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All eyes on Greenland Minerals and Energy in 2010

With the recent positive political developments in Greenland, Greenland Minerals and Energy (ASX: GGG) is forging ahead with plans to become a "world class mining operation in southern Greenland".

And the investors are starting to take notice too.

Following an announcement earlier this week, the company responded to a query from the Australian Securities Exchange after shares in the company jumped.

The statement by the company referred to news that the Greenland Mineral Resources Act had come into effect on New Year's Day, meaning all future decisions regarding the minerals resources of Greenland will be made by the Greenland Government, rather than the previous situation of joint control by Greenland and Denmark.

The share price is around the 83c mark.

The Australian-listed company is targeting Greenland, one of the world’s last natural resource frontiers, and aims to identify large mineral deposits with the potential to underpin long term, economically robust mining operations.

The company's flagship project is Kvanefjeld, which is rapidly growing to become one to the world’s largest undeveloped deposits of rare earth elements (NYSEMKT:REE), uranium and naturally occurring sodium fluoride, commodities with long term forecasts for strong demand increases.

Rare earths are defined as 17 metals that are considered critical in the development of low-carbon technology from wind-turbines to hybrid car batteries.

The project is located on the South West tip of Greenland, within the Ilimaussaq alkaline intrusive complex, and on present parameters.

Managing Director Roderick McIllree said the company viewed the approval of the Mineral Resources Act as a key milestone for Greenland on the company's path to self rule.

"The next step on this path would be the complete handover of mineral and oil rights from Denmark to Greenland, a process expected to be completed in the near future," Mr McIllree said.

"The company looks forward to the continued constructive dialogue with all Greenlandic stakeholders regarding the development of the multi-element Kvanefjeld Project and will keep the market informed as to developments," Mr McIllree said.

A recent upgrade to the JORC inferred resource estimate at Kvanefjeld, increased resources to 4.9mt Mt rare earth oxide @ 1.1% REO and 283 Mlbs @ 208 ppm U3O8. 79% of the resource is in the indicated category.

Last month, the company foreshadowed the release of the results of its prefeasibility study into the Kvanefjeld multi-element project.

A prefeasibility study began in late 2008, drawing on historical studies and is at present only available to the company in draft form and has not been reviewed by the Board. The focus is on defining a process route to extract the elements of interest from the multi-element ores in an economically viable and environmentally responsible way.

In 2010, Greenland hopes to increase community and governmental interaction to demonstrate how the development of Kvanefjeld would benefit Greenland.

Recent media reports indicate Britain and other Western countries risk running out of supplies of certain highly sought-after rare metals that are vital to a host of green technologies, amid growing evidence that China, which has a monopoly on global production, is set to choke off exports of valuable compounds.

Failure to secure alternative long-term sources of rare earth elements (REEs) would affect the manufacturing and development of low-carbon technology, which relies on the unique properties of the 17 metals to mass-produce eco-friendly innovations such as wind turbines and low-energy lightbulbs.

China, whose mines account for a whopping 97 per cent of global REE supplies, is trying to ensure that all raw REE materials are processed within its borders. During the past seven years it has reduced by 40 per cent the amount of rare earths available for export.

China's Ministry of Industry and Information Technology announced recently that it will create a reserve for rare earth metals next year.

Although not without risk and share price volatility, at current valuations, investors should view Greenland Minerals as an interesting investment opportunity in the supply-constrained global rare earth market.

Disclosure: The author holds no positions in the company