Dundas: inside the world’s highest-grade ilmenite deposit
Bluejay’s proposed Dundas ilmenite mine in Greenland ticks a number of boxes, from financial attractiveness to local support, and it could help accelerate mining projects in one of the world’s least-developed mining jurisdictions. JP Casey learns more.
I lmenite is the primary ore of titanium metal, and its importance is only growing with time. As the global demand for titanium has increased rapidly over the past five years, with sponge shipments and exports of titanium scrap increasing 20% and 14% respectively between 2018 and 2019, the value of ilmenite has increased in response. The ore’s price has almost doubled, from around $110 per tonne in early 2016 to close to $200 per tonne in late 2019, as demand for the versatile metal, used in everything from aerospace projects to biomedical devices, remains high.
One company eager to develop its titanium infrastructure is Bluejay Mining, a London-headquartered firm that has invested heavily in Greenland and Finland, trying to establish mining operations in countries without large-scale mining infrastructure. Among the company’s projects is the Dundas ilmenite mine, a proposed sand mining facility on the west coast of Greenland that is expected to produce 440,000 tonnes of ilmenite concentrate a year once production begins.
The facility has received support from both local people and the Greenland Government, and has successfully completed both environmental and social impact assessments. The way is now clear for the final stages of an application for the mining licence that will enable construction, and commercial production, to begin in the future. Bluejay is hopeful that this support will translate to a project that could deliver on its great economic potential, without damaging local communities or the environment.
// 3D System Model and Completed Installation. Credit: Deimos
An attractive deposit
“If you stand back and you look at all of the implied resources on this project, you get to a figure, I think it's greater than 700 million tonnes, but I think the exact figure is 730 million, and that could be a sort of a multi-decade mine life of a medium-value bulk commodity,” explains Roderick McIllree, managing director at Bluejay. “I think that they see this as being a generational mine.”
The mine also boasts attractive profit margins, should the finances line up as expected. The miner reports total capital expenses of $245m, compared to a potential selling price of $232 per tonne of ilmenite mined, making the project one of the more financially lucrative new mines in the world.
In addition to the raw materials and monetary gain on offer, there are also significant benefits for local employment and infrastructure that the miner is eager to take advantage of. Bluejay estimates that 270 new jobs will be created in the construction of the mine, and a further 175 positions in its operation. The company says it will aim to employ local workers where possible to ensure that these lucrative financial benefits make their way back to the local community.
Because of the benign environmental footprint, the impact from this project is very well understood to be very low.
The miner will also work with the Greenland School of Minerals and Petroleum to develop training programmes for local students, aiming to deliver meaningful, long-term change to the region affected by the mine.
These social impacts are echoed by the minimal environmental impacts of the project, which McIllree called “benign,” as the mining process itself – removing sand, extracting desired minerals, and replacing the sand in-situ – means that the mine is expected to wreak much less environmental damage than would normally be expected of a mine this size.
Greenland’s Environmental Agency for Mineral Resource Activities accepted Bluejay’s environmental impact assessment (EIA) as compliant with regulations as of February 2020, so these minimal environmental impacts have been well-understood for some time now.
“I think that what both the EIA and the social impact assessment (SIA) [show is that], because of the benign environmental footprint, the impact from this project is very well understood to be very low, if not benign,” explains McIllree. “That was the general theme that came back from stakeholder engagement and both the EIA and the SIA, that this project was a net benefit to Greenlandic society.”
Unique Greenlandic challenges
Yet challenges remain for the miner, with the remote location of the proposed mine site providing both logistical and economic obstacles. Working in an environment such as Greenland, where there is not a long history of mining development, means that many mineral resources are available for exploitation but, by the same token, they are harder to access than deposits in countries where mining is an entrenched industry.
“The real cost to the emerging minerals exploration sector up there is that the logistic hubs are quite remote, and the further away you go from those population hubs, the more your cost goes up in orders of magnitude, almost per kilometre,” explained McIllree.
The lack of local infrastructure is perhaps best exemplified by the plight of the nearby town of Moriusaq, which was established in 1963 but was declared a closed settlement in 2012. With the settlement’s population having reached zero, would-be mining projects in the region were deprived of a local town to provide basic infrastructure needs and from which to recruit local workers.
The real cost to the emerging minerals exploration sector up there is that the logistic hubs are quite remote.
The extreme seasons in Greenland also provide a unique geographical challenge, with long winters making work impossible for several months of the year, placing additional pressure on Bluejay to make the most of the months that it has to work on the project.
“What you need to do is make sure that when you do things up there, you do them right, so that you don't have to do them a second time, and you do as much of it as you can because of the seasonal aspect of activity in Greenland,” says McIllree.
These concerns also place additional economic strain on the project. Factors such as remoteness and seasonality are not deal-breakers for the mine but will require additional up-front costs to overcome issues not present in other mining jurisdictions, a phenomenon that McIllree noted could ultimately hamstring the mine’s long-term profitability.
“As an active explorer, [what we] can do is lever off all of that existing data to bring down those initial costs,” he explained, referring to extensive geological mapping work done by the Geological Survey of Denmark and Greenland, which Bluejay has taken advantage of. “But it can be 'netted out' later on when you have to do more work to get the project into production, because of the environmental considerations, with working in the Arctic pristine wilderness, and biodiversity in general.”
A supportive mining framework
The work of the Geological Survey, however, is strong evidence of what McIllree considers to be a supportive mining framework from the government down, which makes Greenland an attractive investment opportunity despite these challenges.
“The Government of Greenland has given dispensations with respect to the commitments and the obligations and the licence years of companies having to work in Greenland because of external economic outcomes,” he explains. “For example, in 2008, when the crash happened and [for] several years after they paused all of the exploration companies' commitments to spend on licences, [and] they did that this year as well.
“So taken as a whole, with respect to the political stability and the low sovereign risk when you take ten years’ worth of that cumulative situation, compared to any other jurisdiction in the world, maybe bar a few, Greenland really always registers quite highly on these jurisdictional mining surveys, because of these bigger picture [factors].”
This supportive backdrop extends to local people and groups as well, with Greenland’s resources minister Jens Frederick Nielsen noting that there was “considerable support from local citizens” for the mine, while environment minister Jess Svane noted that there was unlikely to be any significant environmental damage resulting from the project.
Greenland really always registers quite highly on these jurisdictional mining surveys.
This support could reflect a growing interest in mining in Greenland, where the financial benefits for the government, and employment benefits for local people, are beginning to outweigh concerns of environmental damage or foreign intrusion. The plight of settlements such as Moriusaq could now serve as a cautionary tale for others in remote parts of the country, pushing people towards the security and stability of large-scale industrial projects.
The government is also eager to leverage a unique position within global mining geopolitics. With resource security now more important than ever, and Greenland being the only titanium producer within the EU, the region could be set for increased attention from miners and industrial actors across the continent.
McIllree explains: “We believe that [there will be] EU funding for titanium development within the EU, of which Greenland kind of broadly orbits through its relationship with Denmark, and titanium has just gone on to the list of metals at risk for securities of supply in their white paper. There will be, in my mind, European and North American funding that goes into Greenland; Exim Bank just announced a letter of intent with IronBark in north Greenland for $308m to develop a zinc mine.”
Bluejay is optimistic that the mine will help deliver local and international benefits as the world’s industrial industries look towards new, unexplored regions to meet their mineral needs. The Dundas project may ultimately prove to be that rare facility that combines local support, financial benefits, and safe environmental stewardship.
// Main image: 3D System Model and Completed Installation. Credit: Deimos