Analysis: Did the Danish PM prevent a Chinese acquisition on Greenland?

A Chinese company was apparently prevented from buying a disused defense station in Greenland. There are increased signs that the Danish PM was personally involved in the process.

(Dansk versjon av denne analysen finner du her)

The Danish PM Lars Løkke Rasmussen has allegedly personally intervened to prevent a Chinese company from acquiring an old, disused military station in Greenland that was up for sale.

The Danish intelligence service has worried for some time about the prospects of a larger Chinese presence in Greenland, but this may be the first instance where we learn that the Danish government has directly prevented a Chinese acquisition on Greenland.

The matter has presumably been kept secret until now, as it may cause irritation both in Beijing and in Greenland. The Greenlandic Self-rule authorities have been working for years to attract Chinese investors, a.o. through a number of ministerial visits to China. This is not likely to become any easier if the involvement of the Danish PM in the current case can be firmly established. Additionally, in Nuuk, there are worries that the Danish Ministry of Defense has failed to inform Greenland’s Self-rule government.  

According to the Greenlandic newspaper Sermitsiaq, the Chairman of the Self-rule government, Kim Kielsen, said in a press meeting last Friday that “the Danish government should have given this information to Naalakkersuisut before it hit the press, that Grønnedal once again will be located at the fleet station.”

The Self-rule government is now investigating the matter further.

New needs

 The news of the PM’s possible role broke when the Danish online media defencewatch.dk last week quoted five anonymous sources who all confirmed that PM Lars Løkke Rasmussen in the spring of 2016 contacted the leaders of the five political parties behind the current political compromise covering the Danish defense budget.

According to defencewatch.dk, the PM asked for the party leaders’ support for a plan that involved taking the old fleet station at Grønnedal in southern Greenland off the market and putting it back in use by the Danish defence forces in Greenland. Why? Because a Chinese corporation, General Nice Group, had appeared among the few interested buyers of the station in Grønnedal. By inventing a need of the Danish Defense, Denmark could conveniently prevent a Chinese acquisition, and Lars Løkke Rasmussen allegedly received the party leaders’ approval.

The PM’s office has neither confirmed nor denied this chain of events, however, a number of details have appeared that seem to support the anonymous sources of defencewatch.dk.

The Danish Defense Ministry in June 2016 published a very extensive analysis that had taken more than three years to work out and which detailed all the Danish Defense’s needs in the Faroe Islands and Greenland for the coming years. The report did not mention any need for a re-opening of Grønnedal.  The station was shut down in 2014 and all functions transferred to the new Arctic Command in Nuuk.

The local inhabitants in southern Greenland have since recycled some of the materials from the station, which according to defense sources appears more or less derelict. The Defense has prepared a demolition of the station for two years, and former Defense Minister Peter Christensen in a meeting of the Danish Parliament on 28 January 2016 said that “The MoD has no need for or desire about continuing Grønnedal – neither fully or in part.”

All this appears to have changed with PM Lars Løkke Rasmussen’s intervention. As the five parties in the coalition group in December this year entered into a new agreement about allocations to the Defense’s work in the Arctic, a new need had now arisen to “re-establish the Defense’s presence in Grønnedal in the form of a strategic and logistical point of support, which can be used partly for storing of fuel, storing of sea pollution prevention materials etc., partly for training and education purposes.”

That echoes a message that the Greenland Self-rule authorities received per email on 30 June 2016. The email has now been published in Greenland, thanks to the media. In this email, the MoD informed the authorities in Nuuk about General Nice Group’s interest in Grønnedal, however, the Chinese interest was not established as the cause of the Defense’s new plans. Nor was this connection mentioned when a Head of Department from the Self-rule authorities met with the Head of Department of the Danish Defense Ministry, Thomas Ahrenkiel, less than two weeks ago, according to Sermitsiaq.

China welcome on Greenland

General Nice Group has earlier been welcomed to Greenland. The corporation acquired the rights to a significant deposit of iron ore by Isua, north of Nuuk, late in 2014. A British company, London Mining, had had plans about establishing one of the largest mines in the history of Greenland here. A couple of thousand miners, Chinese included, were to extract iron ore for the Chinese steel factories, however, London Mining went bankrupt and sold to General Nice. The Chinese company has since stated that it has no current plans of reviving the project, as the world market is rather unfavorable at present.

The intervention of the Danish state has now prevented General Nice from expanding its engagement in Greenland at Grønnedal. This may be a direct consequence of the worries of the Danish intelligence services. They worry that Chinese companies shall grow so economically significant in Greenland that they can manipulate the smaller and financially weaker Greenland Self-rule authorities.

Nuuk has dismissed this fear as unsubstantiated. Naalakkersuisoq (Minister) of Foreign Affairs, Vittus Qujaukitsoq, at a commodity conference in Denmark in October, confirmed that Chinese investors are as welcome to Greenland as any other investors. Vittus Qujaukitsoq is a frequent guest in China a.o. at an annual Chinese mining fair. Earlier this year he visited the Chinese company Shenghe Resources, which has acquired 12.5 % of a mining project aiming to extract uranium and rare earth minerals in the Kvanefjeldet Mountain in southern Greenland. Danish diplomats have frequently assisted the Greenland Self-rule authorities’ work in China.

Meanwhile, the Danish Defense’s intelligence services have carefully followed Chinese investments in Greenland. It is, therefore, not unlikely that Lars Løkke Rasmussen has acted on advice from these services. The fate of a small, disused military station in Greenland would not normally be a matter for the PM unless there was significant new information. It may be worth noticing that the present Head of Department at the MoD, Thomas Ahrenkiel, is a former Director of the Danish Defense Intelligence Service and also former key member of staff at the Prime Ministers office.

Built by the USA

 Grønnedal today consists primarily of a number of wooden barracks and simple port facilities. The American defense built the base in 1942, during WW2. American troops defended a nearby mine at Ivittuut, where a Danish company extracted cryolite, a mineral that was decisive at the time for the production of aluminium, which in its turn was decisive for the production of American fighter planes that were to be used in Europe. The base was later transferred to Denmark. Until 2012, it served as headquarters for the Danish defense forces in Greenland.

Martin Breum is a Danish journalist and writer. He writes about the Arctic in Danish and Greenlandic media. www.martinbreum.dk