China wants Greenland station ‘ASAP’; one candidate site near planned China Nonferrous investment

China wants to establish a permanent ground research station in Greenland ‘as soon as possible’, Yu Yong 俞勇, a researcher at the beautifully named PRIC (Polar Research Institute of China, 中国极地研究中心), said at the yearly Reykjavik ‘assembly’ of the Arctic Circle, an organisation chaired by former Icelandic president Ólafur Ragnar Grímsson. This was first reported by Danish journalist Martin Breum for Sermitsiaq and on his Twitter account. Breum has long been covering Greenland, where he lived as a teenager, and has written a must-read book whose English version is free to download.

Breum tweeted a picture showing two candidate locations for the base:



Via Martin Breum’s twitter.

The map shows two possible locations. One is in the southwest, near Kangaamiut or Maniitsoq. (Readers with better visual acuity and knowledge of Greenlandic geography may come to a more precise conclusion.) The northern one is of particular interest, and will be discussed below. The third red mark in the northeast, labelled 丹麦站 Dānmài zhàn ‘Danish station’ is indeed a Danish station, the military and scientific outpost Station Nord.

The Chinese delegation at the Reykjavik event includes several officials: State Oceanic Administration deputy director Lin Shanqing 林山青, MFA special Arctic representative Gao Feng 高风, and of course PRIC head Yang Huigen 杨惠根 (who sits at the board of the entity behind the event). Skimming through the programme, I see three sessions organised by Chinese entities (the PRIC (whose session is plenary), Beijing Normal University (北师大) and the China-Nordic Arctic Research Centre (CNARC, 中国—北欧北极研究中心)). In terms of quantity, that makes the Chinese presence comparatively strong among non-Arctic states, larger than e.g. South Korea’s. However, the Chinese delegation is unremarkable in terms of seniority next to, e.g., the UAE and, of course, some of the Arctic states.

It is remarkable that the event was chosen for the first official discussion of the Greenland station plans. On the other hand, it was left to a relatively junior figure, Yu Yong, a marine microbiologist with an ‘associate research fellow’ (副研究员) position. (Breum’s article misidentifies him as ‘vicedirector of PRIC’; the confusion might have been due to Yu’s status as ‘deputy head’ of a division within the PRIC.) Chinese plans for a base in Greenland had been under discussion for some time, in particular during a SOA visit to Greenland last year. What the announcement shows, besides the public disclosure of the potential locations, is that China can already count on the agreement of the Greenland government. As Breum notes, scientific research falls under the devolved purview of the Greenland government, and Copenhagen’s approval isn’t necessary in principle.

As quoted by Breum, Yu said China wants to build the station “as soon as possible”, while adding there’s no clear schedule yet.

The more impressive of the two proposed locations would of course be the northernmost one. The area will be familiar to regular readers: it’s near the Citronen Fjord zinc project, where minor miner Ironbark from Australia holds a mining permit. An arm of state-owned China Nonferrous (中色) has long had a series of non-binding agreements with Ironbark, showing an interest in financing and building the project. Zinc prices have been rising, which is good news for Ironbark, but the site’s remote location and lack of infrastructure make costs unusually high (indeed prohibitive, according to some). Ironbark shares don’t show signs of generalised enthusiasm for the mine.

There is, however, one entity that remains interested in the project: China Nonferrous, specifically its listed arm NFC (中色股份). One of its deputy general managers (副总经理), Qin Junman 秦军满, visited the Citronen site last August, accompanied by the crème of Greenland’s resources ministry: the minister (naalakkersuisoq) Múte Bourup Egede and the top career official, deputy minister (departmentschef) Jørgen Hammeken-Holm. The display of support is understandable: Citronen Fjord is one of two important, viable projects for Greenland’s economic development; the other one, the Kvanefjeld (Kuannersuit in Greenlandic) uranium and rare-earth project, also with Chinese involvement, is controversial, and indeed less to the minister’s liking. Ironbark is now working with NFC towards obtaining financing from Chinese banks.

If the project goes ahead, the Citronen mine would be, by a long stretch, the world’s northernmost (at 83°N), and indeed the northernmost settlement of any kind on dry land. During the initial phases of the project, most workers will be foreign, indeed most likely Chinese, so that nationality, and the state behind the entity doing the building, would hold the record. A competitor for that record could be the planned Chinese research station, assuming the northern site is finally chosen. It’s hard not to see the connection between these two planned locations; as is well known, neither Chinese scientific projects of this kind nor those of state-owned companies are disjoint from broader state policies. An obvious example is the Kvanefjeld uranium+REE project, where the Chinese investor is under the PRC Ministry of Land and Resources, and “implements a vision” reached at a meeting between the minister and Greenlandic officials.

