Large Scale Projects in the Arctic

175 Pages·2014·2.63 MB·English

University of Akureyri
School of Humanities and Social Science,
Faculty of Law
Master‟s Program in Polar Law

Large Scale Projects in the Arctic:
Socio-economic impacts of mining in Greenland

Monika Margrét Stefánsdóttir
June 2014

University of Akureyri
School of Humanities and Social Science, Faculty of Law
Master‟s Program in Polar Law

Large Scale Projects in the Arctic:
Socio-economic impacts of mining in Greenland

Monika Margrét Stefánsdóttir
Master thesis submitted as part of studies for the M.A. – Degree in Polar Law.
Akureyri
June 2014
Master Thesis
Monika Margrét Stefánsdóttir
Ha070314

Large Scale Projects in the Arctic:
Socio-economic impacts of mining in Greenland

Joan Nymand Larsen:
is hereby approved as part of studies towards the M.A. degree in Polar Law Studies

Akureyri in June 2014
Master Degree Examination Committee Members

_______________________________________
Joan Nymand Larsen

_______________________________________
Hjalti Jóhannesson

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Abstract
Changes in the Arctic environment in the last decades are highly relevant to understanding
changes in the socio-economic development in the Arctic. The main focus of this thesis will be
on those changes, with a certain concentration on the changes in relation to Greenland. The
thesis starts out by providing an overview of the physical and historical background of
Greenland, followed by an overview of the economy of Greenland and a discussion of the
obstacles for economic development. With Self-Government, Greenland is looking for new
sources of income. The importance of the mineral sector has grown as it begins to show its
potential as this new source. Case studies of four different mines, in three different countries,
along with large scale projects in four different countries will be analysed and compared.
Two of the mines are in Greenland, the Maarmorilik mine (closed operation in 1990) and the
ISUA Iron Ore mine (that has not started operating yet). The other two mines are the Mir
mine in Russia (closed operation in 2001) and the Red Dog mine in Alaska, which is still
operating. The other case studies are the Eastern Siberia-Pacific Ocean Pipeline in Russia,
The Snøhvit (Snow white) gas field in Norway, Kárahnjúkar hydro power and Alcoa
Fjarðarál in Iceland and the Ekati diamond mine in Canada. These case studies will be
analysed and discussed to gain a better understanding of the impacts that large scale
resource exploitation have on their environment and the surrounding society, with the goal to
gain knowledge about best practices.

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Gratitude
My gratitude goes to my supervisor Joan Nymand Larsen, which gave me the best advice and
mentoring possible for this thesis. I especially want to thank her for the patience and her
countless values, and for making me believe in myself during this process.
Special thanks go to the institutes and companies that contributed and made my fieldwork trip
to Nuuk in September 2013 possible. Without them the project would not have had the same
value and would have been different in so many ways. My gratitude goes to Arngrímur
Jóhannsson at the Polar Law Institute, Níels Einarsson at the Stefansson Arctic Institute,
Óskar Óskarsson at Gúmmívinnslan, Akureyri and Flugfélag Íslands.
Finally I want to thank my family, for all their support in various ways during the period of
this writing. Last but not least, my gratitude goes to my husband and my children, Gunni,
Malena, Jana, Stefán and Hjördís, thank you all, I would never have been able to do this like I
did without you all.

