The governments of Denmark and Greenland have signed uranium export agreements that address the regulation of future mining and export of the commodity from Greenland.
The agreements reaffirm Greenland's full authority over its natural resources including environmental, health and safety at any uranium (or thorium) production facility in Greenland.
They also establish a framework under which Denmark will assume responsibility for nuclear non-proliferation and safeguards matters.
The system will ensure that only states which are a party to the nuclear non-proliferation treaty and which enter appropriate nuclear cooperation agreements with Denmark can receive uranium exported from Greenland.
The development is a positive step in the international standardisation of Greenland's uranium materials industry and has supported Greenland Minerals' valuation since the company flagged progress on this front in late December.
The Danish government is expected to introduce a bill on nuclear safeguards by mid-2016, with related legislative proposals set to coincide with this progress in Greenland.
The agreements between Greenland and Denmark regarding radioactive materials regulation add confidence to the local support Kvanefjeld has already enjoyed in its development process to date.
Late last year, the Greenland government approved Kvanefjeld's public pre-hearing white paper and terms of reference, making the proposed mine the first project in the country to go through this public input and awareness process.
The milestone bodes well for the pending mining licence application since the clearance implies both government support and company meticulousness in project design.
The process route has been rigorously developed, and both concentrator and refinery circuits have been successfully operated at pilot plant scale.
The decision of the Greenland and Denmark governments are a welcome development for Greenland Minerals since it strengthens the country's authority over its natural resources while providing a modern framework for the export and sale of uranium for the growing international fleet of nuclear electricity plants.
These developments constitute major progress on Greenland's capacity to produce and export uranium, and as such, firm confidence in Kvanefjeld.
International standardisation of Greenland's regulation agreements between Greenland and Denmark concerning uranium production and export will underpin Kvanefjeld's business model as operations get underway.
Also, the Greenland government's recent sense of urgency to modernise its country's uranium policy suggests a growing understanding that this macro market is set for increased investment and growth opportunities.
In this context, pending permits for the project (including a mining licence application) represent significant potential price catalysts for Greenland Minerals, which has seen its stock rise 43% since mid-December.
Kvanefjeld is likely to be amongst the industry's lowest-cost producers of critical rare earths (after by-product revenue streams).
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