26.11.08 Menas Associates Greenland votes for greater autonomy

The results from yesterday's referendum have revealed that an overwhelming majority – 75.4% - of the country's very small electorate of 39,000 have voted in favour of independence from Denmark.

Greenland has been semi-autonomous since 1979 but the new proposal, negotiated earlier this year, will see a number of further changes – one of the most significant being that the island will gain the rights to potentially highly lucrative Arctic resources.

Copenhagen has the overriding authority for both foreign and defence policy and, although that does not look set to change, Greenland will be consulted to a greater degree than previously.

Although the outcome was hailed by many, including the head of Greenland's government Hans Enoksen, others have been sceptical. Many feel that Greenland is “not ready to take on these new responsibilities”. Lars-Emil Johansen, who was Greenland's Prime Minister from 1991 until 1997 was quoted as saying that “self-rule will bring with it only good things for Greenland”, a view held by most of the parties in local parliament. But the Democrats have spoken out against independence, with politician Finn Lyng saying that “with such a tiny population it is impossible to provide the human contributions needed to turn Greenland into a modern and independent state”.

Such concerns may stem from the fact that in 2007, approximately 30% of Greenland's GDP came in the form of subsidies from Denmark. In the event of self-rule, the Danish-Greenlandic commission has suggested that, in return for granting the island control of resources and therefore the revenue raised from any exploration activities, the annual subsidies from Copenhagen would have to be reduced.

Greenland's new status will not take effect until the 21st of June 2009.

Avannaa Resources Ltd, a junior mining exploration company whose focus is on diamonds and gold from Greenland's west coast, have kindly allowed us to upload the attached presentation which is an excellent primer on Greenland and its oil and mining potential.

Open file...