Mining in Greenland environmental frontline of global warming
In Greenland, there are currently around 70 large-scale exploration and exploitation licences. As a result, environmental organisations fear that opening up the floodgates to mining and oil and gas production in this way will damage the delicate ecosystems and exacerbate climate pressures in the autonomous territory.
As rapidly increasing temperatures in the Arctic cause the ice to recede in Greenland, there is an international scramble to exploit the resources under the thawing ground. Environmentalists are concerned about the severe repercussions of this emerging plunder, reports Diego Francesco Marin. In a declaration, 141 environmental organisations, including the EEB, urge the Greenlandic and Danish governments, as well as the European Union, to protect Greenland’s unique and fragile Arctic environment, which is threatened by mining, oil and natural gas extraction projects.
“There is a global pattern of opening up new mines in ecologically fragile areas populated by indigenous peoples, as documented in the Environmental Justice Atlas,” says Nick Meynen, a senior policy officer at the European Environmental Bureau (EEB). “We need to wake up to the inconvenient reality that we need to phase out both greenhouse gas emissions and mining. The Arctic is one of those fragile areas where an immediate mining moratorium is crucial.”
Emboldened by never-ending global consumption and the push for renewable technologies around the world, mining companies are bulldozing into areas of the planet that were previously inaccessible due to the enormous costs and technical difficulties of drilling through thick ice. The receding ice, however, is exposing the island’s minerals for large-scale plunder. As Greenland continues to face the difficult challenges that climate change is imposing on its majority Inuit population, the authorities there are tempted to view the royalties they can extract from mining projects as a solution to the island’s economic woes. One of these massive projects is the Kvanefjeld (Kuannersuit in Greenlandic) mining project which, if allowed to go ahead, would be one of the world’s largest open-pit uranium mines and source of REEs, a key component of electric vehicles, smartphones and renewable technologies, and the first mining project of its kind in the Arctic region. The proposed mine lies only a few kilometres from the Kujataa UNESCO world heritage site, where some of the world’s biggest mining projects are looking to stake their claim, threatening this delicate ecosystem. But Kvanefjeld is not the only concern, another large mining project, Kringlerne, contains some of the world’s largest deposits of REEs. Both projects are in the later stages of receiving exploitation licenses, with the Kvanefjled project currently undergoing a public hearing process.
Threats to sustainability
Two years ago, record temperatures melted 600 billion tonnes of ice, which were enough to raise global sea levels by 2.2 millimetres in just two months. With its climate heating up at twice the global average, Greenland is widely recognised as ground zero for climate change. Climbing temperatures, warming waters and melting sea ice are disrupting fjords and coastal ecosystems and posing serious challenges for a nation reliant on fisheries. The icy island’s marine areas contain some of the planet’s cleanest waters. They boost the reproductive capacity of marine biodiversity and the ecosystems in the northern Atlantic Ocean. Moreover, the fishing industry constitutes up to 90% of Greenland’s exports. This second-biggest employing sector would be harmed by the ecological damage caused by oil and gas extraction in open waters, a move that is currently being pushed by officials in Greenland.
The threat to sustainability is not exclusive to the seas. The Australian company Greenland Minerals Ltd’s (GML) flagship project, the Kvanefjeld mine mentioned above, is supposed to create jobs, but these would come at the cost of destroying possibly more existing traditional livelihoods. The southern portion of the island is considered Greenland’s breadbasket which, coincidentally, is also where most of the mineral resources are located and where Kvanefjeld would exploit the REEs. Yet for GML to get to the lucrative metals, the company would generate radioactive byproduct as a result of the presence of uranium. This waste would be stored as tailings. This would inevitably pollute Lake Taseq in the Kuannersuit mountain which overlooks Narsaq. Other risks include leakages from the tailings and toxic radioactive dust with the potential to be carried long distances by heavy arctic winds. The mine’s proximity to an occupied town and a world heritage site put at risk lives, livelihoods and irreplaceable heritage. Despite claims by the company’s assessment that dust from the Kvanefjeld operation would not cause radiation in the area, experts warn that Greenlanders should be sceptical about these claims.
