The Greenland Parliament has passed a bill banning uranium mining and exploration in Denmark, effectively halting the development of the Kwanade rare earth project, one of the world's largest rare earth projects.
The project was developed by (ASX: GGG), an Australian Greenland mining company. It received preliminary approval in 2020 and is expected to receive final approval from the previous government.
Although the miner has not made a statement on the matter, its shares were suspended on Wednesday pending an "announcement". In a notice to the Australian Stock Exchange, it said trading would be suspended until Friday morning or the company's announcement.
The decision to ban uranium mining and exploration follows the campaign pledge of the ruling left-wing party in April, which publicly expressed its intention to block the development of the Kvanefjeld project because of the presence of silver-gray radioactive metals as a by-product.
The law, passed by parliament on Tuesday night, is in line with the strategy of the new coalition government to focus on promoting environmental protection in Greenland.
It forbids the exploration of deposits with uranium concentrations higher than 100 (ppm) per million, which the World Nuclear Association considers to be very low.
The new rules also include the option of banning the exploration of other radioactive minerals, such as thorium.
Greenland is a vast Arctic self-governing territory belonging to Denmark and its economy is based on fisheries and subsidies from the Danish Government.
As the polar ice melts, miners are increasingly interested in the mineral-rich island. They are looking for any mineral, from copper and titanium to platinum and rare earths, which are needed for electric car engines and the so-called green revolution.
Greenland currently has two mines: one for plagioclase, whose deposit contains titanium, and the other for rubies and pink gems.
Prior to the general election in April, the island had issued a number of exploration and mining licences with a view to diversifying its economy and eventually achieving its long-term goal of independence from Denmark.
The US government recently provided Greenland with an economic aid package as part of the Joe Biden administration's efforts to ensure the supply of key minerals, especially rare earths, from outside China.
Former President Donald Trump has offered to buy the Arctic Island to help address China's dominance of the rare earth market.
China accounts for nearly 80 per cent of the world's mining of rare earth elements, from high-tech electronics to military equipment.