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Government of Greenland Highlights (Mineral Prospecting, Exploration and Exploitation) Bureau of Minerals and Petroleum January 2013 Contents Preface ................................................................................................ 3 About this booklet .............................................................................. 4 What is the BMP? ............................................................................... 4 Why Greenland? ................................................................................. 4 Application Procedures ...................................................................... 5 Licence types ...................................................................................... 5 Contacts .............................................................................................. 7 2 Government of Greenland highlights 2013 Preface As the responsible Minister for Industry and Mineral Resources I hereby present the Government of Greenland highlights to you. In recent years Greenland has seen an unprecedented international interest in both mineral, oil and gas potentials in the Greenlandic underground. The increased interest shown by the industry has been driven by intensive marketing of the Greenlandic mineral resource potential and also by favourable price developments for minerals. London Mining has applied for an exploitation license at the Isukasia iron deposit. Some of the advanced mineral projects exploring for, zinc and rare earth elements (REE) have now reached a crucial phase and feasibility studies are expected to be finalised during 2013 and 2014. It is thus possible that more mining projects will see the light of day in the coming years. Greenland – a treasure of mineral resources - One-door-stop authority - Stable, efficient and flexible administration - Access to geological data via the Geological Survey It is my hope that during the next five to ten years we have more than five active mines and more than one thousand residents employed in this industry. This development has to take place in an environmentally and socially sustainable manner and in view of increased employment, business involvement and earnings. Yours faithfully Ove Karl Berthelsen Minister for Industry and Mineral Resources Government of Greenland highlights 2013 3 About this booklet This booklet contains highlights of the most relevant information relating to the mineral regulation in Greenland. The booklet has been prepared by the Bureau of Minerals and Petroleum (BMP), which is the administrative body under the Government of Greenland responsible for mineral licence processing in Greenland. For further information please visit the BMP website (www.bmp.gl). What is the BMP? The Bureau of Minerals and Petroleum (BMP) is a part of the administration under the Government of Greenland and is the only authority for administration of mineral resources in Greenland under the Mineral Resources Act. The BMP office is located on the west coast of Greenland in the city of Nuuk the capital of Greenland. The BMP operates as a flexible, efficient and practical administration in constant close dialogue with international exploration companies. The BMP administration is a one-door-stop authority, meaning that all administration is processed via the BMP office in Nuuk. Processing of applications, approval of baseline studies, approval of blasting and drilling operations, inspection at field sites and other relevant operations relating to exploration in Greenland is handled by the BMP. This is done in close co-operation with our advisers; the Geological Survey of Denmark and Greenland (GEUS) and the National Environmental Research Institute (NERI). includes guidelines regarding Environmental Impact Assessment (EIA) and Social Impact Assessment (SIA). Why Greenland? Greenland is a frontier country for exploration and mining of mineral resources. In spite of this frontier status Greenland has a mining history dating back to the mid 19th century. `Frontier country` means there are large unexplored areas. As the ice melts and the glaciers retreat new areas emerge from the ice. Several exploration projects have already been realized due to this change in the environment. Politically, the mineral sector in Greenland is a highly prioritised area of growth which also includes focus on the educational aspects of the mining sector. The Greenland Self Rule is a part of the Kingdom of Denmark and has many similarities with the Danish tradition of administration. Compared to other frontier countries Greenland is politically stable and administrates on the basis of best international practice. Geologically several similarities have been documented between the northern and western part of Greenland and structures in Canada. In Canada mines are already operating in these structures. It is a fact that the growing focus on new unknown geological areas in Greenland has created a boom in new licences. All procedures, standard terms, rules for field work, guidelines including the Mineral Resources Act, can be found on the BMP website www.bmp.gl. This website also 4 Government of Greenland highlights 2013 Application Procedures All applications for a mineral licence must be submitted to the the Bureau of Minerals and Petroleum. A correct application is defined as an application, which is completed on the approved BMP application form (download the form from the BMP website www.bmp.gl), and which according to the BMP`s assessment adequately contains, delineation of an area, technical and financial information and other relevant information. Application/Granting fees The applicant has to pay an application fee of DKK 3,000 for a prospecting licence and DKK 5,000 for an exploration licence. The applicant also has to pay a granting fee of DKK 23,300 when a prospecting licence is granted and DKK 33,800 when an exploration licence is granted (index-adjusted). For other fees and exploration commitments see www.bmp.gl. On the 1st and the 16th of every month, information on all new applications and granted licences is published on the BMP website. Licence area The granted licences covers only land areas, unless otherwise indicated in the licence. The size of the licence area is calculated by the BMP on the basis of the coordinates submitted in the application. The size of the licence area is the basis for the calculation of the yearly exploration commitment. The licence area may