Mining industry

Standing

What is the nature and importance of the mining industry in your country?

At present, there are six exploitation licences in Greenland: a gold mine in south Greenland, an iron ore deposit, a gemstone deposit, a lead and zinc mine, an anorthosite mine in west Greenland, and a lead and zinc mine in northern Greenland for which licences covering iron, gem stones, anorthosite and one of the lead and zinc mines were granted in 2013, 2014, 2015 and 2016.

At the moment, only the gemstone and anorthosite mine has started production. Generally, mineral exploration activity has increased in the past 10 years since the world mining community has become more aware of Greenland’s mineral potential. It is therefore expected that new mines will be opened in the coming years and that the mining industry will become more important to Greenland.

Target minerals

What are the target minerals?

The target minerals of the current mining and exploration projects are ilmenite, molybdenum, coloured corundum (ruby and pink sapphires), eudialyte (zirconium and rare-earth elements), diamonds, iron, lead, zinc nickel and gold. There has been no increased interest in minerals used in battery technology or renewable energy.

Regions

Which regions are most active?

The regions of south-west and west Greenland are the most active regions.

Legal and regulatory structure

Basis of legal system

Is the legal system civil or common law-based?

The legal system in Greenland is a civil law system primarily based on written legislation. Greenland is part of Denmark and is subject to the Danish Constitution, but since 1979 Greenland has had an independent status within the Danish state by the implementation of the Greenland Home Rule Act.

Greenland and Denmark have, by referendum, passed the Law on Greenlandic Autonomous government, which came into force on 21 June 2009. This means that Greenland can take over the administration of most areas, without becoming an independent state.

The Danish government administers matters such as foreign and defence policy, policing, courts and finance. Greenland’s government is responsible for all other areas of legislation, including legislation concerning mineral resources, which Greenland took over shortly after the implementation of autonomous government.

Regulation

How is the mining industry regulated?

The mining industry in Greenland is regulated by an act passed by the Greenlandic Parliament in December 2009. Before the implementation of this act, mineral resources were regulated by a joint Greenlandic-Danish administration. Greenland now has full authority to make decisions regarding principal investments in mineral resource activities, including the granting of licences.

The rules and precedents applicable until 1 January 2010 - when the new act became effective - are generally continued under the new act. However, a number of important new rules have been introduced.

What are the principal laws that regulate the mining industry? What are the principal regulatory bodies that administer those laws? Were there any major amendments in the past year?

The principal law regulating the mining industry in Greenland is the Greenland Parliament Act of 7 December 2009 on mineral resources and mineral resource activities (the Mineral Resources Act). Amendments to the Mineral Resources Act were passed by the Greenlandic parliament in 2012, 2014, 2015 and 2016. In addition, the Greenlandic government issued new and updated Standard Terms for Exploration Licences for Minerals (Excluding Hydrocarbons) in Greenland on 25 June 2013 containing fixed terms applying to all granted licences, which are still valid. Further, an addendum to the Standard Terms specifically concerning payment of royalties was adopted on 1 July 2014.

The administration regarding mineral resources in Greenland is handled by the Mineral Licence and Safety Authority (MLSA) under Greenlandic autonomous government authorities. One of the main tasks of the MLSA is the day-to-day administration of licences within the area of mineral resources, as well as being responsible for technical and geological matters. As of 1 January 2013, the MLSA is no longer responsible for environmental matters; decisions concerning the environment are now made by the Environmental Agency for the Mineral Resources Area. Further, as of 1 February 2015, the Ministry of Industry, Labour and Trade is responsible for issues concerning industry and labour policy including social impact assessments and impact benefit agreements for mineral resources companies and similar related socio-economic matters. Further information as to procedures concerning the granting of licences and relevant legislation applying to the area of mineral resources can be found at www.govmin.gl.

There were no major amendments during 2017.

Classification system

What classification system does the mining industry use for reporting mineral resources and mineral reserves?

Article 1 of the Mineral Resources Act sets out the general overall stipulation that this act aims to ensure that activities under the act are performed in a sound manner as regards safety, health, the environment, resource exploitation and social sustainability, and appropriately and according to the best international practices under similar conditions.

In practice, this implies that the Greenlandic mining industry may use any kind of standard they want, as long as it is in accordance with good international practice.