(For those wondering: Citronen (‘the lemon’) Fjord isn’t so named because any citrics grow there. It honours Jørgen Haagen Schmith, who used the pseudonym as a resistance fighter during the Nazi occupation of Denmark. Walter Turnowsky has written about this for Sermitsiaq. I try to provide Greenlandic names for any Greenland locations I mention on this blog, but I’ve looked and asked around and apparently Citronen Fjord doesn’t have another name, possibly due to its remote location even by Greenlandic standards.)

As Yu’s map helpfully shows, the northern candidate site is located northwest of Station Nord, a rather strategic point. It’s only to be expected that the Danes are paying close attention at Chinese plans for the area. Indeed, some minor friction already occurred late last year, when Ironbark was applying for the exploitation licence; the Danish foreign ministry wrote to Greenland enquiring about the project, something the local authorities didn’t appreciate. The fact that no such enquiries had been sent concerning other mining projects without Chinese involvement makes the People’s Republic the elephant in the room.

Even though it hasn’t generated the mining boom that, as some might have imagined at some point, would suddenly make Greenland economically independent of Denmark, Chinese interests in the island are slowly increasing. Besides the mines and research stations, another interesting development is the last few month has been the start of the construction of a satellite ground station in cooperation between Beijing Normal University (北师大), Tele-Post and the Greenland Institute of Natural Resources (Pinngortitaleriffik/Grønlands Naturinstitut), announced last May.


Shenghe investment in uranium+rare-earth mine “implements vision reached during minister’s meeting with Greenlanders”

Shenghe 盛和 Resources’ investment in the Kvanefjeld project was made “in order to implement the vision” on mining cooperation “reached at the time of a meeting between minister of land and resources Jiang Daming 姜大明 and Greenland officials in 2015”, according to information published by the IMUMR, the state institution that controls Shenghe. The IMUMR is under Jiang’s ministry.

The acquisition, first announced in September and completed in the last few weeks, gives Shenghe one eigth of shares in Greenland Minerals and Energy (GME), the ASX-listed company running the Kvanefjeld project, as well as the right to appoint a non-executive director (Wenting Chen) to its board. This makes Shenghe the largest individual shareholder GME. Once the project receives an exploitation permit, Shengha could eventually increase its involvement to a 60% stake, a possibility whose presence in the September agreement GME took pains to deny and later confirm. GME’s initial unwillingness to acknowledge Shenghe’s stated intentions was perhaps due to a wish to avoid eliciting negative reactions in Denmark, where news about increasing Chinese presence in Greenland feed security worries.

The IMUMR’s explicit reference to the Kvanefjeld investment as part of a “vision” is another sign of the key role the Ministry of Land and Resources has in China’s moves in Greenland. GME’s talks with Shenghe did indeed start in 2015, possibly after those ministerial meetings. Until then, the Kvanefjeld project looked more likely to be developed with another state-owned company, China Nonferrous (中色), as envisaged by an earlier (non-binding) agreement.

Shenghe’s Greenland U+REE investment gets FIRB approval

Australia’s Foreign Investment Review Board has approved Shenghe 盛和 Resources’ purchase of one eighth of GME, the ASX-listed owner of the license for the Kvanefjeld uranium-rare earth project in Greenland. Other approvals should be coming these days, as everyone concerned in Australia and China should be happy with the deal.

Meanwhile in Greenland, things aren’t looking so simple. As explained in my previous post, Greenland is ruled at the moment by a Große Koalition of parties that agree on everything, except uranium mining. GME should be applying for a production permit before the end of the year, and that application could be handled by Múte Bourup Egede, a new minister who has already said he’s ‘against’ uranium mining, in so many words. Conflict within the ruling coalition is already showing. On the one hand, Jens-Erik Kirkegaard (long-time readers will remember his ’13 Jiangxi Copper visit) from majority partner Siumut thinks that GME have earned themselves a right (retskrav) to get their permit as long as they comply with environmental and other regulations, and the new anti-uranium minister “can’t just take a political decision.” On the other hand, Sara Olsvig, chair of coalition partner IA (long-time readers will remember her Tibet visit and meeting with the Tibetan gov’t in exile), says GME’s application could be rejected not only on environmental, but on “political” grounds (Weekendavisen via Sermitsiaq). Egede, the new minister, who’s from Olsvig’s party, has said he’ll decide based on the application’s merits as well as ‘listen to the people.’

Shenghe: new Greenland minister ‘against uranium’

The composition of Greenland’s ruling coalition has changed in the last few days, becoming more ideologically homogeneous (viz., homogeneously pro-independence). Their agreements, however, don’t cover the most crucial issue from the perspective of Sino-Arctic relations: the uranium-rare earth project in Kvanefjeld (Kuannersuit) in the south of the island.

