Nanortalik sees little benefit from nearby gold boom

Gold mining is booming near Greenland’s southernmost town, Nanortalik, but local residents say they have seen few benefits from the activity, DR reports.

The boom is partly driven by Danish state funding through the billion-kroner EIFO fund, which has invested in several mining projects in the area. One of them is Amaroq, the company behind the gold mine.

Majbritt Serano, who has lived in Nanortalik for 25 years and now runs the town’s bar with her son, says the mining companies appear to be making substantial profits without helping the town.

“They must be making a lot of money. They produce gold bars in there. But they do not help here. Nothing is happening in the town,” she says.

Nanortalik has just under 1,100 residents and is among Greenland’s struggling towns. Its population has declined since the local cod fishery collapsed in the 1990s. Unemployment stands at 7.4 per cent, three times the level in Nuuk, according to the latest calculated estimates.

The town’s roads and houses have a run-down appearance. In recent years, mould temporarily closed both the primary school and the municipal office, while outbreaks of bedbugs have also affected the town.

“I do not know what they use all the money from the gold bars for. Where does the money go? We see no benefits. Everything in the town is falling into disrepair,” Serano says.

280 kilograms of gold

The Nalunaq gold mine reopened two years ago. It is located about an hour by boat into Sermilik Fjord from Nanortalik.

The mine had been closed since 2013 because of falling gold prices, but production has now resumed. Gold is extracted and smelted into bars at the site.

The mine produced 280 kilograms of gold in the first six months of the year, worth approximately 250 million kroner at world market prices.

Most employees stay in a container camp with room for 150 people near the mine, and they rarely visit Nanortalik. Workers on rotation are flown in from around the world.

Supplies are not bought from the town’s two grocery retailers either. Ole Enochsen, area manager for the self-rule-owned Pilersuisoq chain, says he hopes the mining activity will bring more people to Nanortalik.

“Things are going reasonably well here in Nanortalik, but I very much hope that more people will come to work in the mines, because that could help develop the shops here in town,” he says.

A local boat company has the contract to transport people and supplies to the mine and has benefited from the growth. Much of the remaining activity, however, is directed towards the larger town of Qaqortoq, where a new airport has just opened and activity is increasing.

Residents say they care about Nanortalik but believe the town is worn down and needs modernisation. Jeremina Starch, who worked for many years at the Brugsen grocery store, says the mine initially brought more business to the town.

“Things are slowly going downhill,” she says.

Company says it invests locally

Eldur Olafsson, the mine’s director, says Amaroq is investing heavily in Greenland and using as many local companies as it can.

Local transport company HK Transport has grown from three employees to as many as 70 during the mine’s operation, while helicopter company Sermeq has expanded from one helicopter to five, he says. Both companies are based in Qaqortoq.

Under Greenland’s special mining regulations, companies pay tax not only on their profits. They must also pay a levy on the turnover from all gold sold. The money goes to the self-rule’s resource fund.

Company struggles to recruit Greenlanders

One of the things Serano says Nanortalik lacks is more local jobs at the gold mine.

The mine employs people from countries including Poland, Serbia, England, Canada and the United States. Olafsson estimates that Greenlandic citizens currently account for about 40 per cent of the workforce.

He says he would like to hire more Greenlanders, but that doing so is difficult.

“It is very difficult to find people to work for us, because if we hire people from South Greenland, we will be taking them away from our subcontractors,” he says.

The mining company recently signed a mandatory agreement with the municipality on its local impact. Under the agreement, the share of Greenlandic workers must rise to 50 per cent by 2028.

Olafsson already acknowledges that meeting the target could be difficult.

“I warn people that we probably cannot get higher, because I cannot see that there are enough people available,” he says.

If the company fails to meet the targets, it will have to pay 100,000 kroner to Greenland’s resource fund for every percentage point it falls short. Olafsson says he hopes that will not happen.

“Right now, we are meeting our target, but over time all we can do is show how we are trying to solve this. I think it would be unfair if we ended up being fined for it,” he says.