Investors rush to Amaroq’s golden Greenlandic venture
There are few untouched and unmined areas left on the planet, this makes Greenland and its untapped mineral wealth an especially hot commodity. The world is taking note and foreign companies and governments are starting to invest large sums into the Arctic nation. Among those banking on Greenland’s untapped potential is the Icelandic mining company Amaroq Minerals, which this year is commencing a trial mining and processing program in Nalunaq in south Greenland.
“I believe, if these large investment projects progress, Greenland will become the wealthiest country in the world per capita,” says Eldur Ólafsson, CEO and founder of Amaroq Minerals. “And being able to be a part of that journey is very exciting.”
If the stock market is any indicator, Amaroq (AMRQ) has been an unrivaled success. In the past 12 months, AMRQ stocks listed on Nasdaq Iceland, have gone up an astonishing 86,45%. The meteorotic increase is especially notable considering that in the period the main stock market index in Iceland ICEX dipped -0.34%. It is clear that Icelandic investors have started to view Greenland as a smart investment.
The Nalunaq mine in southern Greenland is located 30 km northeast of Nanortalik, Greenland’s 10th largest town with a population of approximately 1,350.
Entering when others exit
Ólafsson started researching mineral potential in Greenland in 2012, at a time when companies were pulling out of the Greenlandic mining industry due to falling commodity prices.
“After the financial crash of 2008, the price of commodities began a steep decline,” says Ólafsson. “The first thing that happens to mining when there is a big price decrease is that companies stop researching and looking for new opportunities. Instead they either keep their current mines running, or close them down all together.”
In recent years, however, the escalating global efforts to combat climate change have catalyzed a surge in the utilization of minerals critical to renewable energy technologies and low-carbon solutions. Key minerals such as lithium, cobalt, and rare earth elements have become indispensable components in the production of rechargeable batteries for electric vehicles and grid-scale energy storage systems. As societies transition away from fossil fuels towards cleaner energy sources, the demand for these minerals is expected to skyrocket, prompting intensified exploration and extraction efforts worldwide.
This demand for minerals has been further exacerbated by Russia’s invasion of Ukraine, which has triggered a profound reassessment of energy security in the West, prompting a significant acceleration in the transition towards renewable energy sources. Here Greenland’s mineral richness, which are crucial for various high-tech applications including electronics, renewable energy technologies, and defense systems plays a key role. For instance, Energy Transition Minerals’s Kvanefjeld project in southern Greenland is one of the largest rare earth element (REE) deposits in the world.
“Exploration in the Arctic is difficult and expensive, you need to travel by helicopter for instance. This cost has traditionally been a big hindrance to the mining industry,” says Ólafsson. “However, new technology such as satellites is making this work more cost effective and opportunities are arising where it is possible to extract minerals that are close to the surface.”
As mines age, the need to dig ever deeper increases and with it the extraction cost, but the world’s hunger for technology will continue to fuel the need for ever more mineral extraction.
“The key element to our thinking is that the world’s minerals will be depleted at some point,” says Ólafsson. “Greenland is unique in its potential mineral reserves and those are vital to Western nations. In the context of the Arctic it is also a lot more accessible than most places and with continued investment in infrastructure, that accessibility will only increase.”
Investing in a rising nation
Currently around 50% of Amaroq’s staff are local Greenlanders and Ólafur is adamant that his company leaves a positive legacy that benefits the population. The company funds sports teams and cultural events and has sought to increase biodiversity through forestation.
“It is important for us that our investment in this great country creates something that matters,” says Ólafsson. “These are diligent, honest, welcoming and kind hearted people. I grew up in a farming community in Iceland and the society in south Greenland reminds me a lot of where I come from.”
Two nations closer than they realize
Only 462 kilometers, as the bird flies, separate Iceland and Greenland, and while the two nations shared a head of state with the Danish king until Iceland’s independence in 1944, historically cooperation between the two has been somewhat limited.
Governments on both sides of the Denmark Strait have been working to increase that cooperation and strengthen their ties. In 2013, an Icelandic consulate opened in Nuuk, which was followed 5 years later by a Greenlandic one in Reykjavík. In 2020, the Icelandic government released a report on its future policy regarding ties with its northern neighbor, which stated that the changing geopolitical landscape in the Arctic meant that establishing closer ties between the two nations has never been as vital.
“Strengthening our ties with Greenland is immensely beneficial to both nations,” says Ólafsson. “For us as Icelanders, this is the biggest opportunity facing us. Unlike Iceland, Greenland is colossally important to the rest of the world.”
Former President Donald J. Trump was rightly ridiculed when he suggested the US buy Greenland, but underneath the surface level silliness lies a very large, untouched nugget of truth—there is money to be made in Greenland’s soil.
“There are maybe three countries left in the world where there are large reserves of minerals which can be extracted through surface mining; those are Columbia, Afghanistan and Greenland. For obvious reasons, Greenland is the most feasible option,” says Ólafsson.