Mining rights and title

State control over mining rights

To what extent does the state control mining rights in your jurisdiction? Can those rights be granted to private parties and to what extent will they have title to minerals in the ground? Are there large areas where the mining rights are held privately or which belong to the owner of the surface rights? Is there a separate legal regime or process for third parties to obtain mining rights in those areas?

Metallic minerals in the ground of Greenland belong to Greenland’s government, and prospecting and exploration for and exploitation of mineral resources in Greenland can only be carried out under licences granted according to the Mineral Resources Act.

However, the resident population of Greenland may carry out non-commercial collection of loose minerals without a licence being required, but only with respect to exclusive licences for exploration and exploitation of mineral resources granted to other parties.

Publicly available information and data

What information and data are publicly available to private parties that wish to engage in exploration and other mining activities? Is there an agency which collects mineral assessment reports from private parties? Must private parties file mineral assessment reports? Does the agency or the government conduct geoscience surveys, which become part of the database? Is the database available online?

The MLSA provides advice and assistance to private parties wishing to engage in activities of mineral exploration and development in Greenland.

Moreover, their English language website (www.govmin.gl) is an important means of communicating relevant information to the mining industry. On this website wide range of information is available, for example, information regarding relevant legislation, application procedures, licence terms, fieldwork, reporting and current licences.

The Geological Survey of Denmark and Greenland, situated in Denmark, provides a wide range of geoscientific information, which can be obtained from their website (www.geus.dk).

Acquisition of rights by private parties

What mining rights may private parties acquire? How are these acquired? What obligations does the rights holder have? If exploration or reconnaissance licences are granted, does such tenure give the holder an automatic or preferential right to acquire a mining licence? What are the requirements to convert to a mining licence?

A licence issued according to the Mineral Resources Act will cover all mineral resources except hydrocarbons, radioactive elements and hydropower, unless otherwise stipulated in the licence.

Prospecting licence

A prospecting licence is non-exclusive, meaning that the granting of such a licence does not preclude the granting of similar licences to other parties and the licence lapses to the extent that exclusive licences may be granted later as regards the area and the resources in question. Further, the licensee has no right prior to other parties when applying for an exclusive exploration licence as regards the area and the resources in question.

The licensee will have no commitments and may surrender the licence at any time with written notice to the MLSA. However, under certain conditions, expenditure made under a prospecting licence may, within three years from the calendar year in which the expenditure was made, qualify as fulfilment of the exploration obligations for one or more exploration licences.

 

Exploration licence

Applications for an exploration licence shall be submitted to the MLSA, which registers the applications in either batch A (dating between the first and 15th of the month) or batch B (dating between the 16th and the last day of the month).

If the case of competing applications (applications within the same batch and with overlapping licence areas), the Greenlandic government will make a discretionary decision concerning the granting of the licence.

An exploration licence is exclusive, precluding the granting of a similar licence in the same area to other parties. The exploration licence is granted for a period of five years and at the expiry of the first licence period the licensee is entitled to be granted a new licence for the same area for five years. Pursuant to the Standard Terms, at the expiry of the second licence period (years six to 10), the licensee may be granted additional new three-year licences for years 11-13, 14-16, 17-19 and 20-22 for the same area, wholly or partly, provided the terms of the licence have been complied with. However, the licensee is not entitled to have such licences granted.

During the licence period the licensee is obliged to spend a fixed minimum of exploration expenses per calendar year calculated as the sum of an amount per licence per year and an amount per square kilometre per year.

 

Exploitation licence

If a licence holder of an exclusive exploration licence has found and delineated a commercially viable deposit that the licensee intends to exploit and provided the terms of the licence have been complied with, the licensee is entitled to be granted an exploitation licence.

An exploitation licence regarding mineral resources will, as a main rule, only be granted to limited companies domiciled in Greenland, exclusively carrying out activities under the granted licences and not being taxed together with other companies. It is required that such companies may not be more thinly capitalised than the group of which the company forms part, but the company’s loan capital must always exceed the shareholders’ equity up to a ratio of 2:1. The licensee shall, further, have the necessary expert knowledge and adequate financial background with respect to the exploitation activities in question. The licence is granted for 30 years.

Following the granting of an exploitation licence and prior to commencement of development and production, the licensee must submit a development plan (including a closure plan) for MLSA approval and an environmental impact assessment. Further, the Mineral Resources Act stipulates that if an activity is assumed to have a significant impact on social conditions, a licence for the activity can be granted only when a social sustainability assessment has been approved by the MLSA. Finally, it is determined in the licence to what extent the licensee is obliged to enter into an impact benefit agreement imposing obligations for the licensee regarding the use of Greenlandic labour and enterprises and also regarding the education of Greenlandic labour.

