COPENHAGEN (AP) — Greenland’s underground wealth is at the forefront of the Arctic island’s parliamentary election on Tuesday amid worries over a potential influx of Chinese labor and the environmental consequences of mining.

Once an isolated outpost of human civilization, ice-capped Greenland has grabbed global attention recently for being at the front line of climate change. Scientists are studying the melting of its massive ice sheet, which covers 80 percent of the island, and its impact on raising global sea levels — one of the great unknowns of the climate puzzle.

Meanwhile, miners prepare to dig for iron, rare earths and other metals as warming temperatures make them more accessible.

All major parties in the 31-seat Parliament favor exploiting some of the untapped natural resources as a way to reduce Greenland’s dependence on former colonial master Denmark and pave the way toward full independence.

But at what cost to the pristine environment and the traditional Inuit way of life?

The opposition Siumut party has accused Premier Kuupik Kleist of moving too fast, saying he rushed through a law in December to allow large mining projects to import labor from abroad, including China.

While a majority of Greenland’s 57,000 residents are concentrated in a few small cities on the west coast, others live in remote coastal settlements where life revolves around fishing and hunting of seals and whales. Few have the skills required to work in the mining industry.

“People must be allowed to ask questions: What could the creation of a mine and the arrival of some 3,000 Chinese workers mean to me as an inhabitant of a hamlet? What will it mean to me and my hunting grounds?” Siumut leader Aleqa Hammond told The Associated Press.

Britain-based London Mining is seeking Chinese investments — which would likely also mean Chinese workers — for an iron mine 100 miles (160 kilometers) northeast of Nuuk, the capital. The company expects to extract 15 million tons of iron ore annually for at least 15 years.

Outsiders, including the European Union, are concerned that China is eyeing investments in Greenland as a way to gain a toehold in the resource-rich Arctic region.

Kleist, 54, said earlier this year that Greenland, which isn’t an EU member, is “open for investments from the whole world,” as long as investors follow local laws and regulations. Greenland officials traveled to both China and South Korea last year and Kleist also met with South Korea’s president in Greenland.

Australian mining company Greenland Minerals and Energy Ltd. says it’s in talks with potential investors from South Korea and elsewhere to develop a rare earths mine near Narsaq, on Greenland’s southern tip. Rare earth elements are key ingredients in smartphones, weapons systems and other modern technologies.

The company says it’s the biggest rare-earths deposit outside China, which accounts for more than 90 percent of global production, but the deposit can’t be exploited unless Greenland lifts its ban on mining for radioactive elements, because the ore also contains uranium.

While other parties are ready to drop the ban, Kleist’s governing Inuit Ataqatigiit party, or IA, wants to keep it — at least until the environmental consequences of uranium mining have been thoroughly assessed.

“No matter how ‘well behaved’ a mining company is, it cannot take away the fact that the tailings from radioactive materials linger in nature for hundreds of thousands of years and the problem with the leftover materials from the usage of uranium has not been solved,” IA lawmaker Naaja Nathanielsen said in an email.

A decision on whether to lift the ban, which would also require a vote in Denmark’s Parliament, is expected this year or next.

A poll commissioned by the Sermitsiaq newspaper last week showed the election is too close to call. The poll of 800 people by HS Analyse found Kleist’s left-leaning IA remained Greenland’s largest party with more than 40 percent support. But its two coalition allies had lost backing, leaving it unclear whether the three parties together can retain a majority in Parliament.

Greenland’s autonomy was expanded four years ago, giving the local government control over the island’s natural resources. As part of that deal, Denmark will gradually reduce its 3.3 billion kroner ($576 million) annual subsidy once Greenland starts making profits from resource extraction. Right now the subsidy accounts for about two-thirds of Greenland’s economy.

Offshore drilling in Greenlandic waters has so far not revealed any commercial quantities of oil and gas, so the self-rule government has placed its hopes on mining in the short term.

John Mair, executive director of Greenland Minerals and Energy, said political support for the company’s rare earths plans is growing, but added that “clarity on regulation” is needed to go forward in Greenland. “Otherwise the investment tends to move to jurisdictions where there is a clearer path.”

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In vote, resource-rich Greenland debates new global role

Alistair Scrutton – http://www.reuters.com/article/2013/03/10/us-greenland-election-idUSBRE9...

11 March13

GREENLAND – Kuupik Kleist’s earliest memories are hunting whales with hand-thrown harpoons. Now, as Greenland’s prime minister, he is feted by Chinese and European leaders as he opens up its untapped mineral resources.

A verdict on this country’s transformation comes on Tuesday, when this island – a quarter the size of the United States and with only 57,000 mostly Inuit inhabitants – holds a general election.

There is only one polling station in the capital Nuuk, which has just two traffic lights and where hunting is still the most popular pastime. But the vote may pack a global punch.

After four years of Kleist – a quiet-spoken musician known as Greenland’s Leonard Cohen for his gravelly voice – the vote is effectively a referendum on how far it embraces international mining companies, energy giants, and foreign workers.

At stake may be Greenland’s growing geopolitical role as global warming and the thawing of sea ice open up new sea lanes, minerals and oil fields – drawing the interest of world powers from China to the United States.

“There is a growing nationalist backlash. It’s not a nice thing to see,” Kleist said, sitting in his ninth floor office overlooking the snow-capped hills surrounding Nuuk Bay.

“The fear of being overrun by foreigners is exaggerated,” the 54-year-old said. “We are becoming a global player. We need to avoid ethnicity, nationalistic feelings.”

