Sermitsiaq 5th DecemberArbitration proceedings can make new projects more expensive
The historically large arbitration case, which an Australian mining company has brought against both the Danish state and Greenland, may make large and future business projects more expensive while the case is ongoing, assesses the chairman of the Economic Council, Professor Torben M. Andersen.
Tuesday, 05 December 2023 - 11:45
The arbitration case, which the Australian mining company Energy Transition Minerals has brought with a claim for a compensation amount of almost DKK 80 billion, may have financial consequences for other business projects in Greenland.
- The matter may have an impact on future business projects, as it is an uncertainty factor linked to the possibility of changes in regulations and more, states Professor Torben M. Andersen, chairman of the Economic Council, to Sermitsiaq.AG.
He explains that in large projects with significant investment needs, "uncertainty is a significant factor, as these are typically projects with a long time horizon".
Risk premium
- Increased uncertainty can then either mean that investors refrain entirely, or that there will be an extra risk premium attached to the financing, Torben M. Andersen assesses.
Thus, it is not only the raw materials area that may be affected by the arbitration case. For example, the large hydropower projects that require billions of investments can risk becoming much more expensive because lenders want much higher interest rates for their investment.....
SP:
As we move forward into 2024 we need to remember that ETM have an agreement on cost with Clifford Chance Lawyers the fees at this stage are undisclosed but a No Win No Fee is very expensive if we win...
The SP with the large umber of shares on issue is on the cards for consolidation to increase value, a consolidation was proposed at the last AGM and was voted down based on the fact than most of the shareholders are small. However I do think that when the consolidation does come it will happen with a trading halt and announcement. There have been a number of changes within the office and we have a number new heads I believe that the communications have changed slightly....
We need to remember that Kvanefjeld at present is non productive...
We need to be watchful as things progress in 2024....
"Compromise and Collaboration"
"Go Thor"
(20min delay)