WIREDGOV

To improve access of EU industry to raw materials at an affordable price, the European Commission wishes to intensify cooperation with Greenland benefitting both sides, such as joint infrastructures and investments or capacity building in exploration and exploitation of raw materials. A letter of intent on co-operation in this area was signed yesterday in Nuuk (Greenland) by Vice President Antonio Tajani and Commissioner for Development Co-operation Andris Piebalgs on behalf of the European Commission, and Prime Minister Kuupik Kleist on behalf of Greenland. Currently ca. 58 % of exploration companies operating in Greenland are Canadian or Australian companies. The share of EU companies operating in Greenland is only 15% (Denmark, Germany, Czech Republic and United Kingdom). Although of the four exploitation licences three are European, the European companies have a low involvement in on-going exploration activities and own only a few exploration licences (with most licences owned by UK, Germany and Denmark).

European Commission Vice President Antonio Tajani, Commissioner for Industry and Entrepreneurship, said: "Our close political relations have made it possible to bring our co-operation on raw materials to the next level. We now should be able to move quickly ahead to ensure better access to minerals for EU industry with the signing of further agreements on concrete projects. This co-operation offers a win-win solution for both parties. For Europe this means, that we can make sure that Europe’s industry will be able to continue to play a leading role in new technologies and innovation.''

Commissioner Andris Piebalgs added: "Today, the EU confirms its commitment to support Greenland's efforts to explore the full potential of a sector which may become an important lever in the diversification of the Greenlandic economy. This mutual understanding is a testimony to the maturity of our dialogue under the EU-Greenland Partnership. We want to support Greenland's sustainable development. I'll pay a visit to the Greenland in September to discuss our cooperation".

International aspects of EU Raw Materials Strategy

The Development and Cooperation website on EU relations with Greenland

The Bureau of Minerals and Petroleum of Greenland

Background

The Government of Greenland presented a new mineral strategy in 2009 with focus on new areas and themes establishing Greenland as an attractive exploration area. The Letter of intent establishes to explore ways to reinforce the dialogue on mineral resources, within the framework of the EU-Greenland partnership of 17 July 2006 on relations between the EU on the one hand, and Greenland and the Kingdom of Denmark on the other.

EU's industry is strongly dependent on imported raw materials. They are essential inputs for production of many consumer goods such as electronics, but also vital for high-tech applications especially in green energy production. Vast supply sources are available in Greenland – which enjoys a special relationship with the EU through its Overseas Countries and Territories status. Greenland's geostrategic position in the Arctic and its economic potential in hydrocarbon (oil) and mineral extraction and processing sectors (iron, zinc, niobium, tantalum, rare earth elements, rubies and molybdenum) make Greenland a strategic partner in the long term.

Greenland has an especially strong potential in six of the fourteen critical raw materials identified by the European Commission as part of its Raw Materials Strategy (niobium, platinum group metals, rare earths and tantalum) and moderate for further three elements. The 2010 EU list of critical raw materials identified the 14 elements based on several risk factors: if a material displays a high importance to the economic value chain and a high vulnerability to possible supply constraints it can be considered as critical (if e.g. it is produced in only a few countries in the world which are not always marked by great political and economic stability, it is difficult to substitute or it has a low recycling rate).

Greenland is known for geological settings carrying a high potential for hosting Rare Earth Elements-deposits (REE), and a number of large deposits are being explored in an advanced stage. It is considered likely, that Greenland has the ability to become a mid-size supplier in a REE market dominated by larger players. Greenlandic share of the overall REE resources amounts to 3.44 % (ca. 4.89 million tonnes) but it is estimated to triple in the next few years if one includes the latest project figures from 5 mineral projects (9.16 % of the global REE resources).

Several projects are already in their exploitation phase:

• gold and silver mine in Nalunaq (the only currently producing mine),

• lead/zinc mine in Maarmorilik (production to start in 2012),

• molybdenum mine in Malmbjerg and

• olivine mine in Fiskefjord.

International interest in Greenland has strongly increased recently as shown by the exponentially growing number of exploration licenses granted by the Government of Greenland. Of the projects in their exploration phase (74 licences), several are in an advanced phase with the possibility to turn into exploitation projects in the next one to five years. Three applications for exploitation are expected already in 2012.

See also MEMO/12/428

Contacts :

Carlo Corazza (+32 2 295 17 52)

Catherine Ray (+32 296 99 21)

Sara Tironi (+32 2 299 04 03)

Wojtek Talko (+32 297 85 51)