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.
While no one seems to be expecting to see much actual mining at the Isua project in Greenland any time soon, I thought its new Chinese owner, General Nice (俊安集团), was worth a closer look, since so little has been written about the company. So I’ve put together a ‘backgrounder’ with highlights from my recent, and not so recent, research on General Nice for everyone to enjoy. Admittedly Isua, an asset which, by all accounts, its new owner plans to simply sit on for the time being, isn’t the hottest topic in the grand scheme of things, but I think the story makes up for that medium-to-low hotness with a flashback to the Shanxi coal rush, with its polluted skies and wild bribing, and a showdown with the ousted ruler of Burkina Faso. Go read the whole thing (still being edited but already up) and confound your fellow dinner-party guests with more General Nice trivia than a barrel of General Nice wine can wash down.
It’s been almost two weeks since the announcement that General Nice (俊安集团) has acquired rights to the Isua iron project in Greenland, and Chinese business media’s reporting on it starts to show a pattern of mild skepticism about the likelihood of the new license owner actually developing the mine any soon.
Writing for Caixin (财新网), Zhang Boling 张伯玲 quotes someone involved in the transfer of Isua to General Nice to the effect that it was a real bargain: the price is lower than you’d imagine, and “not all of it in cash.” The source stopped short of disclosing any numbers though. Zhang’s piece also channels skepticism from industry sources that General Nice can get investors attracted to a project given the lack of infrastructure and development and transportation costs given the current state of the iron ore market.
Zhang Guodong 张国栋 from Yicai 一财 contacted General Nice but was unable to elicit much comment other than that there will be public statements when the time comes. Industry sources recall that, a few years ago, when the iron market was looking better, many international majors including a large Chinese steelmaker were looking at Greenland with interest, where deposits are large, reserves abundant and you tend to bump into high-grade magnetite. Since numbers don’t add up at the moment, General Nice might be thinking strategically, in terms of NSR shipping becoming feasible at some point. Zhang Lin 张琳, an analyst with LGMI (兰格钢铁网), enumerates the hurdles: a short window for extraction each year, high shipment costs, lack of basic infrastructure, leaving “not much room for profit”. An unidentified industry source also reminisces the days when Isua was in everyone’s eyes, while now, they add, “with even the three largest miners being unable to sell their iron ore, only a fool would develop an iron ore mine in Greenland.” Or literally a ‘silly melon’ (shagua 傻瓜).
The suggestion is that the deal is rather speculative: by throwing around the idea that they’ve got resource assets, General Nice (who have HKEX and SGX-listed subsidiaries) might be able to get their share prices a bit up.
A piece by Zhang Han 张涵 for the 21st Century Business Herald (21世纪经济报道) reports doubts about whether General Nice will be able to deal with the financial and political issues that got the project stalled the previous times. The $2.35bn figure quoted as the investment required by the project is still a “variable” taking on a different value now as conditions might have changed from London Mining’s days.
The license for much talked about Isua iron project in western Greenland has now gone to Jun’an aka General Nice Group (俊安集团), who acquired London Mining Greenland through its Jersey parent last December, the Greenlandic gov’t informed yesterday (that link also provides a profile of General Nice). The previous parent, London Mining, went into administration last year after Ebola hit Sierra Leone, the country where their main asset, the Marampa iron mine, is located. London Mining, a British company, had considerable Chinese contacts, some of which I referred to in my April 2013 article on the Isua issue.
Yesterday’s Chinese edition the Global Times (环球时报) carried an article signed by their special envoy to Greenland Liu Zhonghua 刘仲华 that included interviews with Aleqa Hammond and Sara Olsvig.
The piece, entitled “No market for ‘China threat theories’ in Greenland”, goes to considerable lengths to emphasise the island welcomes investment from everywhere, in particular from China, and that fears of China’s intentions come from outside, specifically from English-language media. Liu refers to exaggerated reports about possible future Chinese involvement in the Isua iron project, and quotes Ms Hammond’s description of the situation.
Remarkably enough, the article calls Ms Hammond Greenland’s ‘Prime Minister’ and totally ignores what’s been going on in Greenlandic politics in the last few weeks. There’s also nothing about the fact that London Mining’s Isua project faces a rather uncertain future after the company went into administration.
The Global Times‘ envoy dates his insights about Greenland to a “recent” visit to that island. He interviewed Aleqa as recently as June 20. Unless he’s been to Nuuk again since then, that means material from that interview has taken four months to surface (to be fair, some already appeared on the People’s Daily on October 10).
There’s also no mention of Chinese interest in Greenland mining, which includes Jiangxi Copper’s exploration activities and China Nonferrous’ interest in rare earth projects.
Opposition leader Sara Olsvig is quoted about the deep impression a 2012 trip to China, that included visits to Tibetan areas in Qinghai, left her. She also “learned a lot from China’s political development”. A more global assessment of Ms Olvig’s interest in Chinese issues might have benefited from a word or two about her 2011 meeting with the prime minister of Tibet‘s government in exile.
More on the Global Times‘ style, with links to discussion elsewhere, in my previous post on one of their articles.