consist of up to five sub areas, provided exploration in these sub areas is carried out as an integrated exploration project for either geological or logistical reasons. The distance between any two sub areas must not exceed 100 km. Each sub area must be at least 5 km2. A sub area is defined as an area which does not share a borderline with another sub area; however two sub areas may share a corner point. Licence period A licence is effective for the period indicated in the licence. At expiration of the first licence period (years 1-5) the licensee is entitled to a five-year extension of the licence for the same area and mineral resources, wholly or partly, as at the end of the first licence period, provided that the terms of the licence have been complied with. At expiration of the second licence period (years 6-10) the licensee may be granted a new two-year licence for years 11-12, 13-14 and 15-16 for the same area and mineral resources, wholly or partly, as at the end of the previous licence period, provided that the terms of the licence have been complied with. The licensee is not, however, automatically entitled to have such licences granted. An extra annual fee is imposed from year 6 and onward. The licensee may at any time surrender the licence with immediate effect. Surrender does not eliminate unfulfilled exploration commitments. Licence types Prospecting licence The prospecting licence is non-exclusive and is normally granted for five years covering large standard areas in West, East or North Greenland, excluding those areas already covered by exploration and exploitation licences. Prospecting licences do not contain any commitments and only limited field work can be performed under this licence unless approved by the BMP. Government of Greenland highlights 2013 5 Exploration licence The exploration licence is exclusive and covers specified areas. It is normally granted for five years. At expiration of the first licence period (year 1-5) the licensee is entitled to be granted a new 5 year licence for the same area and mineral resources. At expiration of the second licence period (year 6-10) the licensee may be granted a new 2 year licence for the years 11-12, 13-14 and 15-16 for the same area and mineral resources. This licence can cover any size of area (minimum 5 km2) which can be enlarged or reduced upon application. The licence area may be wholly or partly relinquished at any time. Exploration commitments are expressed as expenditure obligations based on the size of the licence area and the time for which it has been held. The commitments increase over time. Firstyear expenditure commitments are calculated on the basis of the area initially granted under the licence. For subsequent years they are recalculated according to the land area held at the end of the year. Thus if the holder decides to relinquish all or part of the licence in a later year, the commitment for that year is decreased accordingly or cancelled. For each exploration licence, a yearly exploration commitment is calculated on basis of the following two components (2013 figures): Year 1-2:….. DKK 155,200 Year 3-5:….. DKK 310,400 Year 6-10:… DKK 620,800 Year 1-2:….. DKK 1,550 per km2 Year 3-5:….. DKK 7,760 per km2 Year 6-10:… DKK 15,520 per km2 Depending on environmental conditions and the fulfilment of exploration obligations and 6 other legal requirements, the exploration licensee who delineates a viable mineral deposit is entitled to an exploitation licence. The transition between these two licence types is described in the standard terms for exploration licences which are found on the BMP website. Special exploration licence A special three-year exploration licence with reduced exploration commitments is available for areas of over 1,000 km2 in North and East Greenland. Exploitation licence The exploitation licence is also exclusive and will normally comprise a restricted area covering only the deposit. Exploitation licences are normally granted for 30 years and can be extended to 50 years. Licences are only granted to limited companies domiciled in Greenland. If the licensee has found and delineated commercially viable deposits which the licensee intends to exploit and provided the terms of the exploration licence have been complied with the licensee is entitled to be granted an exploitation licence The licensee has to demonstrate the necessary technical and financial capabilities needed to establish an operating mine. An exploitation licence allows the licensee to construct the facilities needed for the project, subject to the approval by the BMP of the development plan. This plan should include an environmental impact assessment (EIA), a social impact assessment (SIA) and a closure plan. The economic terms in an exploitation licence will be taxation according to Greenland legislation. Local work force and local firms are to be involved to the greatest possible extend. Government of Greenland highlights 2013 Contacts _____________________________________ Applications are forwarded to the BMP: Bureau of Minerals & Petroleum (BMP) Imaneq 1A - 201 P.O. Box 930 3900 Nuuk Greenland Tel: +299 34 6800 Fax: +299 324302 Email: [email protected] Website: www.bmp.gl _____________________________________ Geological Survey of Denmark and Greenland (GEUS) Øster Voldgade 10 DK-1350 Copenhagen K Tel: +45 3814 2000 Email: [email protected] Website: www.geus.dk Geological reports can be retrieved from the GEUS DODEX geological database: http://www.geus.dk/dodex/index.html ____________________________________ Danish Center for Enviroment and Energy (DCE), Aarhus University P.O. Box 358 Frederiksborgvej 399 DK-4000 Roskilde Tel: + 45 8715 5000 Fax: +45 8715 5010 Email: [email protected] Website: www.dmu.dk _____________________________________ __________________________________ Institute of Natural Resources P.O. Box 570, 3900 Nuuk, Grønland Tlf: (+299) 36 12 00; Fax: (+299) 36 12 12; E-mail: [email protected] Hjemmeside: www.natur.gl _____________________________________ Greenland School of Minerals and Petroleum P.O. Box 1001 3911 Sisimiut Greenland Tel: +299 86 76 00 / +299 86 44 88 Fax: +299 86 45 28 Email: [email protected] Website: www.sanilin.gl _____________________________________ Other websites of interest for the explorationand mining industry: www.greenland.com www.greenmin.gl www.nanoq.gl www.ujarassiorit.gl www.ga.gl _____________________________________ Government of Greenland highlights 2013 www.bmp.g 7 8 Government of Greenland highlights 2013