium and rare earth deposits

About This Project

Greenland has always had the potential to become a significant minerals producer, but has not always had the intent. Fortunately for the mining industry that has changed in recent years as the country’s government opened up its borders for business. Greenland Minerals and Energy Ltd (ASX: GGG; ‘GMEL’) is an exploration company at the forefront of the country’s emerging minerals industry, with a rare earths resource base thought to be one of the world’s largest.


GMEL arrived in Greenland in 2007, when the minerals industry was buoyant and the underexplored country was beginning to promote itself as a mining destination. Although it was mostly a ‘frontier jurisdiction’ for mining it had the significant advantage of an existing comprehensive geological survey done by Danish researchers in the past. This was enough to whet the appetite of GMEL, as Managing Director Dr. John Mair explains.


“It was clear to us that Greenland presented a very compelling case for minerals exploration,” he says. “It’s a politically stable democracy with some very interesting geology and, in some cases, globally unique geological entities that have huge known resources and the potential to underpin globally significant mining projects. All these factors provided us the impetus to go and have a very good look, and when we did there was one area that really stood out: the Ilimaussaq complex in South Greenland.”


Data from Danish research agencies showed that the Kvanefjeld area of the Ilimaussaq complex hosted uranium resources, with potential for economic concentrations of other metals. However, as the Danish Government stopped pursuing nuclear power in the early 1980s and put a 25-year moratorium on uranium mining in Greenland, this potential had never been fully investigated. When GMEL acquired the Kvanefjeld project it immediately undertook a drill campaign that confirmed the polymetallic nature of the resources, and the huge upside. Several drill programs later, Kvanefjeld stands as the worlds’ largest undeveloped resource of rare earth metals and uranium.


Developing Kvanefjeld


The Northern Ilimaussaq Complex project area has a total resource inventory of 1.01 billion tonnes, containing 593 million pounds of uranium, 11.3 million tonnes of rare earth oxides and 2.42 million tonnes of zinc. The Kvanefjeld deposit alone has a global resource of 673 million tonnes at 248 ppm, 1.1% rare earth oxides and 0.23% zinc. Of this, 143 million tonnes in the Measured category are high-grade and located near-surface, which GMEL anticipates will enable low mining costs. Located on Greenland’s southern tip, the project has the additional benefits of a mild climate, good accessibility and close proximity to infrastructure including an international airport.


The Pre-Feasibility Study for the project was completed in March 2012 and GMEL has been working through a Definitive Feasibility Study (DFS) ever since. It is now almost complete.


“Throughout the last 12 months we’ve been finalising the DFS and putting together the final impact assessments, which form the basis for clearing Greenland’s rules and regulations,” says John. “We expect to finish the DFS in the first quarter of this year and the impact assessments should be finalised early in the third quarter. It will then be ready for permitting by the Greenland Government, which we expect will be completed in 2016. All that considered, we would like to see the construction phase commence as early in 2017 as possible.”


With Kvanefjeld being such a large and significant project, he adds, GMEL took care in picking highly qualified contractors with specialised expertise. The project’s resource inventory, for example, was prepared by SRK Consulting with whom GMEL has a long-enduring collaborative relationship. Australian-based 4DG have provided key geotechnical input. “To do all our engineering design we picked Tetra Tech, because they have a lot of expertise in cold-climate engineering,” John explains. In other aspects relating to infrastructure and logistics GMEL worked with Danish companies including the Ramboll Group, Per Aarsleff and Blue Water Shipping to benefit from their knowledge of the Danish systems operating in Greenland. “It’s been really important for us to identify the right groups for a project like this, and it’s paid off in giving us great contributors with whom we enjoy fantastic relationships,” John remarks.


Bright prospects


As GMEL finishes its DFS it will also be carrying out test work at Kvanefjeld to help it plan for the project’s future operation. The company plans to run a pilot plant operation of the beneficiation circuit in April, followed by one of the refinery circuit in August. These tests, being conducted through the EU-backed EURARE programme, will help move the project towards bankability. Pilot plant operations of the flotation circuit and continuous operations of the refinery circuit have taken place already.


In addition to this work, GMEL will continue to progress its relationship with NFC: a Chinese EPC firm whose rare earth division pioneered rare earths separation technology, and remain a world leader in this area. GMEL aims to integrate its critical rare earth stream with NFC’s large-scale processing facility in China and to ultimately create the world’s largest and most cost-competitive critical rare earth supply chain. “We’ve had a strong working relationship with NFC for 12 months now and the group has been a contributor to the feasibility study,” John remarks. “It’s a top-tier international organisation that will help put our project on the map.”


The outlook is similarly rosy for the markets that GMEL is preparing to enter. Both uranium and rare earths are entering “strengthening periods,” says John, having suffered several difficult years where nuclear power fell out of favour. “Prospects for uranium are much better now: China has a big reactor programme underway, Japan is beginning to restart reactors and other countries, including the UK, are showing renewed interest in nuclear power as a viable cleaner alternative to coal,” he explains.


“We’re starting to see uranium spot prices moving back up towards the $40 mark and I think there’s reason to believe that this trend will continue. There’s potential for the price to increase quickly within the next couple of years and that should give us the best opportunity to secure the right development partners and raise project finance on the best possible terms.”


He adds that the consolidation of China’s rare earth miners, along with growing demand, has helped push up prices for these metals, raising investor confidence in a way that bodes well for GMEL. “We’ve had to work through a difficult couple of years in terms of market sentiment, but we’ve made a lot of progress during that period and are now well positioned to advance one of the world’s best projects of this kind.”


A statement for Greenland


John and his team believe that the Kvanefjeld project will be good for not only GMEL, but also the country as a whole. “With Kvanefjeld being such a high-profile project, our bringing it into production will be a huge statement for Greenland,” he remarks. “It has genuine potential to help Greenland become a dominant player in the speciality metal market and I think that’s really exciting.”


He adds that the project will be a major stimulus for Greenland’s economy, pointing to its large resource inventory, long projected mine life and the opportunities it will create for local people.


“This is a mining operation that could run for decades and there are so many multiplier effects that come with a project like this, particularly for local businesses positioned to support the operation,” says John. “Whoever you are and whatever way you look at it, this is an exciting project.”


Greenland Minerals and Energy




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