Mineral and oil income is expected, within five years, to surpass the current handouts from Copenhagen that Greenland lives off.
Negating the need for the DKK 3 billion (USD 580 million) handout means that national financial independence may be just a few short years away, according to forecasts from the leader of the Raw Materials Directorate in Greenland in a report by Sermitsiaq.
The Danish state provides an annual block grant to the country but according to Jorn Skov Nielsen, the planned oil drilling tests across four sites this summer could see new capital flowing by 2015. Although the veracity of claims to Greenland’s purported oil-reserves remain unproven, the Raw Materials Directorate has predicted that a single oil strike could fetch an annual DKK 10 billion (USD 1.9 billion).
Under the new rules which assist the transition to self-rule, Greenland will split profits from any natural resources after the initial DKK 75 million (USD 14.5 million) which would remain in Greenland. The block grant will be discontinued should a level of DKK 7 billion (USD 1.3 billion) be surpassed.
“If we start earning a lot of money on minerals, we’ll need to save a lot of it in order to ensure that we can use them once the block grant disappears,” said Nielsen, who expects up to six new mines to generate mineral wealth in excess of the block grant. While oil would create maximum revenue, additional jobs would be created in the mining sector with a miner-training school already being established in Greenland.
“Right now, there are 90 people working with mining in Greenland,” Nielsen said. “Within seven years there were will be 1,500 new tax paying positions”.