JØRGEN SCHULTZ-NIELSEN
Tuesday, 05 December 2023 - 07:46
A new bill, which will, among other things, expand access to commercial mineral activity without a permit, receives harsh words on the road in several consultation responses to the Ministry of Mineral Resources.
Nuna Advokaterwarns against a "great degree of regulatory complexity, uncertainty and lack of clarity about the framework conditions in the mineral sector" and continues:
- Which in itself could be devastating for the development of the entire raw materials industry due to the following failed investments and lack of funding.It will affect jobs and development in the mining industry as well as the ancillary industry of local Greenlandic companies, says Nuna Advokaterne's consultation response, which is one out of 25.
Extended access
In the mineral bill, extended access will be given to locals to extract minerals for commercial purposes without a permit in areas for which a mineral exploration permit has already been granted.
- It is in itself harmful for a right holder of a mineral exploration permit that a formal intervention in the exclusive right takes place, point out Peter Schriver and Helen Kibsgaard from the law firm.
The director of the Bank of Greenland,Martin Kviesgaard, mentions the same conditions and describes the problem as follows:
- Likewise, it seems unfortunate that the bill may have the consequence that, in an area covered by an exploration permit, local actors are given the opportunity to exploit minerals where the same local actors have NOT previously had any interest in to collect minerals.It also seems patently wrong that a company that has an exploration license to search for diamonds, for example, is not allowed to use the license, while everyone else is allowed to enter the exploration area and extract diamond material.
Is it expropriation?
Martin Kviesgaard points out that it must be important to clarify "whether there may be expropriation in the case of existing exploration permits".
The bank believes that the proposal appears "hasty and unbalanced and potentially harmful to the possibility of securing exploration companies that the Greenlandic community would like to invest in".
Seven points of concern
Greenland Businessis also strongly critical of the bill and lists seven points of concern:
- Loss of exclusivity for licensees
- Violation of IFC standards and lower ESG standards
- Security challenges and thus insurance consequences
- Risk of loss of attractiveness by engaging local employees to work in license areas
- Loss of attractiveness for investors
- Challenges in obtaining exploitation licenses for an exploration area where local activities have developed, covered by the bill
- Risk of money laundering
Greenland's Business Association warns against "that small-scale projects in the broadest sense will be an obvious area to launder money through".
(20min delay)