The Employers’ Association of Greenland (GA) has asked Copenhagen Economics to clarify what Greenland should do to ensure that the coming investments in the mining industry are translated into sustainable development in the form of permanent economic growth and prosperity. In this report, we analyze the strengths and potentials of the society and compare these with the possible contributions of the mining companies to the social development. A concrete starting-point is taken in the iron mining project of London Mining in Isukasia. We also consider the experiences from handling mining projects in Northern Canada, which resembles Greenland in several respects. We find that there are significant differences in the size of the potential benefits that could accrue to the Greenlandic society depending on how the ‘game’ is approached. The most important thing is to recognize that coercion is necessary. The Impact Benefit Agreement should lay down targets for the number of local employees and the extent of ‘proactive outsourcing’. Conversely, the Government of Greenland should not pressure the mining companies to carry out activities, such as supporting primary education, that have no connection to their core competency, namely the extraction of raw materials. Finally, the Government of Greenland should increase the supply and mobility of labour, strengthen incentives to work, improve job matching possibilities and ensure that foreign knowledge, labour and capital can easily acquire access to and be anchored in the business community.

Read the (Danish) report here

 

For more information, contact Partner Christian Jervelund