As I reported a bit over a month ago, state-linked rare-earth company Shenghe 盛和 Resources agreed to buy a minority stake in GME, the Australian owner of the project, and expressed an intention to eventually increase that to a 60% stake if things go well. That remark, which I wrote after simply reading Shenghe’s Shanghai Stock Exchange announcement, generated a minor controversy after being picked up by Danish and Greenlandic media, who wondered why the 60% part was left out of GME’s own announcements. It even prompted Greenland’s ministry for natural resources to say they would ‘investigate’ and ask GME to show them the contract they signed with Shenghe, which GME declined, arguing they don’t trust the Greenlandic government’s ability to keep it confidential. (Good luck telling the Chinese gov’t you won’t show them documents because you don’t ‘trust’ them.)

Even with those disagreements, which largely boil down to poorly handled PR; the GME-Shenghe project had good chances of getting through under the previous coalition, and specifically the previous natural resources minister, who were unambiguously pro-uranium. That has changed now. The two junior parties in the current government are against uranium mining in Greenland. The coalition’s official position, if we may call it that, is now that they’ve ‘agreed to disagree’ on uranium.

The new Naalakkersuisoq (minister) of natural resources, Múte Bourup Egede, is himself from the anti-uranium Inuit Ataqatigiit (IA) party, and is “against uranium mining,” in so many words. His ministry will have to review GME-Shenghe’s application for a production license, expected to be submitted as early as this year. He says he can’t anticipate what the decision will be like before seeing the application, and that it will be made based on the natural resources law and after ‘listening to the people’. It’s early to tell; pro-uranium forces could prevail and let the project go ahead. The current coalition setup and portfolio allocation could also be shorter-lived than the application process (Múte is the fourth minister in charge of natural resources in just over a year).

GME are optimistic, though. Their ASX-listed shares fell 20% in the days following the coalition shakeup (but are still well above the price one month ago, and almost twice what Shenghe agreed to buy them at), after which they stated they’re happy with the new Große Koalition and praised their plans for the mining sector without mentioning the explicit disagreement over their project.

Meanwhile in China, another Greenland minister, Vittus Qujaukitsoq, whose portfolio includes commerce, energy and foreign affairs, is leading a delegation in a week-long visit. Compared to his previous Chinese visits, this one seems to show increased emphasis on the seafood and sealskin industries over mining. The trip includes stops in Qingdao and Chongqing.

more on Shenghe’s Greenland deal

A couple of weeks ago, I noticed that Shenghe Resources’ agreement to buy into the Kvanefjeld (Kuannersuit) uranium and rare-earth project in Greenland from ASX-listed GME includes an option to eventually acquire a controlling stake. That simple observation, based on just reading Shenghe’s Shanghai Stock Exchange disclosure, generated some attention after being picked up by Danish daily Politiken and later reflected in Greenlandic media. While rather unremarkable, the 60% option snowballed into something of a controversy after GME started denying its existence, which even prompted Greenland’s resource minister to say they were “investigating” the matter. The fact that GME’s own announcements and press comments didn’t say a word on Shenghe’s further plans for over a week led sources to speculate on the reasons they’d want to keep quiet about what would seem to be rather good news. Yesterday, after letting all this speculation brew for more than a week, GME published an announcement to ‘further clarify’ the issue, now in terms entirely consistent with Shenghe’s announcement. GME also wrote to Greenland’s state broadcaster KNR, admitting for the first time that Shenghe “can be interested in a direct share of the project on a level of up to 60%” (my back-translation from the Danish). Any misunterstandings are blamed on ‘translations’. (Translator-scapegoating is a time-honoured custom in the Chinese business world; cf. this old post of mine, that includes quotes from the Sino-Arctic Bard.)

At any rate, whatever discord ‘translators’ (or the media) might have sown, GME’s current official stance doesn’t contradict Shenghe’s official announcements. We can therefore continue to consider the SSE announcement authoritative.

I don’t normally publish translations of extended passages here, since that feels like doing other people’s homework, but in the interest of readers from Greenland, who are surely entitled to know the details about a project of such importance, I’m going to provide the relevant parts of Shenghe’s SSE disclosure together with a quick-and-dirty (rather literal) translation (original text here).

Page 2, under “Overview of the transaction”.


After the Kvanefjeld project has obtained an exploitation permit and completed technical optimisation, on the basis of commercial terms that will be negotiated between the two sides, Shenghe Resources may choose to acquire an interest in the project not exceeding 60%.

Page 9, under “Future cooperation in the project”.


After the Target Company [GME] has obtained the approval of the Greenlandic authorities regarding the application for an exploitation permit for the Kvanefjeld project and technical cooperation has progressed to the satisfaction of both sides, the Subscriber [Shenghe Leshan] may formally notify the Company [GME] in writing of its intention to obtain a 60% interest in the project. After receiving said notification, both sides shall amicably negotiate the terms for a merger or acquisition transaction, including the value of the transaction, the project’s financial situation, and establish a joint entity (be it of company or non-company type) in order to develop the project. Said merger or acquisition shall be subject to all the necessary government approvals.