Renewal and transfer of mineral licences

What is the regime for the renewal and transfer of mineral licences?

See question 10. Any direct or indirect transfer of a licence to a third party requires approval by the Greenlandic government. Indirect transfer means any transfer of ownership interests that will affect the controlling interest of the licensee.

Duration of mining rights

What is the typical duration of mining rights?

The exploration licence is granted for a period of five years and at the expiry of the first licence period the licensee is entitled to be granted a new licence for the same area for five years. Pursuant to the Standard Terms, at the expiry of the second licence period (years six-10), the licensee may be granted additional new three-year licences for years 11-13, 14-16, 17-19 and 20-22 for the same area, wholly or partly, provided the terms of the licence have been complied with. However, the licensee is not entitled to have such licences granted.

The exploitation licence is granted for 30 years. The period for exploitation may be extended if warranted by special circumstances, however, the total period cannot exceed 50 years.

A licence may be revoked in the following situations:

  • if the licensee breaches the terms of the licence or the provisions laid down pursuant to the Mineral Resources Act or pursuant to the licence, or if the licensee fails to meet specified time-limits;
  • if the licensee acts fraudulently while submitting information to the MLSA; or
  • if one or more of the parties participating in the licence goes into liquidation or is declared bankrupt.

Acquisition by domestic parties versus acquisition by foreign parties

Is there any distinction in law or practice between the mining rights that may be acquired by domestic parties and those that may be acquired by foreign parties?

There is no distinction between mining rights that may be acquired by domestic and foreign parties, except regarding exploitation licences, which can only be granted to limited companies domiciled in Greenland.

Protection of mining rights

How are mining rights protected? Are foreign arbitration awards in respect of domestic mining disputes freely enforceable in your jurisdiction?

Decisions, which according to stipulations of the licence depend on the judgment or resolve of the minister for Mineral Resources or the MLSA, are not subject to arbitration. This stipulation does not exclude ordinary reviews by the courts.

In any other case, disputes arising between the Greenlandic government and the licensee regarding questions concerning the licence will be decided upon by a board of arbitration.

Concerning enforcement of foreign arbitration awards, the New York Convention applies.

Surface rights

What types of surface rights may mining rights holders request and acquire? How are these rights acquired? Can surface rights holders oppose these requests?

In Greenland, ownership to land cannot be obtained, as all land is owned by the society. However, persons or companies, on application, can obtain a right to use a piece of land for a defined purpose, for example, the construction of a building. When obtaining an exclusive exploration and exploitation licence, the licensee acquires the right to explore and exploit the minerals under the conditions of the licence terms for the area covered by the licence.

Participation of government and state agencies

Does the government or do state agencies have the right to participate in mining projects? Is there a local listing requirement for the project company?

As a main rule the government or state agencies do not have the right to participate in mining projects. However, according to section 17(2) of the Mineral Resources Act, a licence may prescribe that a company controlled by the Greenlandic autonomous government will be entitled on specified terms to join as a participant in the activities covered by the licence.

An exploitation licence regarding mineral resources will, as a main rule, only be granted to limited companies domiciled in Greenland, exclusively carrying out activities under the granted licences and not being taxed together with other companies.

Government expropriation of licences

Are there provisions in law dealing with government expropriation of licences? What are the compensation provisions?

Expropriation is defined as the government taking over private property without the owner’s consent.

According to section 73 of the Constitution of the Kingdom of Denmark Act, which also applies in Greenland, the legislature is authorised to make regulation on expropriation within the framework hereof.

Expropriation is only possible if the legislation complies with the following conditions:

  • that the owner of the property being expropriated is fully compensated;
  • that the alienation is motivated by the interests of the public good; and
  • that the restraint is authorised by said act.

Protected areas

Are any areas designated as protected areas within your jurisdiction and which are off-limits or specially regulated?

There are currently 12 protected areas in Greenland. The areas each have their own history and serve to protect unique landscapes or wildlife habitats, the most notable being the Ilulissat ice fiord, which is included on the United Nations Educational, Scientific and Cultural Organization’s World Heritage list. Further information about the areas in question can be obtained by contacting the MLSA or the Ministry of Nature, Environment and Energy.

