ETM refutes Greenland PM’s claims

Energy Transition Minerals is pushing back against claims of Chinese ownership as it seeks to progress its Greenlandic Kvanefjeld rare earth project and completes a $9.35 million capital raise.

Addressing investors on Monday, ETM managing director Daniel Mamadou-Blanco fact-checked statements surrounding the project’s ownership structure, legal compliance and mining licence rejection in response to a Fox News interview conducted with Greenland’s Prime Minister, Mute Egede, last Thursday. 

When asked about international interest in Greenland’s critical minerals industry, Mr Egede told Fox News host Bret Baier that the country was open to increased European and American investment in the Danish territory’s mining sector.

However, when pressed on whether there were Chinese mining companies operating in Greenland, Mr Egede said his government had stopped a company with Chinese investors from securing its mining licence – a statement Mr Mamadou-Blanco alleges indirectly points the finger at ETM subsidiary Greenland Minerals.

One of Energy Transition Minerals’ largest shareholders is Shanghai-listed rare earths producer Shenghe Resources. According to corporate filings, the company holds a 9% stake in ETM, but Mr Mamadou-Blanco maintains this should not be the government’s focus as the company works to develop its rare earths project.

“Shenghe has no controlling interest in Greenland Minerals, and it has never exerted influence inconsistent with Western business practices. 

“The suggestion that we are a Chinese mining company is misleading at the very least.

“Our list of shareholders is long, and it comprises institutional investors, sovereign funds and private investors alike, from all around the world, including Australia, the United States of America, Europe, Asia, and China.".

That list has only grown since the company’s institutional placement, which added a range of international interests to the share register today.

Cannacord Genuity acted as lead manager to the placement, which brought in new investors at 6.8 cents a share, representing a 20 per cent discount to ETM’s closing price last Friday and valuing the rare earths pundit at $120 million.

Speaking to Business News, Mr Mamadou-Blanco said that the funds would be used as both an offensive and defensive asset. 

“We want to be able to make decisions and control our own destiny in terms of whether we take external financing,” he said.

No doubt the proceeds will be used defensively as ETM progresses its arbitration case with Greenland’s government – a comprehensive effort to wind up a longstanding legal stoush that has prevented the company from developing its Kvanefjeld asset.

Although ETM secured an exploration licence for the project in 2007, it has been unsuccessful in its applications for an exploitation licence given the tenement’s history of uranium mining.

Greenland’s Uranium Act, passed in 2021, ensures that tenements with a uranium concentration of more than 100 parts per million cannot be explored or developed. For what it’s worth, the World Nuclear Association classifies this as low-grade uranium ore.

Photo: World Nuclear Association

ETM’s Kvanefjeld project, which is lauded as the world’s second-largest source of rare earth oxides, was first discovered in the 1950s and spent its early days as a uranium mine. This means the project falls on the government’s no-fly list.

However, given the ore’s low uranium concentration and its environmental and social endeavours to date, ETM argues that a fundamental principle of Greenland’s mining policy should prevail: that projects which have received an exploration licence carry the right to automatically receive an exploitation licence as long as they comply with the necessary conditions. 

To that end, the company claims it has satisfied all the essential requirements to secure the regulatory green light, and that Greenland’s government is effectively stopping the company from invoking its legal right to an exploitation licence. 

“[Mr Egede] has suggested that the government of Greenland's decisions regarding mining projects are influenced by subjective considerations, and that is troubling,” Mr Mamadou-Blanco said of the Greenlandic prime minister’s recent claims.

“In fact, it raises serious questions about the objectivity and the fairness of the decision-making process of the Greenlandic government, particularly as it pertains to the Kvanefjeld project.”

“We urge the Greenlandic government to prioritise transparent and merit-based decision-making processes which respect the rights of all stakeholders.”

As arbitration continues, ETM has engaged ex politico Julie Bishop’s advisory firm to support its legal endeavours, publicising the partnership in a market announcement last week.

“What interested me about this project, was of course the people and the company's commitment to the economic and social benefits that this project could bring to the people of Greenland,” Ms Bishop told Business News at the time.

“From a geostrategic point of view, it's an immensely interesting and challenging project.”

Interesting and challenging, indeed. For Kvanefjeld to get off the ground, ETM’s subsidiary, Greenland Minerals, needs to secure that all-important exploitation licence – a move the company believes will ultimately support development in the Danish territory’s favour.

“It is estimated that Greenland will receive approximately USD 22.8 billion in taxes, royalties and other benefits if the Kvanefjeld Project is allowed to proceed,” Greenland Minerals reported in a 2023 Statement of Claim.

“In addition, the project has the potential to deliver jobs, infrastructure, services and lasting opportunities to the local people.

Confident of his company’s success in arbitration, Mr Mamadou-Blanco told Business News that he’s already planning the project’s next steps.

“We want to update our reserve estimate. We want to continue expanding the ground around Kvanefjeld, and to push our exploration activities in Greenland. 

“That's essentially what motivates this raise.”

Of course, ETM’s placement and plans for Kvanefjeld’s development coincide with U.S. President Donald Trump’s renewed efforts to buy – or annex – Greenland. 

The news caused the Melbourne-headquartered company’s share price to quadruple in January, skyrocketing its valuation ahead of the institutional raise. 

After emerging from a trading halt this morning, however, ETM shares are trading 4.7% lower at 8.1 cents – still, a far cry from their 20-cent origins just a few months ago.