Culture and tradition
In Greenland, rising temperatures have extended the growing season and expanded the production of existing crops. Though agriculture makes up a relatively small portion of Greenland’s economy, this sector of the economy has the potential to grow significantly as the climate warms up. The same can be said for animal husbandry. The southern portion of the island is home to all of Greenland’s sheep stock, where unique farming traditions of Norse Greenlandic and modern Inuit farming cultures are practised and where sheep roam as free-grazing flocks. This is because private land ownership is not practised here. All the land is controlled by local kommunes, or “municipalities”, allowing farmers to jointly agree to the terms of land usage, since Greenlanders neither own nor pay rent for the land they live on. The farms provide wool mainly for exports and meat for local consumption. The practice is especially important for Narsaq, the nearest town to the Kvanefjeld project. Rising temperatures are putting a severe strain on the island’s population of 57,000, where the Greenlandic Inuit populations (the Kalaallit, Inughuit and Tunumiit) make up around 90%. For the island, the rapid changes in temperature are causing economic insecurity and retreating ice exacerbates the threats for the Greenlandic Inuit’s traditional livelihoods, which are heavily rooted in fishing, seal and whale hunting. In addition, a history of colonisation and an expanding economic system is creating a deep cultural rift and increasing social pressures. The loss of culture and generational purpose caused by rising temperatures and a rapidly changing landscape are already causing severe mental health impacts.
The employment illusion
Even with the appeal of increased employment from the oil, gas and mining activities, the reality is that these highly technical jobs will require expertise that Greenland does not have. The vast majority of the people employed would come from other areas of the world and who may not understand the particular challenges Greenland’s residents face. Moreover, despite arguments from industry and politicians, mining projects tend to perform poorly in job creation, amounting to less than 1% of the labour force in most cases.
“We need a time-out for oil and gas extraction in Greenland and this also applies in particular to the mining industry,” says Erik Jensen from URANI NAAMIK / NO TO URANIUM Association in Nuuk.
Studies also show that the development of remote areas and the influx of workers to mining projects can often cause major socio-economic and cultural changes. The proliferation of oil, gas and mining projects in Greenland would bring increased development that could damage the already fragile social fabric. The effects of climate change combined with rapid modernisation can compromise traditional lifestyles, creating additional challenges for the island’s indigenous inhabitants.
“For years, environmental NGOs in Greenland and Denmark have criticised the Kvanefjeld project for not living up to Greenland’s environmental standards,” adds Francesca Carlsson, legal officer at the EEB. “The Aarhus Convention sets out clear processes and standards for environmental governance and public participation. It should be implemented and its principles should be guaranteed in every step of the process. These projects pose too high of a risk for the communities to not be fully involved.”
An independent Greenland
As part of the Danish Kingdom, Greenland is still under Danish influence, though with a degree of autonomy. The territory relies on an annual block grant of 3.9 billion Danish krone (around €500 million euros) from Copenhagen, which amounts to 20% of its GDP and more than half of the public budget. Greenlandic politicians are well aware of their socioeconomic hurdles. Some argue that climate change is an opportunity for a new future and view providing raw materials, oil and gas for the growing Western and Chinese economies as a means to reach economic independence. They argue that the income obtained from the resources would allow the Greenlandic government to detach itself from Denmark.
However, the cost of reaching independence through resource exploitation is high, both for Greenland and the world. Greenland would require 24 concurrent large-scale mining projects to zero out the financial support from Denmark. Paradoxically, opening up Greenland for ‘business’ would perpetuate the very same mining and industrial activities that are largely to blame for the environmental and and socioeconomic problems the island is currently facing. Greenland’s ice sheets are not melting because of the forces of nature, they are melting as a result of irresponsible human activity.
Niels Henrik Hooge from Friends of the Earth Denmark argues that: “More oil and minerals extraction is not a real prerequisite for financial autonomy. A mineral-based economy is not economically sustainable: when the mining industry starts to recede, Greenland will find itself in the same situation as before, only with fewer resources.”
