China will operate its first Arctic resources project when a Chinese mining company takes over a planned US$2 billion iron ore mine in Greenland.
General Nice, one of China’s largest coal and iron ore importers, will run the Isua mine project after a move to put its previous owner, London Mining, into administration, the Financial Times reported Monday, citing the Greenland government.
However, the involvement of a Chinese investor could raise alarms across the Arctic and in the United, which remains wary of China’s Arctic ambitions.
Plans by a Chinese property developer to buy a large but remote tract of land in Iceland several years ago prompted great unease among Arctic diplomats.
Chinese groups are already active in the Arctic. Some are helping to fund and build Russia’s Yamal liquefied natural gas project, a venture in which oil company CNPC has a minority stake, the report said.
CNOOC, another Chinese oil company, has a license with a local partner to explore for oil off the coast of Iceland.
Rising temperatures have made parts of the Arctic more accessible, raising China’s interest in oil and mineral projects there and the possibility of a sea route to Europe over the top of Russia.
In 2013, China also became a permanent observer at the Arctic Council, the decision-making body for the region.
For Greenland and its government, the Isua project is an important part of a plan to exploit mineral wealth and secure full independence from Denmark.
But there are still doubts over the viability of the project.
London Mining estimated last year that operating costs would be US$45 per ton while shipping to China would cost an extra US$37 per ton.
However, iron ore prices are now only US$70 per ton, having halved last year as miners ramped up output and demand from China fell.
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