Looks like right place, right time for PGM.It is — or was — one...

Looks like right place, right time for PGM.

It is — or was — one of the most inhospitable places on Earth, where temperatures plunge to -60C and darkness reigns for months at a time.

Now, however, a combination of retreating ice sheets, soaring metal prices and a drive for independence from Denmark have unleashed a rush for gold, zinc, lead and oil exploration in Greenland.

Greenland’s Government granted approval this month for the opening of the province’s first new gold and silver mine at Nalunaq.

Nick Hall, chief executive of Black Angel, the AIM-listed mining group that has secured the rights to the site, said that it was in “the vanguard” of Greenland’s emerging mining industry — something that is unlikely to please environmentalists concerned by the impact on the province’s fragile Arctic ecosystem.
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The Catlin Arctic Survey said that within a decade the Arctic Ocean would be an “open sea” almost entirely free of ice. Ice cover during the summer months would have entirely disappeared within 20 years but most of the decrease would happen before 2020, it said.

Mining and oil companies have been among the first to view this as a commercial opportunity.

Mr Hall said that the industry had been given a boost this year by soaring base metal prices, which have risen 73 per cent on average since the start of this year, according to figures from the London Metal Exchange.

The price of lead and zinc — both of which can be found in large quantities in parts of Greenland — have soared by 124 per cent and 69 per cent respectively this year, bolstering the economics of new developments in frontier mining provinces such as Greenland.

Ironbark, an Australian company, is planning to open a zinc and lead mine on the country’s northern coast, while Canadian companies are also actively exploring for minerals.

As the glaciers that cover 80 per cent of Greenland gradually recede, mining companies can now explore in areas that previously were inaccessible and also operate for longer each year than was previously possible.

Mr Hall said that at another site 400km north of the Arctic Circle, where Black Angel is hoping to open a mine in 2010, Greenland’s warming climate was providing fresh opportunities by allowing it to explore previously covered rocks. “The retreating glacier revealed an outcrop of minerals that we are now able to mine. That has certainly been a benefit to us.”

The mine had operated before but had been closed down in 1990 because of low world prices and the difficulties of operating so far north. Mr Hall said that milder temperatures meant that it was now possible to work the mine all year round.

He said that the Greenland Government was keen to develop its mineral resources because it is pushing to win independence from Denmark. “At the moment the Greenland economy relies heavily on fishing, so the development of minerals is their best chance,” he said.

Chris Pearson, mining analyst at Daniel Stewart, said that Greenland was attractive because, despite the high cost of operating in such extreme conditions, it was stable politically. However, he said, environmental concerns were a big concern.

Greenland is also thought to have huge undiscovered reserves of oil — a prospect that has pricked the interest of Cairn Energy, the Edinburgh-based oil explorer. On Thursday, Cairn said that it had struck a $310 million (£190 million) deal with Petronas, of Malaysia, to farm out a 10 per cent block off the coast of Greenland. Cairn is planning to start drilling in Baffin Bay in 2011.