Greenland Minerals and Energy has the controlling interest in the Kuannersuit project

The legal assessment shows that Greenland Minerals and Energy has the controlling interest in the Kuannersuit project

The Mineral Resources Authority has assessed the agreement between Greenland Minerals and Energy (GME) and a Chinese investor. The assessment shows that the Chinese investor has no controlling interest in GME.

In the autumn there were reports that the Kuannersuit project risked being transferred to a Chinese investment company. The reports argued that an agreement between GME and Leshan Shenghe Rare Earth Co. Ltd. on the sale of 12,5% of GME’s shares to Leshan Shenghe contained a provision that the latter has the right to acquire the controlling interest in GME at a later point.

Deputy Minister, Jørgen T. Hammeken-Holm, says: However, as a governmental authority, we have the right and duty to ensure that the regulations of the Mineral Resources Act are respected in matters like this. The Mineral Resources Act clearly states that the exploration licences such as that of the Kuannersuit project cannot be transferred to others without the approval of the Government of Greenland. This also applies to indirect transfers where the licence may be in the same company, but the controlling interest in the company is changed, he explains.

The Ministry of Mineral Resources has been in contact with GME to investigate the case properly. An agreement was made with an external law firm which specializes in business acquisitions, to go through the agreement between the parent company and Leshan Shenghe Rare Earth Company on behalf of the Ministry of Mineral Resources.

Deputy Minister, Jørgen T. Hammeken-Holm, says: The work related to the assessment is now over and the legal assessment is clear: The agreement does not give Leshan Shenghe the right to take over the controlling interest of the parent company GME. The agreement only gives Leshan Shenghe the right to acquire 12,5 % of GME. The controlling interest of GME’s Greenlandic subsidiary remains with the parent company: Greenland Minerals and Energy Ltd.

This assessment has nothing directly to do with an assessment of GME’s application for exploitation.

 

For further information, please contact:

Deputy Minister, Jørgen T. Hammeken-Holm, e-mail: joeh@nanoq.gl, phone: +299 34 68 46