Aussie explorer mulls lawsuit after Greenland nixes rare earths exploration licence

Energy Transition Minerals (ASX: ETM) is considering legal action against the Greenland government after it rejected the company’s application to extend its exploration licence at the Kuannersuit project, which hosts one of the world’s largest rare earth deposits. Company shares fell.

The government last week declined ETM subsidiary Greenland Minerals’ extension due to the government’s position that it’s unlikely that further exploration would lead to a discovery in line with Greenland’s Uranium Act, which became law in 2021, the Department of Business and Mineral Resources said in a news release last week.

“We are disappointed by this decision, particularly given that the exploration licence had previously been extended after the Uranium Act came into force,” ETM Managing Director Daniel Mamadou said in a release on Monday.

“We had pursued the extension in good faith, however this decision reverses the government’s previous position. It is the latest in a series of shifting policy positions on a project of clear strategic significance, and it sends a damaging signal about the predictability of the regulatory environment in Greenland.”

The application rejection comes as Greenland works to navigate its position amid intensifying geopolitical competition over critical minerals. Under Greenland’s Uranium Act, the autonomous Danish territory bans uranium exploration and mining, and bars other mineral projects where uranium content exceeds 100 parts per million (ppm).

ETM shares fell 17% to A4¢ apiece on Monday in Sydney, valuing the company at A$98.4 million (C$96.2 million). The stock has traded in a 12-month range of 3¢ to 21¢.

‘Listening to the people’

In a Facebook post about the application decision, Mute Egede, Greenland’s minister of foreign affairs and mineral resources said the government is “listening to the people”, especially in southern Greenland, whose position on Kuannersuit had been clear for years. 

“We remain committed to the course Greenland has chosen,” he said. 

The government’s decision came after a 48-hour consultation process where ETM could respond to technical geological assessments, but its request for a one-week extension was denied, the company said.

Its decision didn’t properly consider the company’s 2025 exploration results at Kuannersuit, which showed uranium concentrations below the 100 ppm limit under the Uranium Act, ETM said. Kuannersuit would produce some uranium as a byproduct.

Stop and go

Kuannersuit, also known as Kvanefjeld, has faced several challenges over the years. In 2021, the then-ruling Inuit Ataqatigiit party in Greenland banned uranium mining, which effectively suspended the project.

Then in April, ETM said a draft decision from the government indicated it didn’t intend to renew the exploration licence.

Kuannersuit hosts 457 million measured and indicated tones grating 1.1% total rare earth oxides (TREO) for 5 million contained tonnes TREO, according to a JORC-compliant resource from 2015. Inferred resources total 553 million tonnes at 1.09% TREO for about 6 million contained tonnes.