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Voters deliver backlash over Greenland's minerals rush

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(Globalpost/GlobalPost)

By Alistair Scrutton

NUUK (Reuters) - Aleqa Hammond looked set to be Greenland's first female prime minister on Wednesday after winning 42 percent of votes in elections on a platform of greater control and heavier taxation of foreign mining.

The opening of the country of 57,000, which is a quarter the size of the United States, to foreign miners has sparked a backlash from its traditional Inuit people, many of whom fear both Chinese influence and environmental damage.

Hammond's Siumut party won around 14 seats in the 31-seat parliament, meaning she will need to form a coalition. Prime Minister Kuupik Kleist won around 34 percent of votes, according to official results published on Wednesday by the national KNR broadcaster.

With sea ice thawing and new shipping routes opening in the Arctic, the former Cold War ally of the West has emerged from isolation and gained geopolitical attention thanks to its untapped mineral wealth and potential offshore oil and gas.

"Thanks to my supporters," Hammond told KNR. "It was a huge relief to have won."

Hammond grew up in a remote village. Her father died when she was young after he fell through ice while hunting. She says her family tried to make her marry a hunter. She refused.

There is still a broad consensus in Greenland that foreign investment is needed to help bring in revenues and wean the self governing country off an annual grant from former colonial master Denmark that pays for more than half its budget.

Hammond wants foreign miners to pay more but will also seek to lift a ban on mining radioactive materials that has stopped some plans to develop rare earths deposits, crucial in 21st technology like smart phones.

But the result of the election highlighted how many more traditional Inuits from fishermen to seal hunters felt Kleist had embraced foreign investors too quickly. "It has been a slap in the face," Kleist told KNR after the vote.

One of the most controversial plans is a proposal for a $2.3 billion mining project by British-based London Mining Plc near Nuuk that could supply iron ore to China. Some 2,000 Chinese workers could be flown in for its construction.

Kleist, who in his youth hunted whales with a hand-held harpoon, has been feted by Chinese and EU officials vying for influence.

The government passed a law that critics said allowed large companies to bring in cheap labour to work on construction projects. Hammond has promised to revise the law.

Hammond has also said she wants to levy royalties on companies when they come to Greenland. Kleist wants to tax companies only when they start making profits.

GLOBALISING GREENLAND

The capital, Nuuk, now has an art cinema, sushi bars, Thai restaurants and gleaming new office towers alongside older, grey Soviet-style housing estates and an old port where hunters bring in seals for skinning.

Changes are coming fast. Ice floes often are so thin that hunters can no longer use dog sledges and many Inuits fear miners exploiting Greenland's resources may employ more foreigners than locals.

"This government talks too much about mining and not enough about fishermen," said Job Heilmann, a 48-year-old who hunts for seal and reindeer and fishes for halibut, after he voted on Tuesday. He complained about fish quotas, poor market access for seal skins and restrictions over harpoon guns for whale hunting.

"The central issue here is who will run the country?" Hammond told Reuters on Tuesday before she voted. "People feel that it is foreign companies who have too much say here."

JUST TWO TRAFFIC LIGHTS

The capital of 15,000 people overlooks a bay where whales can often be spotted. There are just two traffic lights and no roads or train links with the rest of the country - the only way in or out is by plane or boat.

But its very smallness may make it open to influence from big powers. EU officials have expressed concern about China's influence in Greenland, part of what some analysts say is a multi-pronged Arctic strategy by Beijing to secure resources.

The election result may be a boost for companies seeking to end China's dominance of rare earths deposits, which are often intertwined with uranium deposits.

Kleist had refused to jettison its zero tolerance policy on mining radioactive materials, which originates in Denmark. Hammond has said she would lift it.

One rare earth deposit in southern Greenland, being explored by Australian-owned Greenland Minerals and Energy, could be one of the largest such mines outside of China.

(Editing by Patrick Graham)

http://www.globalpost.com/dispatch/news/thomson-reuters/130315/voters-deliver-backlash-over-greenlands-minerals-rush