As the EU updates its Arctic Policy as part of its work programme for 2021, environmental NGOs urge the Commission to truly carry out its environmental commitments and to declare the Arctic a natural sanctuary. The NGO statement also calls on the EU, Denmark and Greenland to implement a moratorium on large-scale mining and oil and gas extraction in the autonomous region and for the island to be compensated so that the immediate decrease in income would not negatively affect its population.
“The European Parliament just called on the European Commission to set binding targets to reduce resource consumption and bring it within planetary boundaries,” says Jean-Pierre Schweitzer, policy officer for the circular economy at the EEB. “We urgently need a framework for reducing our exploitation of increasingly scarce natural resources.”
It remains to be seen if policymakers in Brussels, Copenhagen and Nuuk will put words into action and push for increased protection of a vulnerable and yet pristine region of the world. After all, the challenges Greenland is facing are not just those of its people. As a climate window into the future, Greenland’s protection is a global challenge.
Mongolia’s new mining boom
Climate change and a mining boom are altering the lives and livelihoods of Mongolians.
Tsedew Zagdbazar, 46, remembers the brutal winter of 2009-2010. That year, a dzud, an increasingly frequent, harsh winter weather event in the country, wreaked havoc on Mongolia.
The 2009-2010 dzud devastated livestock in the western province of Khovd and across the country. Over one-fifth of Mongolia’s total livestock died (8.5 million animals), subsequently affecting close to a third of the Mongolian population who have sustained pastoral traditions for generations. According to the Red Cross, a quarter of a million herding families were affected: 44,000 households lost their entire livestock, and some 164,000 lost more than half.
Tsedew’s family was one of them. After losing some of his animals, he was left with the choice of salvaging his depleted livestock or selling his remaining animals and look for work elsewhere. Herders without animals have one realistic economic choice: Move to Ulaanbaatar, the only city in the country with formal work opportunities.
“Pastoralism is just not lucrative anymore,” Tsedew says.
In the past decade alone, 600,000 people have migrated to the capital largely because of harsh climate conditions, looking to build an easier and more stable life for their families. The urban-rural makeup of the country is a virtual split. Ulaanbaatar’s population is just under 1.5 million, with tens of thousands of people moving to the capital each year looking for work. Thirty percent of the country’s population still lives in poverty, increasingly in an urban environment.
Now a former herder, Tsedew is contrite about his decision to move to Ulaanbaatar. “It wasn’t what I expected and it wasn’t worth it,” he tells The Diplomat. Once herders give up their rural lives, it is virtually impossible to return to it. Many become hamstrung by high interest debt accrued in trying to set up their lives in the city.
It takes years to cultivate livestock and pastures, but only one bad winter to lose everything. Like almost all rural migrants to Ulaanbaatar, Tsedew lived in the city without his family in one of the informal ger districts ringing the city’s outskirts. These districts are not connected to formal infrastructure like plumbing, electricity, or gas making life even more challenging.
Almost concurrently, in 2010, as weather disasters created an exodus to the capital, Mongolia’s mining boom took off. After securing a long term deal with the Mongolian government, money flowed in at unprecedented levels spurred by multinational mining mammoth Rio Tinto’s investment into Oyu Tolgoi. The company manages the country’s largest copper and gold reserves.
With immense reserves of copper, coal and other minerals valued at $1-3 trillion, Mongolia became one of the fastest growing economies in the world. With growth hitting 17 percent in 2011, Mongolia banked on sustained Chinese demand. Foreign direct investment and projects connected to the mining sector poured into the country. The luxury market and other sectors such as services, property, tech, and finance also started to take off. The country was deemed “Minegolia” for its mining potential and dubbed a “frontier market.” By 2013, Mongolia had reached a GDP per capita high of $4,400.
Tsedew thought the timing was right to benefit from the mining boom himself and leave the capital. Despite the financial allure of working in the booming Oyu Tolgoi copper and gold mines or Tavan Tolgoi coal mines, the harsh and desolate desert conditions of the Gobi didn’t appeal to him. He also wanted to move closer to home. After three years spent far away from his family, Tsedew moved back west to work in the Khushuut coal mine. He counted on Mongolia’s thriving commodities boom to last.