Thus spake Shenghe. As anyone who’s been involved in business negotiations with Chinese partners knows, the language tends to be less explicit in Chinese than in English documents. In particular, it could be argued that the Chinese document is ambiguous on whether GME has an obligation to consider Shenghe’s eventual intention. In practice, however, this ambiguity is of little practical consequence, since, as I noted in my previous post, the language implies that there’s no obligation to sell (that’s the ‘amicable’ part).

For completeness, here are the relevant parts of GME’s latest ASX announcement:

As part of the broader strategic relationship and subject to the Company receiving a mining (exploitation) licence for the Kvanefjeld Project and the successful completion of technical cooperation to enhance the Project, Shenghe may notify the Company of their intention to negotiate terms to acquire a direct interest in the Project, in association with project development.

Should this occur, the parties would enter into commercial negotiations in good faith. Any such project level investment and associated agreement would be subject to regulatory and commercial considerations, as well as relevant approvals. There is no contractual obligation on either party to reach such an agreement.

This is consistent with Shenghe’s announcement, except it doesn’t say ‘60%’ and adds an explicit statement that the option is non-binding.

To sum up, a Chinese state-linked company has a non-binding option to buy a majority stake in a major uranium and rare-earth project in Greenland, as I was the first to report in two blog posts. This is important news, but entirely unsurprising, as it has long been known that the main Greenland mining projects are actively seeking to involve Chinese players.

Kvanefjeld is the most important mining project with short and medium-term real prospects in Greenland, and is of global significance as a major REE deposit. The agreement (and especially the 60% option) is very good news for GME, whose shares rose sharply during the weeks leading to the signature of the deal, and are expected to keep climbing as more information emerges on the project’s technical progress. Greenland ministers also welcome the deal, which is also unsurprising given they’ve been actively looking for Chinese investors (with mixed success) for a long time.

On the other hand, the project is not free from controversy. Opposition to the project is known to exist in both Greenland and Denmark. Such opposition mainly comes from two angles: concerns, strongest in Greenland, about environmental issues (both about mining in general and uranium mining in particular) and qualms, mainly operative in Denmark, about China’s influence in the region. Greenland is a democratic society, meaning that engaging the public on these issues is an essential part of developing a mining deal. Chinese companies (and Shenghe specifically) tend to be poorly prepared to deal with that aspect of mining investment, which is one of the reasons partnerships with Western companies are sought. GME have been active in Greenland for quite some time and can be expected to interact with the public in a reasonably smooth way, even if their handling of the 60% storm-in-a-teacup wasn’t that slick. Kvanefjeld, Chinese investment and Chinese labour are also enough of a known quantity in Greenlandic public discourse by now, meaning that the brouhaha that surrounded the Isua project isn’t likely to come back, at least not in the same form.

To my great delight, the online edition of Greenland paper Sermitsiaq, which I frequently read, has reported in Danish on my account of Shenghe’s state links.

the 60% saga: update on Shenghe in Greenland

Two separate sources say Greenland Minerals and Energy, the Australian company that has agreed to sell a stake in a Greenland uranium and rare earth project to Shenghe 盛和 Resources, now denies the agreement includes an option for Shenghe to increase its interest to a controlling one once the project enters the development stage.

An option to acquire a controlling stake (up to 60%) in the Kvanefjeld (Kuannersuit in Greenlandic) project is discussed in clear terms in a Shenghe Shanghai Stock Exchange disclosure, as I was seemingly the first English-language source to report. The language suggests GME is not bound to sell Shenghe such a large share, should they ask for it.

The purchase option should be good news for GME, so it’s hard to see why they would deny it.

It’s been known for ever that some sort of more or less Chinese state-connected involvement would eventually begin in Kvanefjeld. GME had long had a non-binding agreement with a unit of China Nonferrous (中色); as explained in some detail in my post from last week, Shenghe’s main shareholders are also mostly state organs.

This information has now reached the mainstream media. Various experts quoted by Politiken draw (geo)political implications of the deal. Rear Admiral (kontreadmiral) Nils Wang, an Arctic expert with the Danish Defence College, expects the deal to attract attention in the US: “It’s very easy to interpret this not just as the classic Chinese-style long-term thinking, but also as two [the other one being General Nice (俊安集团) purchase of Isua] of China’s slowly creating for themselves in Greenland the same kind of soft-power influence they already have in Iceland”. In Greenland, Aaja Chemnitz Larsen of the opposition party Inuit Ataqatigiit (IA), talks of “a need to know how big an influence China can get over the project”, on which she intends to query the Greenlandic and Danish governments. So that’s already a Greenlandic politician and a Danish kontreadmiral for whom the 60% number and Shenghe’s state connections could be interesting data points.