PERTH (miningweekly.com) – ASX-listed Greenland Minerals (GGG) has requested arbitration in its dispute with the governments of Greenland and the Kingdom of Denmark, over the future of its Kvanefjeld rare earths project.

The Greenland government in November banned uranium mining, impacting the development of the Kvanefjeld project.

GGG had previously noted that while the uranium was not of great economic significance to the Kvanefjeld project, the revenues generated by the uranium and other by-products would serve to reduce the rare earth production costs.

The company on Wednesday told shareholders that it had now initiated legal proceedings after discussions with the Greenland government failed to deliver a viable solution.

The primary objective in the arbitration is to protect its investments in the project and to obtain the exploitation licence that is required for the project to proceed, GGG said. To that end, the company’s subsidiary, Greenland Minerals A/S (GMAS) is maintaining its application for an exploitation licence and, in the arbitration, GMAS is seeking an independent legal ruling on whether the uranium ban applies to GMAS's exploration licence.

GMAS was of the belief that the uranium ban would not apply to the Kvanefjeld project, as legislation attached to the ban stated that it would not apply to existing licences, and the explanatory note to the Act emphasises that it does not apply if its application would result in an expropriation.

“We tried to find a constructive solution through dialogue with the government of Greenland, but they made it clear that they would not move from their position that Act No. 20 applies to us and our exploitation licence will not be granted. In these discussions, the government also made it clear that they do not consider themselves to be under any obligation to compensate us,” said GGG MD Daniel Mamadou.

“Greenland Minerals has spent more than ten years and has invested over A$130-million in the Kvanefjeld project. The company followed every government regulation and request throughout the process. The project has been through a rigorous environmental assessment and it remains one of the largest undeveloped rare earth assets in the world and a key future source of the technology metals that will be required for the clean energy transition.

“We are starting the arbitration process to get confirmation on whether Act No. 20 actually does apply to us and blocks our exploitation licence application. Should this be the case, we claim damages in compensation for expropriation. As the board of GGG, our duty is to protect our shareholders’ interests: the position taken by the government of Greenland leaves us with no other alternative than to enforce the company’s right to an exploitation licence.”