Mining Company Greenland Ruby Declared Bankrupt
The picture shows the area where Greenland Ruby has activity. (Photo: LNS).
The LNS-owned mining company Greenland Ruby is bankrupt. Greenlandic authorities are now investigating the possibility that future operations of the ruby mine can continue. The company has struggled with a difficult financial situation over time.
On 24 September 2024, Greenland Ruby A/S was declared bankrupt. This is stated in a press release from the Greenlandic government, Naalakkersuisut.
The company's management has long tried to save the company through a moratorium on payments, but this has not been possible, the press release notes.
"This bankruptcy petition does not come as a surprise. There has been a reduction in activity around Greenland Ruby for a long time," says Naaja Nathanielsen, Minister of Industry, Trade, Mineral Resources, Justice and Equality.
Difficult financial situation
As High North News has reported, mining operations in Greenland were temporarily closed at the end of 2022 to reduce the company's ongoing costs.
In August 2024, the board of directors of Greenland Ruby decided to apply for a reconstruction of the company, in an attempy to avoid bankruptcy. In this connection, it emerged that the ruby company did not achieve sufficient income to manage the company's debts. Increased interest rates, inflation and the high cost of living have made the market significantly more demanding in the past years," commented Arnt Eirik Rørnes, CEO of Greenland Ruby.
Nathanielsen of the Greenland government adds that the work on a solution has now entered another phase, where administrators have now been appointed for the bankruptcy estate.
– The Government of Greenland will continue the close dialogue to find the best solutions to the situation. In this situation, it is important for the Government of Greenland to secure the company's remaining assets, including securing the company's inventories both at home and abroad," Nathanielsen adds.
Several potential buyers have shown interest
The majority owner of Greenland Ruby is the North Norwegian construction company Leonhard Nilsen & Sønner Eiendom AS (LNS), through the holding company LNS Mining AS.
"It is too early to say whether we will be involved in getting it up and running again," comments CEO Frode Nilsen of LNS to Norwegian newspaper Vesterålen Online.
"During the suspension of payments, several potential buyers have shown interest in taking over and continuing ruby production in Greenland. In close cooperation with the administrators, the Mineral Resources Authority is now investigating the possibility that a future Greenlandic ruby production can continue. If an interested buyer is found, the authorities will assess whether the buyer has the necessary financial capacity and technical knowledge to continue ruby production, writes the Greenland government.
Greenland Ruby
The majority owner of Greenland Ruby is Leonhard Nilsen & Sønner Eiendom AS, through the holding company LNS Mining AS.
The LNS group has been involved in ruby mining in Greenland since 2013, first as a contractors, then as the largest shareholder of Greenland Ruby in 2016.
Today's owners have invested close to NOK 1.5 billion in Greenland Ruby. According to the company, these investments have essentially been amortized.
