Greenland Resources has obtained a 30-year exploitation permit from the Greenland government for molybdenum and magnesium extraction at the Malmbjerg project, situated in the autonomous Danish territory.
The licence to the Canadian publicly-listed firm was granted by Greenland’s Minister for Business, Mineral Resources, Energy, Justice, and Gender Equality, Naaja H. Nathanielsen.
The Malmbjerg project is located in central eastern Greenland. The permit allows the extraction of molybdenum and magnesium, with potential for extension up to 50 years.
Nathanielsen said: “The exploitation permit to Greenland Resources comes shortly after they have entered into a 10-year offtake agreement with some of the largest steel companies in Europe. It is a sign of confidence in our mining industry in general, but also in Greenland Resources and their project.”
Greenland Resources intends to meet any remaining prerequisites following the permit issuance. Mining is required to commence by 31 December 2028, unless an extension is granted.
The company, which is regulated by the Ontario Securities Commission, aims to cater primarily to the European Union (EU) market.
The Malmbjerg project, characterised by its environmentally conscious mine design, targets minimal water usage and low ecological impact.
A feasibility study by Tetra Tech in 2022 estimated a capital expenditure of $820m, projecting a 33.8% levered after-tax internal rate of return and a payback period of 2.4 years at an assumed molybdenum price of $18 per pound.
The project’s proven and probable reserves stand at 245 million tonnes, containing approximately 571 million pounds of molybdenum metal.
The initial decade of operations is expected to yield an average annual production of 32.8 million pounds of molybdenum metal, meeting approximately 25% of the EU’s annual consumption and fulfilling all its defence requirements.
Greenland Resources is exploring methods to extract magnesium from saline water used in the project and aims to integrate magnesium into its feasibility study economics.
Greenland Resources board executive chairman Ruben Shiffman said: “Malmbjerg has the potential to generate close to $1bn in taxes during the 20-year life of the mine (according to our NI 43-101 Feasibility Study), can create critical infrastructure on the east coast, and provide people with new life skills.
“The project comes at a time of deglobalisation and significant growth in defence expenditures. It will be able to supply around 25% of all EU molybdenum needs and 100% of defence applications (more than 80% of the metallic materials for defence require molybdenum).”
Last month, Greenland Resources signed a memorandum of understanding with Cogne Acciai Speciali, an Italian firm engaged in the special steel sector. Although non-binding, this MOU outlines plans for a long-term supply arrangement for Ferromolybdenum and Mo-oxide.
These materials will be extracted in Greenland and processed in Belgium, ensuring a stable supply with high sustainability standards and low emissions from an EU associate nation.
