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In vote, resource-rich Greenland debates new global role

Greenland's Prime Minister Kuupik Kleist looks out from his office in Nuuk, March 7, 2013. REUTERS/Alistair Scrutton
Greenland's Prime Minister Kuupik Kleist looks out from his office in Nuuk, March 7, 2013. REUTERS/Alistair Scrutton

By Alistair Scrutton

NUUK (Reuters) - Kuupik Kleist's earliest memories are hunting whales with hand-thrown harpoons. Now, as Greenland's prime minister, he is feted by Chinese and European leaders as he opens up its untapped mineral resources.

A verdict on this country's transformation comes on Tuesday, when this island - a quarter the size of the United States and with only 57,000 mostly Inuit inhabitants - holds a general election.

There is only one polling station in the capital Nuuk, which has just two traffic lights and where hunting is still the most popular pastime. But the vote may pack a global punch.

After four years of Kleist - a quiet-spoken musician known as Greenland's Leonard Cohen for his gravelly voice - the vote is effectively a referendum on how far it embraces international mining companies, energy giants, and foreign workers.

At stake may be Greenland's growing geopolitical role as global warming and the thawing of sea ice open up new sea lanes, minerals and oil fields - drawing the interest of world powers from China to the United States.

"There is a growing nationalist backlash. It's not a nice thing to see," Kleist said, sitting in his ninth floor office overlooking the snow-capped hills surrounding Nuuk Bay.

"The fear of being overrun by foreigners is exaggerated," the 54-year-old said. "We are becoming a global player. We need to avoid ethnicity, nationalistic feelings."

With Greenland having self-rule from Denmark aside from defense and security, the vote has seen a split between Kleist and an opposition linked to traditional Greenlanders like fishermen and hunters who feel he has gone too far in welcoming foreign companies.

There are calls for more taxes on foreign firms, growing suspicions about Chinese mining investments, demands for more environmental safeguards and even anti-colonial rhetoric to limit the use the Danish language being spoken.

"The main issue is that people feel that they are not part of the decision-making process of big scale projects and mining," opposition leader Aleqa Hammond said at her small campaign offices in Nuuk. "Where is the voice of the people?"

Hammond also grew up in a remote village. Her father died when she was young after he fell through ice while hunting. She says her family tried to make her marry a hunter. She refused. Instead, she has a good chance of being next prime minister.

Since Greenland won self-government in 2009, most politicians have aimed for growing autonomy and eventual independence. The more revenues from mining or oil, the more Greenland weans itself of Denmark's annual grant that accounts for more than half the island's budget.

In Kleist's gleaming new offices in Nuuk, many Danish civil servants sip cappuccinos, huddle over computer screens and plot policies from finance to mining regulations. Greenlanders mention the symbolism of an executive and its staff whose offices sit over Nuuk's one shopping mall.

The civil servants stand out in Nuuk, where sushi bars and cozy, heated cafes with sofas and internet contrast with barren, concrete housing estates of fishing industry workers.

HOPE OR HYPE?

Not one mining or oil project has got off the ground yet.

But more than 100 exploration licenses have been awarded. There are large deposits of rare earths, used in products from wind turbines to hybrid-powered cars. China accounts for the majority of world supply. There are hopes for gold and zinc.

Government officials says reserves may be equivalent to as much half of the entire North Sea.

Central to the debate in Greenland is a $2.3 billion project for an iron ore mine by the British-based London Mining Plc near a fiord in Nuuk. It may involve diesel power plants, a road and port and would supply China with iron to fuel its economy.

Some 2,000 Chinese workers - the equivalent of around four percent of Greenland's population - could fly in for its construction, touching nerves where unemployment is rising.

"People feel that I am unemployed but the Chinese are coming in by mass," said Hammond.

SEAL HUNTING

At Nuuk's windswept port, fishermen drag in fish and seals from a catch. The floor on a small warehouse is awash with blood. There is a gagging stench of dead flesh.

Johannes Heilmann, 64, grew up hunting for whales. He still fishes with a 19-feet long boat encrusted in ice in the harbor, shooting occasional seal with a rifle to sell for meat in Nuuk.

Fishing accounts for 90 percent of Greenland's exports.

Heilmann is the Greenlander that is suspicious of mining. He campaigns against Kleist. He complains about fishing quotas, and how cheaper foreign produce is pushing out local food.

"No matter how much mining comes here, fisheries will be our main industry," Heilmann said. "Politicians should pay more attention to us."

Heilmann worries about London Mining. He fears any spill from the iron ore ships could destroy fishing.

"I don't mind if Chinese come here," he said. "But if there is an accident?"

Others are more nationalistic. One new party, Partii Inuit, has caused controversy by calling for more prominence for Greenlandic language over Danish, still widely used here.

Four hours north of Nuuk by boat lies Maniitsoq, one of many villages dotted on the western coast, relying on state subsidies for heating and communications. Unemployment is high.

U.S. giant Alcoa Inc has considered building an aluminium smelter there, strategically sited between European and North American markets. It could entail the import of thousands of workers, possibly from China.

Many here are desperate for Alcoa after much of fisheries has vanished. The town is huddled on an outcrop of windswept rocks with rusty housing blocks.

"The younger people, they all want Alcoa," said Jens Moller, head of a community training project in Maniitsoq, told Reuters by phone. "The older generation want better fishing. They are the ones likely to vote for the opposition."

In Nuuk, Karsten Peter Jensen is a 27-year-old post graduate student. He enjoys hunting in fiords for grouse or reindeer. But he also enjoys sushi bars and chic shops.

"The last four years have been very positive, we have looked to the outside world," Jensen said. "But for other people, they think change has come too fast. There is a perception Greenlanders have been put aside a bit."

CHINESE GHOST?

Worries that China wants an Arctic foothold have risen in a territory that for years was a Cold War ally of the West.

It was little surprise when President Hu Jintao, China's outgoing leader, paid a three-day visit last year to Denmark, home to just six million people. Many assumed Greenland's riches were on his mind despite official denials.

Hammond says she would introduce royalties for mining companies and revise a law passed last year that effectively allowed big mining companies to employ thousands of foreign workers for construction of projects.

"For the greedy ones that want 100 percent of everything, Greenland is not for them," Hammond said.

That has some investors worried. Several mining executives, who asked to remain anonymous as they did not want to talk about politics, said investment decisions were on hold.

Few believe Greenland would turn against mining. The concern is more that politicians could hurt a fragile and emerging industry through demanding too many royalties and taxes.

"We are a small country that is in competition with the rest of the world," said Maliina Abelsen, finance minister. "When you build up expectations, you get people saying that we have so much in the ground, so we are fine."

"But we cannot eat that for breakfast. It is still in the ground."

An annual grant from Denmark has been effectively frozen at around 3.5 billion Danish crowns (about $610 million) and will shrink in real value over time.

Kleist pointed to his view over Nuuk. Icebergs floated by. He worried that if he lost power he would lose the view.

"There's always been a tendency to isolate Greenland from the rest of the world," Kleist said. "It's been my personal ambition to open us up. There is no alternative."

(Additional reporting by Katja Vahl; Editing by Angus MacSwan)

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