Much is made of China “going green.” But maybe more attention should
be paid to China going to Greenland. The island nation’s government has
okayed a $2.35 billion iron ore mining project backed by Chinese
steelmakers that could bring in some 5,000 Chinese workers and would
see around 15 million tonnes (16.5 million tons) of iron more shipped
to China annually. It would be Greenland’s largest industrial development,
bringing in more than its current annual GDP.
The Chinese are arriving just in time. Though Australian and Canadian
companies currently dominate in exploration of Greenland’s natural
resources, actual mining has been kept to a minimum so far. No longer.
Prime minister Kuupik Kleist sees extraction of Greenland’s abundant
natural resources as a way to shake free of Denmark—the island of
57,000 people is a semi-autonomous territory. A bill passed in
December introduced a framework to open up extraction of these
resources, which the peel-back of melting glaciers is making
increasingly plentiful, to foreign wildcatters.
The bill will also allow companies to hire foreign laborers at
lower pay than that enjoyed by Greenlandic workers. That will be
a big boon to companies hoping to use Chinese miners.
The aforementioned iron ore mine project would boost Greenland’s
population by 4%, and that’s not even counting the potential
influx of some 3,000 Chinese workers at an aluminum smelting plant
and two hydroelectric projects that Alcoa is reportedly mooting.
This isn’t wholly uncontroversial, though, and Greenland’s
parliamentary election in March could see the law revoked.
Still Kleist says he does “not see thousands of Chinese workers
in the country as a threat.”
Chinese workers aren’t the only worry, though. A far bigger concern
is the rare earths issue.
China controls around 97% of the world’s supply of these strategically
key metals, which are used in the batteries for cell phones and hybrid
cars, as well as in weapons, medical devices and many other things.
After China began limiting its rare earth exports in 2011, prices for
the elements have spiked. Greenland is thought to have some of the
largest deposits of rare earth elements—one southern Greenland deposit
may yield more than one-tenth of the world’s current deposit volume.
And Kleist recently rejected the European Union’s request that Greenland
restrict mining of its rare earth deposits. (Though Denmark is an EU
member, Greenland is not.) Martin Breum, an expert on Greenland’s
extractive industries, told Reuters that this was a source of alarm
for Western governments.
“Potential Chinese control of the rare earth elements in Greenland is
scary to a lot of governments in the Western world,” Breum said. ”Rare
earth elements are of crucial importance to [many of their] industries.”
There’s still more at stake in China’s Arctic aspirations, writes Paula
Briscoe, National Intelligence Fellow at the Council on Foreign Relations:
If Greenland, a littoral Arctic territory, becomes increasingly dependent
on Chinese investment, Beijing’s influence in Greenland and Arctic affairs
also grows. China’s application to be elevated to permanent observer status
is on the Arctic Council’s agenda in 2013, and Greenland’s administrator,
Denmark, is already a supporter of China’s bid. Should Greenland become
fully autonomous, and then a likely permanent member of the Arctic
Council—two possibilities made more likely by heavy Chinese investment—
China’s increased influence in Greenland could help buy Beijing a proxy
voice in Arctic matters.
In other words, Greenland’s bid for political independence could help
allay China’s resource dependence—and put it literally at the top of
the world in terms of geopolitical clout.