THE TYRANNY OF THE ARCTIC
So, Greenland is back in the news.
I’ve been wondering why there hasn’t been some large scale industrial development over there, given that the geological map shows reserves for a lot of critical minerals.
Then I did what I always do - started digging, and I educated myself on just how freaking hard it is to mine for resources in Greenland (and the Arctic in general). 🧵👇
So, Greenland is back in the news.
I’ve been wondering why there hasn’t been some large scale industrial development over there, given that the geological map shows reserves for a lot of critical minerals.
Then I did what I always do - started digging, and I educated myself on just how freaking hard it is to mine for resources in Greenland (and the Arctic in general). 🧵👇
Infrastructure deficit.
The single biggest cost driver in Greenland is the lack of basic infrastructure. In most mining jurisdictions (like Australia or Canada), a mine can often connect to an existing power grid or road. That’s not the case with Greenland.
80% ice, no roads connecting towns in Greenland, every settlement is effectively an island.
There is no national power grid to plug into either, which means mines must build their own power plants, adding hundreds of millions of dollars to upfront capital expenditure.
Also, since mines are to be located located in remote wilderness, companies must construct full-service towns for their workers - housing, sanitation, you name it.
The single biggest cost driver in Greenland is the lack of basic infrastructure. In most mining jurisdictions (like Australia or Canada), a mine can often connect to an existing power grid or road. That’s not the case with Greenland.
80% ice, no roads connecting towns in Greenland, every settlement is effectively an island.
There is no national power grid to plug into either, which means mines must build their own power plants, adding hundreds of millions of dollars to upfront capital expenditure.
Also, since mines are to be located located in remote wilderness, companies must construct full-service towns for their workers - housing, sanitation, you name it.
Extreme environment
The Arctic environment imposes strict limits on when and how work can be done, drastically increasing costs.
For starters, you can only work 3-4 months max before the darkness and extreme cold halt operations (or make them very expensive).
Shipping lanes are often frozen or clogged with icebergs for large parts of the year too.
And building heavy industrial processing plants on permafrost requires expensive, specialized engineering.
The Arctic environment imposes strict limits on when and how work can be done, drastically increasing costs.
For starters, you can only work 3-4 months max before the darkness and extreme cold halt operations (or make them very expensive).
Shipping lanes are often frozen or clogged with icebergs for large parts of the year too.
And building heavy industrial processing plants on permafrost requires expensive, specialized engineering.
Human capital.
Greenland has a population of 57k - about the size of a single small town in the US or Europe.
There is physically not enough surplus labor to staff heavy industry. Modern mining requires highly specialized engineers, geologists, and heavy machinery operators. These workers need to be flown from Canada or Australia (as well as other countries with such expertise).
The cost for such labor + flying them in and out, accommodation, and the wages required to tempt workers to remote Arctic locations is pretty steep.
Greenland has a population of 57k - about the size of a single small town in the US or Europe.
There is physically not enough surplus labor to staff heavy industry. Modern mining requires highly specialized engineers, geologists, and heavy machinery operators. These workers need to be flown from Canada or Australia (as well as other countries with such expertise).
The cost for such labor + flying them in and out, accommodation, and the wages required to tempt workers to remote Arctic locations is pretty steep.
Now, I’m not saying: don’t extract the resources. I’m just explaining to myself (and others that may not know) why this hasn’t been done yet.
It’s difficult, expensive, and up until recently - unnecessary (since we used to get our REE from China).
So before shitting on DK or EU for not “doing enough” to develop Greenland, remember that…nobody did. Because it’s a fight against the most brutal conditions nature has to offer.
It’s difficult, expensive, and up until recently - unnecessary (since we used to get our REE from China).
So before shitting on DK or EU for not “doing enough” to develop Greenland, remember that…nobody did. Because it’s a fight against the most brutal conditions nature has to offer.
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