Duties, royalties and taxes

Duties, royalties and taxes payable by private parties

What duties, royalties and taxes are payable by private parties carrying on mining activities? Are these revenue-based or profit-based?

The right to perform mining activities is based on an exploitation licence issued by Greenland’s autonomous government. Unless otherwise stated in the exploration licence preceding the exploitation licence, the economic terms of an exploitation licence will be as follows:

  • taxation according to Greenlandic legislation shall be in force at any time;
  • payment of a fee of 100,000 Danish kroner to the MLSA at the granting of an exploitation licence; and
  • reimbursement of the MLSA’s expenses regarding regulation of the licensee’s activities.

 

In March 2013, a new Greenlandic government was elected and the ruling parties’ coalition agreement stated that royalty payments would be introduced to the mining industry. In January 2014, the government presented a proposal for an oil and mineral strategy for 2014-18, which contains a recommendation to introduce a royalty model based on a combination of revenue and profit depending on the specific type of mineral and with a possibility of deducting corporate and dividend tax within the calculated royalty.

As a result, the Greenlandic government has, as per 1 July 2014, adopted an addendum to The Standard Terms for Exploration Licences for Minerals (excluding hydrocarbons) in the country regarding terms on the licensee’s payment of royalty when the licensee is granted an exploitation licence.

The royalty elements are differentiated for the various types of minerals, and the main terms on royalty are as follows:

  • a licensee exploiting minerals, other than rare earth elements, uranium and gemstones, shall pay a sales royalty of 2.5 per cent of the value of minerals (the licensee may on certain terms offset an amount equal to paid corporate income tax and corporate dividend tax against sales royalties to be paid);
  • a licensee exploiting rare earth elements shall pay a sales royalty of 5 per cent of the value of the elements (the licensee may on certain terms offset an amount equal to paid corporate income tax and corporate dividend tax against sales royalties to be paid);
  • a licensee exploiting uranium shall pay a sales royalty of 5 per cent of the value of the uranium (the licensee may not offset any amount related to paid corporate income tax or corporate dividend tax against sales royalties to be paid); and
  • a licensee exploiting gemstones shall pay a sales royalty of 5.5 per cent of the value of the gemstones and a surplus royalty of 15 per cent based on gross profit exceeding 40 per cent (the licensee may not offset any amount related to paid corporate income tax or corporate dividend tax against sales royalties or surplus royalties to be paid).

 

The more specific terms on royalty for different types of minerals are stated in appendices 1-4 to the addendum to the Standard Terms.

The addendum came into force on 1 July 2014, and it applies to the following licences:

  • a licence for exploration for minerals (excluding hydrocarbons) in Greenland if the licence is granted on 1 July 2014 or later;
  • a licence for exploration for minerals (excluding hydrocarbons) in Greenland if the licence is granted earlier than 1 July 2014 and it follows from the licence, including any addendum or any other amendment to the licence, that the Greenlandic government may set terms on the licensee’s payment of royalties or consideration, including royalties in an exploitation licence granted on the basis of the exploration licence; and
  • a licence for exploration for minerals (excluding hydrocarbons) in Greenland if the licence is granted earlier than 1 July 2014 and the Greenlandic government and the licensee agree that this addendum shall apply to the licence.

 

This means that the Greenlandic government cannot lay down terms on royalties when granting an exploitation licence on the basis of an exploration licence granted earlier than 1 July 2014, provided that the original exploration licence has not been amended or does not include any addenda or other terms on royalties in the second point above. However, the last two exploitation licences that were granted in October 2013 and March 2014 include an agreement between the government and the licensees on the payment of royalties.

Tax advantages and incentives

What tax advantages and incentives are available to private parties carrying on mining activities?

For companies carrying on mining activities, corporate taxation amounts to 30 per cent whereas the corporate taxation of other companies is 31.8 per cent. The tax on dividends for companies carrying out mining activity is 36 per cent regardless of the municipality in which the company is situated, as opposed to other companies that pay a tax on dividends of 42 per cent to 44 per cent, depending on their home municipality. Finally, companies carrying on mining activities can bring deficits forward without time limits where other companies have a time limit of five years.

Tax stablisation

Does any legislation provide for tax stabilisation or are there tax stabilisation agreements in force?

No.

Carried interest

Is the government entitled to a carried interest, or a free carried interest in mining projects?