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Table of Contents
List of Figures ........................................................................................................................................... 4
Introduction ............................................................................................................................................. 5
1. Methodology and research questions ........................................................................................... 10
1.1. Fieldwork ............................................................................................................................... 11
2. Greenland’s background ............................................................................................................... 15
3. Greenland – history of economic development ............................................................................ 18
3.1. Colonial Rule .......................................................................................................................... 19
3.1.1. G-50 Policy ..................................................................................................................... 20
3.1.2. G-60 Policy ..................................................................................................................... 22
3.2. Home Rule ............................................................................................................................. 25
3.3. Self-Government ................................................................................................................... 28
3.4. Home Rule vs. Self-Government ........................................................................................... 37
3.5. Summary................................................................................................................................ 39
4. Economic Development in Greenland ........................................................................................... 41
4.1. The Greenland Economy – The mixed economy ................................................................... 42
4.2. The Formal Economy ............................................................................................................. 44
4.2.1. Fisheries ......................................................................................................................... 45
4.2.2. Minerals ......................................................................................................................... 50
4.2.3. Tourism .......................................................................................................................... 54
4.3. The Informal Economy .......................................................................................................... 56
4.4. Summary................................................................................................................................ 58
5. Theoretical Background to the Study ............................................................................................ 60
5.1. Primary-Export-led growth theory ........................................................................................ 60
5.2. Greenland´s Export Sector .................................................................................................... 64
5.3. Summary................................................................................................................................ 66
6. Legal Frameworks for megaprojects in Greenland ....................................................................... 67
6.1. History of legal frameworks for megaprojects in Greenland ................................................ 67
6.2. Legal framework for minerals today ..................................................................................... 70
6.3. Summary................................................................................................................................ 74
7. Case studies of four different mines in three Arctic countries ..................................................... 77
7.1. Greenlandic Mining ............................................................................................................... 77
7.1.1. History of the Black Angel Mine .................................................................................... 78
7.1.2. Environmental monitoring and pollution at Black Angel .............................................. 80
7.1.3. Black Angel today .......................................................................................................... 81
7.1.4. Lessons to be learned from Black Angel Mine .............................................................. 82
7.1.5. Summary ........................................................................................................................ 83
7.2. History of the ISUA Iron Ore mine ......................................................................................... 84
7.2.1. Summary of the project description.............................................................................. 85
7.2.2. Education for local people ............................................................................................. 86
7.2.3. Social Impact Assessment ............................................................................................. 87
7.2.4. Environmental Impact Assessment ............................................................................... 89
7.2.5. Summary ........................................................................................................................ 91
7.3. Alaska mining......................................................................................................................... 92
7.3.1. NANA foundation .......................................................................................................... 92
7.3.2. History of the Red Dog Mine ......................................................................................... 92
7.3.3. Environmental Impact Statement for Red Dog Mine .................................................... 94
7.3.4. The Red Dog mine today ............................................................................................... 96
7.3.5. Education for local people ............................................................................................. 97
7.3.6. Negative impacts from Red Dog .................................................................................... 98
7.3.7. Summary ........................................................................................................................ 99
7.4. Mining in Russia ..................................................................................................................... 99
7.4.1. History of the Mir mine in Russia ................................................................................ 100
7.4.2. Condition at the Mir mine ........................................................................................... 101
7.4.3. The Mir Mine opening and production ....................................................................... 102
7.4.4. ALROSA ........................................................................................................................ 102
7.4.5. Environmental Impact Assessment in Russia .............................................................. 103
7.4.6. Summary ...................................................................................................................... 104
8. Megaprojects in four different countries - Case studies ............................................................. 105
8.1. Introduction to megaprojects ............................................................................................. 105
8.2. Megaproject in Russia ......................................................................................................... 107
8.2.1. Eastern Siberia-Pacific Ocean Pipeline – case study ................................................... 109
8.3. Megaproject in Norway ....................................................................................................... 111
8.3.1. Snøhvit (Snow white) Gas field, Norway – Case study ................................................ 112
8.4. Megaproject in Iceland ........................................................................................................ 113
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8.4.1. Kárahnjúkar and Alcoa Fjarðarál – case study ............................................................. 115
8.5. Megaproject in Canada ....................................................................................................... 118
8.5.1. Northwest Territories of Canada-EKATI diamond mine – case study ......................... 119
8.6. Summary from all four case studies .................................................................................... 122
9. Concluding General Analysis and Discussion .............................................................................. 127
10. Concluding comments ............................................................................................................. 135
Appendix .............................................................................................................................................. 137
Greenland – background ................................................................................................................. 137
1.1. Physical characteristics ........................................................................................................ 137
1.2. Inhabitants ........................................................................................................................... 139
1.3. Environmental overview ..................................................................................................... 146
1.4. Summary.............................................................................................................................. 149
Bibliography ......................................................................................................................................... 151

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List of Figures
Figure 1 - Map - Arctic Boundaries defined by the Arctic Human Development Report ....................... 5
Figure 2 - Map - Greenland and surrounding Ocean ............................................................................ 15
Figure 3 - Table 1 - Total population by time, gender and place of birth ............................................. 16
Figure 4 - Table 2 - Fish export in tons 1977-1986 ................................................................................ 47
Figure 5 - Table 3 - Key fish export ....................................................................................................... 49
Figure 6 - Table 4 - Mineral export in tons 1977-1986 .......................................................................... 51
Figure 7 - Table 5 - Raw materials by specification, type and time ...................................................... 52
Figure 8 - Table 6 - Mineral export from 2004-2011 ............................................................................ 52
Figure 9 -Graph - International Passangers in Greenland .................................................................... 55
Figure 10 - Graph - Number of Cruise passangers in Greenland ........................................................... 55
Figure 11 - Table 7 - Key mines in Greenland mining history ............................................................... 60
Figure 12 - Table 8 - Greenland's Primary Export ................................................................................. 65
Figure 13 - Table 9 - Major mines that have operate in Greenland ..................................................... 78
Figure 14 - Map - Location for the Maarmorilik mine (Black Angel) in Greenland .............................. 79
Figure 15 - Photo - Black Angel Mine Greenland ................................................................................. 80
Figure 16 - Map - Location of the Isua Iron Ore Mine in Greenland .................................................... 85
Figure 17 - Map - Location of the Red Dog Mine in Alaska .................................................................. 93
Figure 18 - Photo - Red Dog Mine in Alaska ......................................................................................... 96
Figure 19 - Map - Location of the Mir Mine in Russia ........................................................................ 100
Figure 20 - Photo - Mir Mine in Russia ............................................................................................... 102
Figure 21 - Map - The East Siberia-Pacific Ocean Pipeline, Russia ..................................................... 109
Figure 22 - Map - The location for Snøhvit, Norway ......................................................................... 112
Figure 23 - Map - Kárahnjúkar and Alcoa Fjarðarál, Iceland .............................................................. 115
Figure 24 - Map - The Ekati Diamond Mine, Canada .......................................................................... 120
Figure 25 - Table 10 - Overview of socio-economic and environmental impacts, case studies ..……..126
Figure 26 - Map - Greenland and surrounding Ocean ........................................................................ 137
Figure 27 - Table 11 - Total population by time, gender and place of birth ...................................... 139
Figure 28 - Photo - Municipalities in Greenland ................................................................................. 140
Figure 29 - Table12 - Population by municipalities, towns and settlements ..................................... 141
Figure 30 - Graph - Changes within rural population ......................................................................... 143
Figure 31 - Table 13 - Total migration in Greenland by time, migration type, place of birth, etc ...... 144

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