Discover more from Learning by Proxy with Vivek Srinivasan
As climate change makes this island peep out of the snow, vultures are already circling to feast on the bounty it has to offer.
A tradable financial asset is called a security. Given the amount of volatility in the crypto space, all crypto-currencies should probably be called insecurity.
That is the joke for the day.
Moving on to other plunders.
They say Greenland is not green and Iceland has no ice.
It is true that Iceland is a sea of black lava fields. It also happens to be a country where you can see everything that you learnt in terms of Geographic phenomena. From glacial lagoons to lava tubes to river valleys, gorges, aurora and much more.
If there is only one place on this planet you can visit, visit Iceland.
If you look at Greenland on any world map, it is often painted in white. It is an island that used to be buried in many feet of snow. That snow is beginning to melt and Greenland is turning green. Not for long.
The story of almost every European Arctic island is one of nordic conquest. Svalbard, Iceland, Ireland, England and Greenland.
Iceland became independent but Greenland continues to be a part of the Kingdom of Denmark. Way back in 1867, a couple of Senators from America even made an offer to buy Greenland from Denmark and were rebuffed.
Following the Second World War American interest in Greenland was again at a high. As a convenient stopover in the middle of the Atlantic, Greenland offered a shortcut to attack Russia from over the North Pole. It also provided a way to reach Europe quickly. While Denmark did not sell the island, it allowed the use of its airport as a part of NATO.
When a couple of years back Donald Trump suggested that America should buy Greenland, neither was it unprecedented nor was it surprising given the source; someone who had suggested drinking Chlorox as a possible cure for COVID.
His suggestion was founded on good reasoning.
With global warming and the melting ice, Greenland is becoming quite interesting to many. Greenland is a huge source of Rare Earth Metal (REE) Deposits.
Greenland is endowed with several large REE deposits in various geological settings. The largest deposits by far are hosted in peralkaline intrusions related to the Gardar Province in south Greenland, encompassing the deposits around Kvanefjeld, Kringlerne, and Motzfeldt Sø. Additionally, four carbonatite-related REE deposits are known from the west coast, and one alkaline intrusion (Kap Simpson) and one palaeoplacer deposit (Milne Land) are located in east Greenland. The first scientific descriptions of REE minerals in Greenland were carried out by K L Giesecke in 1806, who described the minerals arfvedsonite, eudialyte and sodalite in the Ilímaussaq complex
Of course, there are a number of companies that are lining up to exploit these resources. Companies from the US to Australia to China are lining up to extract these resources promising economic growth to the nation. Greenland today is heavily dependent on the budget that it receives from Denmark, if it could pump up its tax revenues, it could potentially break its umbilical cord with Denmark.
Greenland Minerals Limited (GML), the Australian company developing the mine, said that the country would receive $240 million (€201 million) in taxes and royalties annually over the mine's planned 37-year lifespan. GML's biggest stakeholder is Shenghe Resources Holding, a Chinese rare-earths processing company.
For an economy largely dependent on fishing, tourism and a $600 million annual subsidy from Denmark, resource exploitation is seen as a way to boost government coffers and provide a path to independence. Polls indicate support for secession from Denmark. One carried out in 2018 by researchers from the University of Copenhagen found around 67% of respondents supported an independent Greenland at some point in the future.
"It is not certain that the Kvanefjeld mine project will never be realized," said Mikaa Mered, a lecturer on Arctic affairs at HEC business school in Paris. "If the Siumut party returns to power in the future, the struggle for independence could still be played through the uranium mines."
In some ways, Greenland is cheering for Climate Change and sees it as a positive thing. In the meantime, there are those who are using it as a climate hedge.
Before I proceed further, let me explain how hedging works.
A hedge is an investment that is made with the intention of reducing the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting or opposite position in a related security.
To the uninitiated hedging is scoring on both sides. It is like going and betting on both teams. Either way, you will win some.
Bill Gates published a book titled ‘How to avoid a climate disaster’. You would be forgiven for thinking that he is concerned about climate change and the future. Now to demonstrate how a hedge works.
KoBold Metals, a startup backed by Bill Gates’s Breakthrough Energy Ventures that aims to use artificial intelligence to find metals needed for the electric-vehicle boom, raised $192.5 million in its latest financing round, according to two people familiar with the matter.
Investors in the Series B funding round for the Berkeley, Calif., company included Sam Altman’s Apollo Projects and Mary Meeker’s Bond Capital as well as mining giant BHP Group and the Canada Pension Plan Investment Board, Canada’s largest pension fund, one of the people said.
Source: Wall Street Journal
KoBold is hoping to exploit Greenland.
While there are clear signs of the existence of rare earth metals on Greenland, nobody knows how much of it exists because a large portion of the land has never been exposed to humans. These metals are used in everything from the batteries that you use to electronics, magnets, aerospace and energy technologies. Finding a huge deposit could generate huge fortunes. It can result in another gold rush. Every Billionaire is buying a lottery ticket.
Jeff Bezos, Bill Gates, and Michael Bloomberg are amongst the world’s richest billionaires who are funding the mining of critical minerals including Nickle and Cobalt on the west coast of Greenland in a bid to accelerate the green energy transition amidst the growing climate crisis in the region, according to a report by CNN. The island nation is currently facing the melting of ice at an unprecedented rate.
When Bill Gates ‘philanthropy’ ‘incubated’ a vaccine for COVID-19, he did not allow them to publish the results to the world and instead cut a deal with AstraZeneca. In the midst of the worst pandemic the world had seen in a century, he blocked the Oxford team from open-sourcing what was done under a philanthropic grant.
Sure, he is looking for these metals only to accelerate the green energy transition.
But it does not end with that.
Sand is both abundant and rare. Earth has vast deserts of the stuff, of course, but not the kind that’s in such high demand that sand mafias are killing for it. That special variety is a critical component of the concrete used in buildings and infrastructure, the production of which has skyrocketed exponentially over the last few decades. That has come at a significant climate cost: The industry now accounts for 8 percent of global carbon emissions.
Sand is also at the center of a strange climate story. Climate change is destroying Greenland’s ice sheet, producing an extraordinary amount of meltwater. (Even if we somehow totally stopped emissions today, Greenland’s melting could still contribute nearly a foot of sea-level rise.) And in a twist of fate, that meltwater is loaded with the right kind of sand for concrete production, which causes more warming and more melting. Great plumes of glacial sediment are swirling along the coast, actually adding land along the edges of the island. Even though Greenland is only three times the size of Texas, its ice sheet is the source of 8 percent of suspended river sediments flowing into the oceans.
Either way, there is one corner of the planet which is not filled with dust and billowing smoke from industrial exploitation. That is going to change. Soon!