Greenland ruby miner not living up to benefit deal | Polarjournal
Not quite the goldmine it was cracked up to be (Photo: LNS)

Since 2016, when it overtook what was then Greenland’s sole operational mine, LNS Greenland has had an obligation to pay the hamlet of Qeqertarsuatsiaat, where the Aappaluttoq ruby mine is located, 250,000 kroner (€33,600) each year to fund cultural and social activities. To date, it has paid nothing, and, although the firm admits the payments are overdue, it has told the hamlet not to expect anything until the mine starts making money. 

The payments were agreed with the mine’s initial, now-defunct, owner, True North Gems, as part of what is known as an impact benefit agreement. These legally enforceable deals between firms and the communities where they operate seek both to limit the damage done by mining operations and to make sure that the communities receive tangible benefits. In the case of Qeqertarsuatsiaat, this included not just the annual payment, but also things like a pledge to provide jobs and training, purchase products locally and to share some of the gemstones the mine produced with local craftspeople. 

As far as impact benefit agreements go, the one covering the Aappaluttoq mine is disproportionately skewed in the hamlet’s favour, according to Kommuneqarfik Sermersooq, which, as the local authority, is responsible for ensuring that LNS lives up to its obligations. By and large, it says, it has done so, and that, for now, it is satisfied. 

Some council lawmakers and hamlet representatives are not. They point out that the agreement LNS accepted when it took over the mine does not excuse it from making the payment if it is losing money. The impact — and the community’s need for the money — are the same regardless. By not making the payment, says Peter Davidsen, a local councillor, LNS is casting doubt on its own credibility and the credibility of the mining industry, which Greenland sees as its ticket to financial independence from Denmark.

LNS, according to Kommuneqarfik Sermersooq, is unsatisfied with the impact benefit agreement. The two have agreed to discuss whether to change certain details in order to make the agreement clearer, and to make sure that everyone feels they are getting the most out of LNS’s presence. 

Aqqaluaq B Egede, a member of the cabinet whose remit includes mining, admits the Aappaluttoq agreement might need touching up. It was, he told Sermitsiaq.AG, a news outlet, the first of its sort in Greenland and has failed to live up to expectations. The way forward, he believes, is to come up with a new agreement, not to force LNS to continue to live up to an agreement that isn’t working.

For Kommuneqarfik Sermersooq, it is the past that is first and foremost on its mind: it is conscious that LNS’s predecessor went belly up trying to make a go of Aappaluttoq. Were the same to happen to LNS, the 60 odd jobs it provides — 95% of which are filled by local hires — and the 40 million kroner it pays in taxes would disappear. Few would disagree that the impact of that would be of much benefit at all.

Kevin McGwin, PolarJournal

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