Minerals Glut Crushes Independence Dreams as Greenland Votes

(Bloomberg) -- With their dream of commodity riches dead in its icy waters, voters on the world’s largest island will focus on the mundane when they head to the polls on Tuesday to elect a new government.

Greenland, a dependency of Denmark that’s three times the size of France but with a population the size of a large town, is believed to be rich in oil and minerals, including rare-earth elements used in hybrid electric cars and mobile phones.

But since Greenland wrestled control in 2009 of its natural riches from Copenhagen, the much-hoped for arrival of Chinese investors, Big Oil or British and Australian miners has failed to materialize.

Only work on a zinc and a ruby mine is currently underway despite promises of billions of dollars in investments in iron ore and uranium extraction. A plunge in commodity prices cut such investments to less than $80 million in 2016, from more than $850 million five years earlier.

Minerals Glut Crushes Independence Dreams as Greenland Votes

That’s left Greenland’s 40,000 eligible voters having to postpone their dream of greater autonomy and focus instead on more pressing issues like a shortage of social housing and a high school drop-out rate. The election campaign has also focused on how to find the $600 million necessary to build an international airport and improve existing facilities in a bid to replicate the tourism successes of Iceland.

Voters face a familiar choice between the island’s two traditional powerhouses, the social democratic Siumut and the socialist Inuit Ataqatigiit (IA). The outgoing prime minister, Siumut’s Kim Kielsen, faces stiff competition from IA’s popular leader, Sara Olsvig, with a recent poll showing the two parties running neck-and-neck. At the last election, in 2014, only 325 votes separated the two parties. A coalition between the two will likely be needed to form a majority in parliament.

Any realistic plans for independence would require finding a replacement for the billions of kroner that Greenland receives from the Danish government. While the fishing industry has helped Greenland achieve comfortable annual growth rates of 6 percent and more, the territory has failed to reduce its dependency on subsidies from Denmark.

Minerals Glut Crushes Independence Dreams as Greenland Votes

“Everybody wants independence in Greenland,” said Ulrik Pram Gad, a political scientist at Denmark’s Aalborg University. “The question is when and how.”

©2018 Bloomberg L.P.