As a rule, the government is not entitled to a free carried interest in mining projects. However, according to section 17(2) of the Mineral Resources Act, a licence may prescribe that a company controlled by the Greenlandic autonomous government will be entitled on specified terms to join as a participant in the activities covered by the licence.

Transfer taxes and capital gains

Are there any transfer taxes or capital gains imposed regarding the transfer of licences?

Capital gains on the transfer of licences are included in the calculation of the corporate taxable income.

Distinction between domestic parties and foreign parties

Is there any distinction between the duties, royalties and taxes payable by domestic parties and those payable by foreign parties?

There is no distinction between the duties, royalties and taxes payable by domestic licence holders and those payable by foreign parties. However, there is an obligation to withhold tax related to royalties paid by a domestic company to a foreign beneficiary.

Business structures

Principal business structures

What are the principal business structures used by private parties carrying on mining activities?

Exploration licences can be issued to any legal entity based in or outside Greenland. However, an exploitation licence that forms the basis of the right to carry out mining activities will, as a general rule, only be granted to limited companies domiciled in Greenland exclusively carrying out activities under the granted licences and not being taxed together with other companies (see question 10). These rules apply no matter whether the lender is a company within the same group or not, and whether such companies are domiciled in Greenland or abroad. Also, companies holding exploitation licences are generally required to trade at arm’s-length prices and on arm’s-length terms.

Local entity requirement

Is there a requirement that a local entity be a party to the transaction?

See question 25.

Bilateral investment and tax treaties

Are there jurisdictions with favourable bilateral investment treaties or tax treaties with your jurisdiction through which foreign entities will commonly structure their operations in your jurisdiction?

Greenland has tax treaties with Denmark, the Faroe Islands, Iceland and Norway. Under certain circumstances it might be relevant for foreign entities established in these countries to structure their operations in Greenland, but this will depend on the specific circumstances.

Financing

Principal sources of financing

What are the principal sources of financing available to private parties carrying on mining activities? What role does the domestic public securities market play in financing the mining industry?

The principal sources of financing available to private parties carrying on mining activities consist of equity raised on the international markets. There is no domestic public securities market in Greenland.

Direct financing from government or major pension funds

Does the government, its agencies or major pension funds provide direct financing to mining projects?

No.

Security regime

Please describe the regime for taking security over mining interests.

According to section 88(2) of the Mineral Resources Act, a licence under this act cannot be attached by creditors and no systems for perfection of security in mineral licences exist under the laws of Greenland.

As an alternative, provisions stipulating that the licensee be obliged to transfer its mining interests to a lender in the case of default may be considered. In respect of prior approval of transfers in connection with financing, guidance may be found in the principles stipulated in article 23.03 of the Model Licence for Exploration and Production of Hydrocarbons of September 2014.

If a lender financing the licensee’s development and exploitation of hydrocarbons stipulates as a condition for granting the loan that this Licence or any part hereof shall be transferable to such lender at a later date, the MLSA may, in accordance with section 27 (now section 88) of the Mineral Resources Act, grant its prior approval of such transfer subject to specific conditions, without any amendments to the terms of this licence.

Notwithstanding such prior approval, it should be noted that if and when the lender wishes to execute its right to a transfer of the mining interests, an approval of an eligible nominee is to be obtained again in accordance with section 88(1).

Restrictions

Importation restrictions

What restrictions are imposed on the importation of machinery and equipment or services required in connection with exploration and extraction?

Some types of vehicles are subject to import duty. Otherwise, we are not aware of any restrictions or limitations on the importation of machinery and equipment or services required in connection with mining activities in Greenland.

Standard conditions and agreements

Which standard conditions and agreements covering equipment supplies are used in your jurisdiction?

No standards are used on equipment supplies. The market is neither friendly to the supplier or buyer, as agreements are based on negotiation between the parties. The parties are free to agree on whether disputes are referred to arbitration or to the court.

Mineral restrictions

What restrictions are imposed on the processing, export or sale of minerals? Are there any export quotas, licensing or other mechanisms that prevent producers from freely exporting their production?

According to the Mineral Resources Act the licensee must use Greenlandic enterprises for contracts, supplies and services unless Greenlandic enterprises are not technically or commercially competitive. Also, it is possible when granting a licence to lay down the extent to which the licensee must process exploited mineral resources in Greenland. However, minerals may be processed outside Greenland if processing in Greenland would result in significantly higher costs or greater inconvenience.

