Iqaluit: Gateway to Greenland's resource riches

Air Greenland isn't exactly among the world's major airlines. It only has 10 airplanes, 600 employees and one international route – to Iceland.

But when the airline announced Wednesday that it's starting regular flights from Nuuk to Iqaluit this summer, many in the global mining community took notice. That's because Greenland has become one of the hottest places in the world for mining and oil exploration.

Global warming, new extraction technologies and a recent move by Denmark to give the island territory autonomy over natural resources has prompted a small stampede of companies rushing to Greenland to tap into its wealth of uranium, iron ore, gold, gemstones, rare earths and offshore oil.

"Over the past few years, we've just seen a growing demand for this service," Christian Keldsen, an Air Greenland spokesman said from Nuuk. "There is a lot of exploration going on."

Iqaluit made sense as the launching point for North America, he added, because it's relatively close to Greenland and shares cultural and educational ties with Nuuk. There used to be flights between the two communities back in the 1990s, but they were not sustainable, Mr. Keldsen said. Now, with all the exploration and mining activity under way in Greenland, Air Greenland saw an opportunity – especially since many companies have been chartering aircraft to make the trip.

The Dash-8 service will be co-ordinated with arrivals in Iqaluit from Ottawa and other Canadian cities to ensure smooth connections for business people. For now, the flight, which takes about 1 hour and 45 minutes, will run twice a week from June to September and cost about $1,500 return. Air Greenland is considering extending the service later into the year and adding more cities.

"I think it's marvellous," said Nicholas Houghton, chief executive officer of Vancouver-based True North Gems Inc., which is developing a ruby mine in Greenland. "It shows they are open for business."

Mr. Houghton travels to Greenland up to four times a year and he usually has to fly through Amsterdam and Copenhagen, which can take more than two days. He has also hired planes in Iqaluit to make the trip.

True North has been working in Greenland for the past eight years and Mr. Houghton said the level of activity has been growing steadily. He noted that Greenland shares much of the same geology as Northern Canada but isn't nearly as cold in winter. "We were there last year at this time and it was minus 5," he said. Greenland, he added, "is an untapped resource."

Greenland is the world's largest island (Australia is considered a continent) and while it is almost entirely covered in ice, new mining technologies and warming temperatures have made more projects feasible. Britain's Angel Mining PLC is starting a gold mine and has reopened an abandoned lead and zinc mine. London Mining PLC, also of Britain, is working on an iron ore mine. Canada's Quadra FNX Mining Ltd. is considering a molybdenum project and Hudson Resources Inc. is focusing on rare earths minerals and diamonds. Britain's Cairn Energy PLC is also drilling for oil offshore and China has taken an interest in Greenland, with many Chinese companies considering partnerships on the island.

The number of mineral licences issued in Greenland has increased from 17 in 2002 to nearly 100 last year, according to figures from the Bureau of Minerals and Petroleum. Many more licences for prospecting have also been awarded and overall exploration activity has increased from about $3.1-million 10 years ago to nearly $100-million today.

"Development is the prime driver for this [air service]" Iqaluit Mayor Madeleine Redfern said. Ms. Redfern said the flights will also create opportunities for increased trade, tourism and cultural exchanges between Iqaluit and Nuuk. There have been attempts to start several joint projects between the cities, she added, but they have been hampered by the difficulty of just getting to each city. Travelling to Nuuk costs a fortune at the moment and requires going through Ottawa and Europe. Five months from now, it will take less than two hours at a price less than it costs just to get to Ottawa.

"This is very exciting for us," Ms. Redfern said.