But after three years of double digit growth driven by the mining boom (2011-2013), foreign investment and commodity prices collapsed. By 2016, the boom and growth crawling at just 1.2 percent. Things quickly went south when China’s own growth tapered, demand for commodities sank, and Mongolia’s government went on a debt-fueled spending spree. A financial crisis soon emerged.
The Mongolian tugrik freefell against the U.S. dollar by almost 80 percent between March 2013 and January 2017. Within a five year span, FDI plunged from $4.5 billion to 94 million in 2015. Mining projects were halted; investment that had boomed between 2010 and 2012 was soon followed by a major collapse in the 2013 to 2015 period.
Despite the boom and bust cycles, Tsedew’s life and livelihood remains centered around the Khushuut coal mine. Tsedew sees his new life as a compromise between living in the smog-filled capital and the harsh conditions of the Gobi. Life is not easy here either, however. Tsedew now lives with his family directly in front of the mine which operates day and night. He says he earns 1.2 million tugrik per month ($450), somewhere between double and triple the average salary in the country.
Nestled between two mountain ranges in the western Mongolian province of Khovd, trucks churn up coal dust at the Khushuut coal mine. It is one of the largest deposits in Asia of its kind. Since 2007, the Khushuut mine has been controlled by the Mongolia Energy Corporation (MEC), a Hong Kong-based company which also has projects in neighboring Chinese Xinjiang province.
According to MEC’s latest annual report in 2018, the volume of coal exported to China from Khushuut reached 36.2 million tons — the highest number ever recorded — and among that, 27.7 million tons was coking coal. The mine is estimated to have reserves amounting to 460 million tons of coking coal, one of the largest coal reserves in Asia. Coking coal is mainly used in the steel industry in China, which is what continues the surge in demand for it.
Mongolia’s coal exports rose by 15 percent in the first quarter of this year to 7.8 million tons. Much of this surge stemmed from a souring in China-Australia relations. China decided to cut back imports of coal from Australia and the time for such imports to clear customs has reportedly doubled, slowing the trade further.
Mongolia’s mining fortune is heavily determined by Chinese demand for copper and coal, which account for more than 90 percent of its exports. The outlook for commodity exporters looks promising at least into 2020 as new mining projects begin to open up in Mongolia again.
However, miners must also deal with temperatures that vary from -40 C to 40 C (-40 F to 104 F). As a result, mines tend to limit drilling programs in the Gobi to between late March and November. This puts limitations on the mining sector compared to most other mining rich regions, where excavation can continue uninterrupted year round.
The road from the village to the Chinese company is sealed and pristine. Truck drivers ply the road six to eight times per month and earn an average of 100,000 to 200,000 tugrik or $40 per trip, or $300 per month.
The new road from the mine snakes south and west. It was built by MEC and the Chinese government to link the Khushuut mine with Takeshenken on the Mongolia-China border. The road is used to transport coking coal across the border into Xinjiang province.
Although mining is relatively less developed in this region than other parts of the country (393 exploration and exploitation licenses covering almost 2.6 million hectare in November 2014), it is predicted to develop rapidly in the future. Mineral products and precious metals currently account for 23 percent of Mongolia’s overall GDP. It’s anticipated that the industry itself won’t die any time soon, even if the boom and bust cycles of the overall economy makes life uncertain for the miners.
Continuing Climate Induced Migration
According to the Green Climate Fund and Mongolia’s Institute for Meteorology, Hydrology and the Environment, the country has seen an average temperature increase of 2.2 C, more than double the global average since 1940.
According to UNDP, over 7.8 percent of Mongolia’s territory has been affected by desertification and land degradation. Khovd province in Western Mongolia has been identified as one of the most critical areas; the province has been highly affected by desertification.
Huandh, 43, and her husband Kantovat, 50, live in a small valley on the edge of Tavan Bogd National Park where China, Russia and Mongolia meet in the Altai Mountains. With their son, Tairverdi, who is now 15, they depend on stable conditions in the spring and summer months to ready their animals to make it through the winter. However, herders and communities must prepare for the worst and have little margin of error if something goes wrong.