Further, it may be stipulated in a licence the percentage of exploited minerals the licensee must keep in Greenland for the purpose of sale to persons with permanent residence in Greenland who intend to process the minerals in Greenland.

Import of funds restrictions

What restrictions are imposed on the import of funds for exploration and extraction or the use of the proceeds from the export or sale of minerals?

We are not aware of any restrictions or limitation on the import of funds for mining activities or the use of the proceeds from the export or sale of metallic minerals. There are no restrictions on foreign investments in Greenland.

Environment

Principal applicable environmental laws

What are the principal environmental laws applicable to the mining industry? What are the principal regulatory bodies that administer those laws?

The relevant environmental, health and safety laws applying to the mining industry are as follows:

  • a general environmental protection law;
  • explosives regulations;
  • technical regulations for flammable liquids;
  • the Greenland Building Regulations; and
  • the Law on Archaeological Sites and Artefacts.

 

Greenland has a ‘one-door’ system administering the country’s mineral resources, handled by the MLSA as the authoritative body for all administration. Thus, the mineral resources industry only has to apply to the MLSA to obtain the necessary permissions, ensuring efficient administration of mineral resources.

Environmental review and permitting process

What is the environmental review and permitting process for a mining project? How long does it normally take to obtain the necessary permits?

The Mineral Resources Act contains principles and rules for the protection of the environment and social sustainability. By the application and administration of the provisions on protection of the environment, including prevention, reduction and control of pollution, great emphasis is placed on what is obtainable by use of the ‘best available techniques’ for the activities.

Also, specific rules on climate and nature protection have been laid down. The Greenlandic government may issue specific regulations on climate and nature protection, including provisions on the application of national or international rules and agreements or guidelines concerning climate and environmental protection.

Prior to commencement of exploitation and development activities, a plan for the activities, including organisation of the production and the production installations, must be approved by the Greenlandic government. In this connection an environmental impact assessment (EIA) report must be prepared. The purpose of an EIA is to identify, predict and communicate potential environmental impacts of a proposed mining project in all its phases from before the commencement of mining to after closure, and to propose measures to address and mitigate these impacts.

If an activity must be assumed to have significant impact on social conditions, a licence for and approval of the activity can be granted only when a social sustainability assessment (SSA) has been made of the performance of the activity and approved by the Greenlandic government. The SSA report must appropriately demonstrate, describe and assess the direct and indirect impacts of the activity on social conditions as well as the interaction between the conditions, mutual impact between the conditions and cumulative effects on the conditions.

Provided that the licensee submits all relevant information with the application for an exploitation licence, it should not take more than approximately three to six months to obtain the necessary permits. However, there are no rules guaranteeing a maximum processing time.

Closure and remediation process

What is the closure and remediation process for a mining project? What performance bonds, guarantees and other financial assurances are required?

The licensee shall, within 12 months from the termination of the activities under the licence, remove all installations, buildings, stored items, etc, in the area that has been established for the activities under the licence, except when the non-removal of these installations has been approved by the MLSA. Further, the licensee shall carry out final clean-up activities in the affected area and remedy any remaining damage to the terrain and vegetation caused by the activities.

If the licensee does not comply with the obligations at the termination of the activities such measures may be carried out at the licensee’s expense and risk.

The MLSA may request that the licensee provides security for the fulfilment of their obligations at termination of the activities. In practice, security for the estimated closure costs is almost always required prior to commencement of development and production.

Restrictions on building tailings or waste dams

What are the restrictions for building tailings or waste dams?

Terms and restrictions for building tailings and waste dams are laid down directly in the licence inclusive of the exploitation plan, closure plans and other plans that are approved by the government, and as such there are no detailed rules in legislation in this respect.

Health & safety, and labour issues

Principal health and safety, and labour laws

What are the principal health and safety, and labour laws applicable to the mining industry? What are the principal regulatory bodies that administer those laws?

The relevant health and safety law applying to the mining industry is the Law on Labour and Working Environment.

With regard to labour laws, the Salaried Employees Act and the provisions of the Holiday Act apply to the mining industry.

Management and recycling of mining waste

What are the rules related to management and recycling of mining waste products? Who has title and the right to explore and exploit mining waste products in tailings ponds and waste piles?

