Danish state fund lifts Greenland investments thirtyfold

Investment from Denmark’s state-backed EIFO has helped reopen a gold mine in southern Greenland, while the fund’s business in Greenland has grown almost thirtyfold over the past decade, DR reports.

At the Nalunaq mine, two workers were preparing to blast through a rock face after inserting explosives into hundreds of drilled holes. The mine has produced 280 kilograms of gold this year, worth more than 250 million Danish kroner.

Nalunaq is located in southern Greenland, near the mouth of the deep Sermilik fjord. Its name means “the place that is difficult to find” in Greenlandic.

EIFO has invested 100 million kroner in Amaroq, the company operating the mine. The investment helped the mine reopen two years ago after it had been closed since 2013. The previous owner had been forced into financial difficulties by low gold prices.

“EIFO’s investment has been enormously important for our operations,” mine director Eldur Olafsson said.

The mine now has a port, a processing plant that crushes raw ore and turns it into gold bars, and a container town for 150 employees. Workers from 42 nationalities are employed at the site, where traffic from pickup trucks and mobile drilling machines moves through the tunnels.

Amaroq has produced gold bars weighing more than 10 kilograms, with a value of about 10 million kroner each.

EIFO expands in Greenland

Nalunaq is one of several examples of the Danish state increasing investment and support for business projects in Greenland through EIFO.

“A few years ago, we decided to intensify cooperation and give it more substance,” EIFO chief executive Peder Lundquist said.

EIFO’s business in Greenland has grown from a limited level to 460 million kroner over the past ten years, spread across 37 companies, according to new figures obtained by DR. The investments cover sectors including mining, fishing and tourism.

The capital has helped Amaroq finance an industry that requires substantial investment. According to Olafsson, EIFO’s involvement also gave the company credibility with other investors.

“It gave us capital, which we always need because mining is capital-intensive, and it gave us an endorsement that allowed us to tell other investors that we have support,” he said.

Geopolitical tensions drive focus north

EIFO showed limited interest in Greenland for years, but its focus has increased as geopolitical tensions have grown.

The tensions include the rivalry between Western countries and China over global supply chains for new technology and critical raw materials. They also include tensions between Denmark and the United States, including US President Donald Trump’s repeated demands to take over and control Greenland.

These developments have also increased attention to the north within the Danish government. Lundquist said EIFO’s decision to make Greenland a strategic priority was a response to a clear wish from the Danish government.

The shift began to emerge in 2019, when the Danish government and Greenland’s self-rule government reached a political agreement on stronger business cooperation involving the fund. Greenland has since risen further up EIFO’s agenda, as reflected in the growth of its business there.