For Huandh and her family, they don’t have the luxury of moving. They begin to prepare in September for winter. Everything that they eat and use to heat their home comes from their two camels, 30 cows, and 160 goats and sheep. If they have not properly stored enough fat for winter, they risk not surviving if the temperature plummets more than usual.
This part of the country is particularly prone to harsh weather conditions and to the dreaded dzud, which devastated Mongolia’s animal stocks in 2000, 2010, and most recently in 2017. To the relief of the remaining herders in the region, last winter was not a dzud. The adjacent province of Hovd has also been identified by UNDP as one of the most at risk regions of worsening dzuds, assessed in October or November each year.
The western cities of Olgiy and Khovd have benefited with growing populations from the uptick in mining in this part of the country. This has, however, put a strain on water and other resources in an area of Mongolia which is already at high risk of acute water shortages.
Western Mongolia has an estimated 38,000 nomadic and semi-nomadic herding families like Huand’s who rely directly on a stable and unpopulated grassland environment for their herds.
In 2017, Mongolia had to temporarily ban grain exports after nearly a third of the country suffered a severe drought and the highest temperatures in over half a century. Officials are concerned that droughts will lead to crop failures that will leave the country’s semi-nomadic herders without enough means to sustain their animals through winter. The country has prioritized the expansion of its agriculture sector as protection mechanisms from drastic changes in commodity prices.
A Changing Economy
In the last decade Mongolia has seen a substantial labor shift propelled by the mining boom from the agricultural sector to the mining, manufacturing and construction sectors. Many of those who moved to the capital have shifted from pastoral occupations to service sector or construction jobs. Others have worked seasonally in mines around the capital or in the booming southern Gobi.
More recently, since 2017, after a brief contraction linked to a harsh winter and border complications with China that stalled the movement of goods, Mongolia’s economy has partially recovered. Global commodity prices surged again, particularly in coal and copper in 2018. Although not at the double-digit growth of early 2010, the economy grew at a strong 6.9 percent in 2018 and the mining sector has continued to expand at numerous sites across the country. Resurgent Chinese demand for coal has powered growth and government revenues, pulling the landlocked economy back from the brink of a classic emerging market crisis.
According to UN Comtrade, in 2018 Mongolia’s top exports were centered around two commodities: coal briquettes worth $2.8 billion and copper ore worth $2 billion. According to the Asian Development Bank, Mongolia’s GDP is expected to grow at 6.1 percent in 2020, the highest in Asia, 0.1 percent higher than China. Mongolia’s inflation rates are forecasted at 7.5 percent in 2020, nearly three times more than Hong Kong at 2.3 and China at 2.2 percent. China’s coal imports reached 2.75 billion in 2018, according to UN Comtrade data. Coal exports generate about 35 percent of Mongolia’s total export revenues currently.
In the first quarter of 2019, year-on-year GDP growth was 8.6 percent and the inflation rate has been stable at around the target of 8 percent. According to the World Bank, Mongolia’s economy has recovered strongly since the 2016 crisis, when growth slumped to 1.2 percent, but underlying vulnerabilities remain. Economists warn that lurking vulnerabilities remain, particularly mineral price fluctuations or lower growth in China. Despite progress in the banking sector, continuing bank fragility poses a risk to economic health.
China accounts for the lion’s share of Mongolia’s exports. About 90 percent of Mongolia’s trade currently passes through China. According to the country’s statistics office, Mongolia’s export earnings from coal over the first three months of the year reached $644 million, up 25 percent compared to a year earlier.
Although China has weaned itself off of domestic coal production and mining, and has been building or financing hundreds of coal-fired power plants in other countries, mainly in Asia. It is still the world’s largest coal consumer, drawing more than 70 percent of its electricity from coal.
In 2018, China accounted for more than 60 percent of the world’s industrial coal consumption, but its share falls to a little more than 40 percent in 2050 because of consumption growth in other countries and China’s policies to reduce coal use in the industrial sector.
In respect to coal, according to the National Statistics Office of Mongolia, Mongolia produced a record high of 50 million tons of coal in 2018, surging 6.2 percent compared to the previous year.