Greenland in financial black by 2015, expert predicts
Within five years, income from oil and minerals could surpass the 3 billion kroner handout from Copenhagen Greenland lives off.
By redaktionen 11-01 - 06:58 National financial independence from Copenhagen could be just five years away, according to predictions from the head of Greenlands Raw Materials Directorate. Greenland currently receives a 3 billion kroner annual block grant from the Danish state, but Jrn Skov Nielsen said that with oil companies planning as many as four test drills this summer, oil could begin flowing by 2015. It has yet to be proven that Greenland has oil reserves, or that it is cost effective to extract them, but Nielsens Raw Materials Directorate has calculated that should just one drill strike oil it would be worth 10 billion kroner annually based on the current price of oil. As part of its recent transition to Self-Rule, Nuuk struck deal with Copenhagen that sees the two splitting all profits from natural resources after the first 75 million kroner, which stay in Greenland. If annual profits ever surpass 7 billion kroner, the block grant will be eliminated entirely. If we start earning a lot of money on minerals, well need to save a lot of it in order to ensure that we can use them once the block grant disappears. Nielsen said. He added that the country was also counting on income from minerals to replace block grant. In the next seven years, Nielsen expects as many as six new mines to open. Mining is not seen as generating as much income as oil, but it would create jobs. Right now, there are 90 people working with mining in Greenland, Nielsen said. Within seven years there were will be 1,500 new tax paying positions. In expectation of the rush of mining activity, a school for training miners has been established in Greenland.
Spotting diamonds from the sky
Initital searches confirm that there are diamonds in the area aound Nuuk.
11-01 - 08:32 Diamond prospectors from Nunaminerals may soon be taking to the air around Nuuk after the early results of a new method of searching for the gemstones using helicopters showed positive results. The nationally owned Nunaminerals holds two licenses for diamond exploration in southern Greenland. Studies of the area indicate both hold diamond deposits, and the company says it may continue to search with magnetic measurements using helicopters. In 2010, Nunaminerals expects to follow up in these promising results. The company said in a statement. The first measurements confirm that both areas are potential sources of cost-effective diamond deposits. Nunaminerals is currently in the search for an investor in its diamond exploration programme.
GGG Price at posting:
80.5¢ Sentiment: Hold Disclosure: Held