According to section 51 of the Mineral Resources Act, the rules on environmental protection aim to help protect nature and the environment so that society can develop on a sustainable basis. Specifically, the aim - among other things - is to promote recycling and limit problems in relation to the disposal of waste.

In connection with meeting the obligations concerning the protection of the environment the party concerned must ensure and promote the use of the best available techniques, including less-polluting facilities, machinery, equipment, processes, technologies, raw materials, substances and materials and the best possible measures for pollution abatement of, insofar as this is technically, practically and financially possible for the party concerned.

When issuing the specific licence provisions are laid down to ensure that the aim and obligations are achieved in the best possible way considering the concrete circumstances of the project.

Use of domestic and foreign employees

What restrictions and limitations are imposed on the use of domestic and foreign employees in connection with mining activities?

According to the Mineral Resources Act and the standard terms of the licences, the licensee shall employ Greenlandic manpower as far as possible. Where there is a lack of Greenlandic manpower with appropriate qualifications, the licensee may employ personnel from other countries.

Moreover, according to the Aliens Act, residence and work permits can be issued to foreign nationals allowing them to live and work in Greenland for a specified period of time if there is no one in Greenland who can perform a specific function. Also, salary and employment conditions must correspond to Greenlandic standards. Residence and work permits are not required of Danish citizens or citizens from the other Nordic countries (Finland, Iceland, Norway and Sweden). Residence and work permits are issued by the Danish Immigration Service. Note that there are some exceptions from the requirement of residence and work permit in relation to personnel carrying out activities falling within the scope of the Mineral Resources Act.

The Large-Scale Projects Act came into force on 1 January 2013. When certain conditions are fulfilled, it is possible that, for example, a large-scale mining project, during the construction phase, can use foreign labour on terms that are favourable to the employer, which means that the above-mentioned requirement of employment conditions corresponding to Greenlandic standards does not apply if the project is defined under the Large Scale Projects Act. However, according to this act, the employer must ensure that the foreign employees have pay and employment terms that are acceptable and objectively and factually justified.

 

Social and community issues

Community engagement and CSR

What are the principal community engagement or CSR laws applicable to the mining industry? What are the principal regulatory bodies that administer those laws?

There is no such legislation directly regulating these issues. However, the process of preparing a social sustainability assessment is characterised by having a high degree of public participation. The aim is that all relevant stakeholders shall be heard in the process. Also, the impact benefit agreement that is negotiated between the licensee, the relevant municipalities and the government aims to ensure the social commitment through the lifetime of the project from the parties involved.

Rights of aboriginal, indigenous or disadvantaged peoples

How do the rights of aboriginal, indigenous or currently or previously disadvantaged peoples affect the acquisition or exercise of mining rights?

According to article 45 of the Mineral Resources Act, the resident population of Greenland may exercise their traditional right to collect and extract mineral resources without requiring a licence under the Mineral Resources Act. However, the right to collect and extract mineral resources can only be exercised in respect of exclusive licences for exploration and exploitation of mineral resources granted to others under the Mineral Resources Act.

International law

What international treaties, conventions or protocols relating to CSR issues are applicable in your jurisdiction?

With the exception of some ILO conventions, we are not aware of any international treaties, conventions or protocols relating to corporate social responsibility issues applying to the mining industry in Greenland.

Anti-bribery and corrupt practices

Local legislation

Describe any local legislation governing anti-bribery and corrupt practices.

There are rules in the Greenlandic Criminal Code against bribery, abuse of public authority and criminal breach of trust.

Foreign legislation

Do companies in your country pay particular attention to any foreign legislation governing anti-bribery and foreign corrupt practices in your jurisdiction?

The UK Bribery Act 2010 has an indirect impact on Greenlandic companies carrying out business related to the United Kingdom.

Disclosure of payments by resource companies

Has your jurisdiction enacted legislation or adopted international best practices regarding disclosure of payments by resource companies to government entities in accordance with the Extractive Industries Transparency Initiative (EITI) Standard?

Greenland is a supportive member of the EITI.

Foreign investment

Foreign ownership restrictions

Are there any foreign ownership restrictions in your jurisdiction relevant to the mining industry?

We are not aware of any foreign ownership restrictions relevant to the mining industry in Greenland.

International treaties

Applicable international treaties

What international treaties apply to the mining industry or an investment in the mining industry?

We are not aware of any international treaties applying to the mining industry or an investment in the mining industry in Greenland.