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Greenland rare earth minerals developer holds out faint hopes after election

12 April 2021 Keiron Greenhalgh

The developer of a rare earth minerals project in Greenland is continuing to hold out faint hopes for what would be one of the three largest mines of its kind after a general election last week in which the most successful party vowed to block the mine.

Greenfield Minerals said 9 April it looks forward to working with the government, once the new coalition is formed, on moving forward with the Kvanefjeld project, which includes reserves of rare earth minerals neodymium and praseodymium. The rare earth minerals are essential for the permanent magnets used by electric vehicles as well as rechargeable batteries.

But those hopes are decreasing with each passing day after the leader of Inuit Ataqatigiit (IA) Party, which took 12 of the 31 mandates in the national parliament, the Inatsisartut, said the project was canceled. "The people have spoken," IA's Mute Egede also told Danish broadcaster DK when asked about Kvanefjeld.

Kvanefjeld's reserves of rare earth minerals are accompanied in the deposit by uranium. Now in talks with other parties to form a coalition government, IA's opposition to any radioactive waste the mine might produce was central to the party's election campaign. IA says it is not against mining, just radioactive mine tailings, especially in a region of Greenland where agriculture plays a prominent role.

Part of the attraction of Kvanefjeld was Greenland Minerals' promise of $235 million for the country's budget.

Approval of rare earth or other mining projects would enable a diversification away from fishing and decrease reliance on an annual Danish subsidy of around €526 million ($626.5 million), representing a third of Greenland's national budget. Greenland is a semi-autonomous region of Denmark.

Kringlerne

But Kvanefjeld is not the only rare earth minerals option for Greenland. In February, Tanbreez Greenland won an exploitation license for its Kringlerne project some 8 km south of the Kvanefjeld site.

Tanbreez Founder and Chief Geologist Greg Barnes used to hold the rights to develop Kvanefjeld before selling them and putting his energies into Kringlerne.

The problems Greenland Minerals ran into won't be a problem for Tanbreez because the Kringlerne deposit does not include uranium, Barnes told IHS Markit 9 April.

Tanbreez has good relationships with both sides of the political divide, he said, adding that he doesn't believe the change in government or the makeup of the coalition will affect Kringlerne going forward. "I can see absolutely no difference in the way the government is going to see us," he said.

Tanbreez has an exploitation license granted, but Greenland Minerals won't get one, said Barnes.

The Kringlerne deposit is heavily weighted toward cerium, lanthanum, yttrium, and neodymium, according to Tanbreez. Cerium is used in catalysts, lanthanum can be used in EV batteries and hydrogen storage fuel cell materials, while yttrium is often used for tablets and computer monitors.

The Kvanefjeld deposit has light rare earth minerals such as neodymium and praseodymium and heavy rare earths such as terbium and dysprosium as well as uranium and zinc, according to a December presentation by the company. On its website, the company also says the site includes access to the lithium used for batteries.

Permanent magnets are used by electric and hybrid automobiles as well as wind turbines and involve the use of neodymium, praseodymium, terbium and dysprosium. Rechargeable batteries used by hybrid vehicles, electronic devices and tools use neodymium and praseodymium.

World leaders and industry have worries about their supply chains of key minerals as the electrification boom gathers pace, particularly in power generation and transportation.

President Joe Biden's administration on 24 February said it will review key US supplies, including rare earths, to ensure other countries cannot weaponize them against the US. "This is about making sure the United States can meet every challenge we face in this new era — pandemics, but also in defense, cybersecurity, climate change, and so much more," Biden said when announcing the executive order.

The Greenland projects are part of an EU initiative, the European Raw Materials Alliance, to boost Europe's output of critical minerals and cut dependence on China for rare earth metals.

The alliance is coordinating investment and providing seed money for European mines, processing plants, and industries such as magnets. The raw materials alliance declined to comment 12 April on the Greenland election.

Alternatives

Very few mines have been set up over the past decade, however, both because of the cost and dependence for processing on China.

One exception is Lynas Rare Earths' Mt Weld mine in western Australia, which has 5% to 10% of rare earth minerals globally, according to IHS Markit Director Minerals Research and Analysis Samantha Wietlisbach. Lynas has a deal in place with the US government to build a separation facility too. It previously set up a separation plant in Kuantan, Malaysia. The plant can produce as much as 22,000 mt/year.

Tanbreez is hoping to join Lynas as a producer. But what Tanbreez needs now is an end to the COVID-19 pandemic and money, Barnes told IHS Markit.

The company has spent A$50 million ($38.12 million) so far on Kringlerne, it says, and the mine would cost about $500 million to develop.

Barnes said he is fielding multiple offers each day from potential financial partners, with the results of the election bringing all sorts of interested parties out into the open. It hasn't just been funding offers though, the company has had offers from China, the US, India, and the UK for its projected output from Greenland, he said.

The next steps for Tanbreez also depend on the COVID-19 pandemic's impact decreasing, said Barnes, noting that the company's employees were currently spread out across the globe. "It's harder to get out of Australia than North Korea at the moment," he said, speaking to IHS Markit from his home in Australia.

The coming year will involve getting all the company's plans lined up, preliminary work carried out, and then Tanbreez will "hopefully" get up and running in 2022, said Barnes.

The company has also a decision to make on where to locate its processing operations, with a US site most likely, he said, while declining to go into further detail.

Chinese dominance

In contrast, Greenland Minerals' largest shareholder at roughly 10% is Shenghe Resources, a Chinese rare earths giant that owns a similar stake in what was the dominant global rare earth minerals source for many a decade -- MP Materials' Mountain Pass operation in California.

The output of Mountain Pass, in which Shenghe bought a stake in 2017, is sent to China. A similar route for the output of Kvanefjeld was expected because most rare earth processing -- separation and smelting -- takes place in China.

China has a stranglehold on smelting and separation, controlling 88% of the market, Wietlisbach said. China's other monopoly is in knowledge and the ability to convert the minerals to usable product, she added.

Some 34% of the demand for rare earth minerals goes toward permanent magnets, while 17% is used for emissions control catalysts and fluid cracking catalysts at refineries for making gasoline and diesel. Over 90% of the rare earth minerals used for permanent magnets are neodymium and praseodymium, according to Wietlisbach.

China's share of global rare earth mineral reserves stood at 37% at the end of 2018, according to IHS Markit data.

The annual demand for rare earth elements is currently about 200,000 mt/year and can be supplied by a handful of large mines, according to Per Kalvig, chief adviser, Geological Survey of Denmark and Greenland.

That said, the supply of minerals used for permanent magnets could be tight in two to three years' time as demand increases, but that might also not be the case as China may just increase production, according to Wietlisbach. However, the question then is whether China will sell its magnet rare earth minerals to other countries and magnets to other companies and countries, she added.

Posted 12 April 2021 by Keiron Greenhalgh, Editor, Energy and Natural Resources Group, IHS Markit

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