Soon after visiting the NFC-built aluminium smelter in Pavlodar, Kazakhstan, Wang Hongqian 王宏前, the company’s GM, flew to Iceland to sign an agreement with local company Klappir Development about plans to build a new aluminium smelter in Hafursstaðir, between the villages of Skagaströnd and Blönduós (some 100 km west of Akureyri). Actually, Wang visited the Kazakh smelter a month before going to Iceland, but I just wanted to juxtapose the projects. The Hafursstaðir plant has a planned capacity of 120 tonnes per year, but in a second stage it might eventually reach twice as much, just a bit below that of Pavlodar smelter. PM Sigmundur Davíð Gunnlaugsson and Chinese ambassador Zhang Weidong 张卫东 were present at the signature. NFC (有色股份) is the largest listed subsidiary of state-owned integrated miner China Nonferrous.
The agreement is being called a letter (‘statement’) of intent (viljayfirlýsing) by Icelandic media and an MOU (谅解备忘录) by the Chinese embassy. Whichever the case, we might assume the agreement is non-binding, given that the project’s feasibility depends on securing electricity from nearby power plants, for which it must compete with other, more advanced projects. Icelandic reports talk of a turnkey deal for which NFC would help muster 70% of the financing from ‘Chinese and other’ banks. The Chinese embassy simply says NFC will conduct a feasibility study and then talk again.
Landvernd, an environmental NGO, are firmly against the idea. Nearby municipalities are OK with it, likely looking forward to the 240 permanent jobs the smelter would create.
Klappir has been trying to get NFC involved in building an Al smelter in Iceland for more than two years. Ma ‘Blubbermouth’ Jisheng 马继生, the previous Chinese ambassador and apparetly a Japanese spy, had welcomed the negotiations during a 2013 meeting with Klappir’s owner Ingvar Unnsteinn Skúlason.
There are already three aluminium smelters in Iceland. In 2013, the aluminium industry accounted for 35% of the country’s exports of goods and more than two thirds of its electricity consumption.
China Nonferrous is also involved in mining in Greenland, through agreements with Ironbark for the Citronenfjord zinc project and with Greenland Minerals and Energy for the Kvanefjeld uranium and rare-earth mine, where a pilot plant has already yielded some concentrate.
If you’re looking for an overview of Chinese mining activities in Greenland thorough enough to talk your fellow dinner-party guests into submission, then I know where you can procure one. The University of Nottingham’s China Policy Institute Blog has just posted such an overview, titled “Shock and ore“, in which I go over the mining ventures with some degree of Chinese participation, with an emphasis on General Nice, the new owner of the Isua mine.
John Mair from Greenland Minerals and Energy has told Chinese news site DZH News (大智慧) that a feasibility study for the Kvanefjeld rare earth project is almost done, and that trial production might start once an environmental study is ready later this year.
China Nonferrous (CNMC, 中色), a national state-owned integrated miner, is involved in GMEL’s Kvanefjeld project through its largest listed subsidiary, Shenzhen-listed NFC (中色股份). This involvement officially began with a non-binding MoU between NFC and GMEL signed one year ago (‘China Nonferrous enters Greenland rare-earth game‘). That cooperation seems to be progressing towards more concrete form as, according to a recent GMEL announcement, multiple meetings between the two companies have been taking place during the past year, both at management and technical levels.
However ‘non-binding’ it might be at the moment, cooperation between China Nonferrous and the Kvanefjeld operator is an MoU made in Heaven. The Kvanefjeld mine is expected to produce output fitting the needs of China Nonferrous’ colossal REE separation plant under construction in Xinfeng 新丰 county in Guangdong, and rather cheaply at that.
GMEL has also announced they’ve secured up to $20m from Long State (远邦投资), a HK-based resource investment company with Mainland connections I might (or might not) have occasion to talk about in some future post. They also say they’re looking forward to getting more financing during this year.
Other than in Kvanefjeld, Nonfezza are also involved in Ironbark’s zinc project in Citronenfjord at the other end of Greenland.
China Nonferrous (中色) listed arm NFC has signed a new non-binding MoU with Ironbark for its Citronen zinc project in northern Greenland. A previous agreement already mentioned NFC would facilitate Chinese funding for a large part of the development costs, to which the new MoU adds an option for the Chinese company to eventually buy a minority share in the project.