Slide 1

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Perspectives from Greenland –Achievements and challenges

Slide 2

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”The Committee for Greenlandic mineral resources to the benefit of society”

• A collaboration between UCPH and Ilisimatusarfik, University of Greenland

• A 360 degrees analysis on how Greenland (and Denmark) can benefit from extraction of natural resources

• 13 researchers

• A cross-disciplinary project: Law, biology, sociology, geology, Asian studies, Security studies, economics, history.

• 450 pages of peer reviewed background papers

• The report – in Danish, English and Greenlandic – ”To the benefit of Greenland”

Slide 3

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The task - given by the rectors

•Analyse the practical potential for extraction of mineral resources…”

•….how does this potential relate to the scope of any potential extraction projects defined by investment requirements, labour requirements during construction, mining and closure phases as well as the life cycle and environmental impacts….”

•”How exploitation of natural resources can create value in Greenland and Denmark…”

Slide 4

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A good point of departure

Proven and well described reserves of great potential

Adequate and well developed legislation

General political stability

Good ranking among mining companies

Strong marketing efforts

Slide 5

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Note: Excl. interest payments. GDP estimated in 2012. Forecast from sustainability model with 1 per cent productivity growth. Source: Statistics Greenland, Economic Council of Greenland.

BUT a challenged economy – foreign investments are necessary

= 800 mio. dkk per year

Slide 6

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And Asia is still hesitant…

Slide 7

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10 main challenges and barriers

1. A small population = 56.000 - and labour force = 25.000 - not sufficiently educated

2. A small and challenged economy causes need for foreign investment

3. Lack of resources in administration. Bottle neck problems

4. Infrastructure is lacking and large investments are needed

5. Global market trends > commodity prices dropping after anomalous

high

6. Reluctance towards Danish ”interference”7. Profits are smaller than expected and the potential has been

exaggerated

8. Citizens are feeling excluded from the processes 9. Risk of jeopardizing renewable resources and marginalizing Greenlandic

population if extraction projects are introduced too quickly

10.The need for a ressource wealth fund

Slide 8

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Naalakkersuisut has launched a strategy

Naalakkersuisuts Oil and Mineral strategy:-> 3-5 mines before 2018 -> 1 or 2 offshore oil drillings every second year

”To the benefit of Greenland”:-> Maximum 1 mine before 2018 Oil

production might be possible in 20-50 years

Slide 9

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The Greenlandic dilemma Close correlation between level of activity and import of workforce and government revenue. Independence based on revenue from mining could jeopardize independence for the present population – infrastructure would belong to foreign investors

Slide 10

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Requires launch of new large project every other year until 2040

Scenario 3 – full speed and building up a wealth fund

Very small reduction in block grant

Quick rise in profits – Quick reduction when ”low hanging fruits” exploited

Increase in revenue only until 2027

Yield on interest of about 5 % may be used every year

Quick increase need for international labour

Slide 11

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Scenario 4 – multi-pronged strategy

Max. 5 projects in total launched in special zones in the course of

20 years

Wealth fund

Very small reduction in block grant

Increase in revenue only until 2027

Yield on interest of about 5 % may be used every year

In the course of 10 years the revenue from fund and in increase in public spending willbalance

Build up new sources of income

Slide 12

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What happens next?

• Small steps have been taken in order to reachout to DK for investment

• A strategy for industry-development on the way

• But also necessary to self-evaluate administrationand transparency issues

> need to turn the procesand start with citizen and introducing industry and nature

• preservation zones

Slide 13

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Slide 14

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Slide 15

For at ændre ”Enhedens navn” og ”Sted og dato”:

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