Report to Inatsisartut on mineral resource activities, spring 2011
In pursuance of section 4 of ”Inatsisartut act no. 7 of 7 December 2009 on mineral resources and relating activities (Mineral Resources Act)” we hereby present a report to Inatsisartut on granted licences, applications for licences and conducted and planned application rounds.2010 was a historical year for Greenland due to the first offshore exploration drillings for ten years and the resumption of oil exploration in the Baffin Bay.
In recent years Greenland has seen an unprecedented international interest in both mineral, oil and gas potentials in the Greenlandic underground. The increased interest shown by the mineral resource industry has been driven by intensive marketing of the Greenlandic mineral resource potential and also by favourable price developments for oil and minerals.
We now see considerable oil exploration activity in our waters. On 2 December 2010 we signed seven new licences for exploration in the Baffin Bay, thus bringing the total number of licences up to 20. The next area up for tender in 2012 is located in the Greenland Sea off North East Greenland.
In 2010 Cairn Energy carried out three exploration drillings in the sea off West Greenland, and it was confirmed that there is a potential for oil and gas deposits in this region.
The exploration drillings in the summer of 2010 demonstrated that we have an organisational emergency plan fully in line with that of other countries. We have requirements that are in many fields more severe than international standards and we request that the latest and best available technology is used at any time.
Cairn Energy is planning to conduct up to four oil exploration drillings offshore Greenland during 2011 on the condition that Naalakkersuisut approves the plans of the company.
If is turns out that there is a commercially exploitable oil potential in the territorial waters of Greenland this many be a large step for Greenland on our way to a self-sustaining economy. However, in Naalakkersuisut we pay much attention to the interests of the environment, safety and health and to the involvement and information of the public at any time. Furthermore, it is a Naalakkersuisut objective that mineral resource activities take place in an environmentally and socially sustainable manner and in view of increased employment, business involvement and earnings.
Also in the field of hard minerals 2010 was in many ways a record-breaking year with vivid interest in exploration in Greenland. The projects regarding iron, zinc and eudialyte at Isua, Citronen Fjord and Kringlerne have now entered a crucial phase and profitability studies are expected to be finalised by the end of 2011. It is thus possible that more mining projects will see the light of day in the coming months.
If we are to achieve our objective of turning mineral exploitation into a significant and long-term business area it is important that many exploration projects are ongoing at any time. Partly since mineral projects have a very long development horizon and partly since only few exploration projects actually become operating mines.
In this connection it is important to remember that in 2008 we saw an international finance crisis which has still a strong impact on our economy. The mineral resource business must develop in a way taking into consideration that economic fluctuations will always occur.
It is positive that during 2010 we granted 40 new mineral licences, thus bring the total number of mineral licences up to near 120.
It is my hope that during the next five to ten years we have more than five active mines and more than one thousand residents employed in this industry. However, it takes hard work, patience and not least resistance to the temptation of seeking short-term restraints of the framework conditions before developments have really gained momentum.
I wish you pleasant reading.
Yours faithfully
Ove Karl Berthelsen
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