With Greenland having self-rule from Denmark aside from defense and security, the vote has seen a split between Kleist and an opposition linked to traditional Greenlanders like fishermen and hunters who feel he has gone too far in welcoming foreign companies.

There are calls for more taxes on foreign firms, growing suspicions about Chinese mining investments, demands for more environmental safeguards and even anti-colonial rhetoric to limit the use the Danish language being spoken.

“The main issue is that people feel that they are not part of the decision-making process of big scale projects and mining,” opposition leader Aleqa Hammond said at her small campaign offices in Nuuk. “Where is the voice of the people?”

Hammond also grew up in a remote village. Her father died when she was young after he fell through ice while hunting. She says her family tried to make her marry a hunter. She refused. Instead, she has a good chance of being next prime minister.

Since Greenland won self-government in 2009, most politicians have aimed for growing autonomy and eventual independence. The more revenues from mining or oil, the more Greenland weans itself of Denmark’s annual grant that accounts for more than half the island’s budget.

In Kleist’s gleaming new offices in Nuuk, many Danish civil servants sip cappuccinos, huddle over computer screens and plot policies from finance to mining regulations. Greenlanders mention the symbolism of an executive and its staff whose offices sit over Nuuk’s one shopping mall.

The civil servants stand out in Nuuk, where sushi bars and cozy, heated cafes with sofas and internet contrast with barren, concrete housing estates of fishing industry workers.

HOPE OR HYPE?

Not one mining or oil project has got off the ground yet.

But more than 100 exploration licenses have been awarded. There are large deposits of rare earths, used in products from wind turbines to hybrid-powered cars. China accounts for the majority of world supply. There are hopes for gold and zinc.

Government officials says reserves may be equivalent to as much half of the entire North Sea.

Central to the debate in Greenland is a $2.3 billion project for an iron ore mine by the British-based London Mining Plc near a fiord in Nuuk. It may involve diesel power plants, a road and port and would supply China with iron to fuel its economy.

Some 2,000 Chinese workers – the equivalent of around four percent of Greenland’s population – could fly in for its construction, touching nerves where unemployment is rising.

“People feel that I am unemployed but the Chinese are coming in by mass,” said Hammond.

SEAL HUNTING

At Nuuk’s windswept port, fishermen drag in fish and seals from a catch. The floor on a small warehouse is awash with blood. There is a gagging stench of dead flesh.

Johannes Heilmann, 64, grew up hunting for whales. He still fishes with a 19-feet long boat encrusted in ice in the harbor, shooting occasional seal with a rifle to sell for meat in Nuuk.

Fishing accounts for 90 percent of Greenland’s exports.

Heilmann is the Greenlander that is suspicious of mining. He campaigns against Kleist. He complains about fishing quotas, and how cheaper foreign produce is pushing out local food.

“No matter how much mining comes here, fisheries will be our main industry,” Heilmann said. “Politicians should pay more attention to us.”

Heilmann worries about London Mining. He fears any spill from the iron ore ships could destroy fishing.

“I don’t mind if Chinese come here,” he said. “But if there is an accident?”

Others are more nationalistic. One new party, Partii Inuit, has caused controversy by calling for more prominence for Greenlandic language over Danish, still widely used here.

Four hours north of Nuuk by boat lies Maniitsoq, one of many villages dotted on the western coast, relying on state subsidies for heating and communications. Unemployment is high.

U.S. giant Alcoa Inc has considered building an aluminium smelter there, strategically sited between European and North American markets. It could entail the import of thousands of workers, possibly from China.

Many here are desperate for Alcoa after much of fisheries has vanished. The town is huddled on an outcrop of windswept rocks with rusty housing blocks.

“The younger people, they all want Alcoa,” said Jens Moller, head of a community training project in Maniitsoq, told Reuters by phone. “The older generation want better fishing. They are the ones likely to vote for the opposition.”

In Nuuk, Karsten Peter Jensen is a 27-year-old post graduate student. He enjoys hunting in fiords for grouse or reindeer. But he also enjoys sushi bars and chic shops.

“The last four years have been very positive, we have looked to the outside world,” Jensen said. “But for other people, they think change has come too fast. There is a perception Greenlanders have been put aside a bit.”

CHINESE GHOST?

Worries that China wants an Arctic foothold have risen in a territory that for years was a Cold War ally of the West.

It was little surprise when President Hu Jintao, China’s outgoing leader, paid a three-day visit last year to Denmark, home to just six million people. Many assumed Greenland’s riches were on his mind despite official denials.

Hammond says she would introduce royalties for mining companies and revise a law passed last year that effectively allowed big mining companies to employ thousands of foreign workers for construction of projects.

“For the greedy ones that want 100 percent of everything, Greenland is not for them,” Hammond said.

That has some investors worried. Several mining executives, who asked to remain anonymous as they did not want to talk about politics, said investment decisions were on hold.

Few believe Greenland would turn against mining. The concern is more that politicians could hurt a fragile and emerging industry through demanding too many royalties and taxes.

“We are a small country that is in competition with the rest of the world,” said Maliina Abelsen, finance minister. “When you build up expectations, you get people saying that we have so much in the ground, so we are fine.”

“But we cannot eat that for breakfast. It is still in the ground.”

An annual grant from Denmark has been effectively frozen at around 3.5 billion Danish crowns (about $610 million) and will shrink in real value over time.

Kleist pointed to his view over Nuuk. Icebergs floated by. He worried that if he lost power he would lose the view.

“There’s always been a tendency to isolate Greenland from the rest of the world,” Kleist said. “It’s been my personal ambition to open us up. There is no alternative.”

(Additional reporting by Katja Vahl; Editing by Angus MacSwan)