TABLE OF CONTENTS
PART 1. THE DISPUTE
Requests for Relief
The Kvanefjeld Project
Introduction to the legal framework
Greenlandic and Danish Government authorities
The licensing process in practice
Introduction to radiation protection
DETAILED STATEMENT OF FACTS
Early exploration at Kvanefjeld
The so-called 'Zero Tolerance Policy'
Grant of exploration licence to Rimbal (2005)
GM acquired interest in Kvanefjeld licence from Rimbal (2007)
GM's early exploration activity at Kvanefjeld
2008 Uranium Report and proposal to lift the ZTP
Brief Outline of the Current and Future Status of Uranium Exploration and Exploitation in Greenland (January 2009)
Field season 2009
Political developments (mid-2009)
Exploration Licence renewal (March - April 2010)
2010 Amendment to the Standard Terms
GEUS and NERI Factbook (September 2010)
Naalakkersuisut visit to Canada (September 2010)
Community engagement and pre-consultation on ToR
ToR for the EIA and SIA (2011)
Negotiation of Addendum No. 1
Events following Addendum No. 1
GM meetings with Government representatives (February - March 2012)
Completion of pre-feasibility study (April 2012)
IA Party Government progress towards lifting ZTP
GM acquisition of 100% of the Project (October 2012)
Establishment of Uranium Working Group and Rastof Committee (late 2012)
Greenland general election (12 March 2013)
UWG fact-gathering process and Lett Report (2013)
GM meetings with the Government (May - August 2013)
Parliamentary process for abolition of the ZTP (July to September 2013)
UWG Report (October 2013)
Greenland Parliament decision to lift the ZTP (8-25 October 2013)
Dr Mair meeting with Deputy Minister of Mineral Resources (29 October 2013)
Development of Enabling Legislation for uranium exploitation and export (2013- 2016)
GM becomes the 'poster child' of mining in Greenland (2014-2016)
Revised ToR (mid-2013 to November 2015)
EIA and SIA submitted (December 2015)
2015 Exploration Licence Renewal (December 2014 - March 2015)
Feasibility work (2015-2019)
Greenlandic Radiation Protection Act and International Uranium Conventions (December 2015 - June 2016)
Greenland and Denmark enter into Uranium Export Agreements (early 2016) Greenlandic and Danish Parliaments pass Enabling Legislation and work continues on regulatory framework (2016 - 2017)
Government statements about GM's rights and legitimate expectations with respect to the Kvanefjeld Project (2016)
Continuous Government support for the Kvanefjeld Project (2016 - 2018)
Agreement with Shenghe (September 2016)
DCE Report on Environmental Issues (October 2016)
Denmark grants GM permission to export uranium ore (May - June 2017)
Denmark Executive Order for Safeguards (August 2017 - July 2019)
Denmark Executive Order to Protect Workers Against Ionising Radiation (October 2017 - July 2019)
Maritime Safety Study (2016 - 2017)
Exploration Licence extension (2018)
DCE Recommendations for EIA Studies (April 2018)
DCE Report for IAEA Waste Convention and IAEA visit (May - September 2018)
SIA approval (2017 - 2019)
GM's repeated attempts to finalise its EIA (2015 - 2019)
Issues with the EIA process
Public meeting in Narsaq (February 2019)
Exploitation Licence Application (17 June 2019)
Speculation about Shenghe and US interest in rare earths in Greenland (2019)
Amendment to Mineral Resources Act (2019)
Confirmation GM has satisfied requirements of MRA Section 29(2) (August 2019 - April 2020)
EAMRA and the DCE approve the EIA (mid-2019 - late 2020)
Financing the Project
First round of public consultations on the EIA and SIA (December 2020 - February 2021)
Greenland general election (February - April 2021)
Investigations into Addendum No. 1 (April 2021)
Minister for Mineral Resources press release (7 May 2021)
Preparation of Act No. 20 by Poul Schmith (June 2021)
Consultation Bill for Act No. 20 (July 2021)
Submissions on the Consultation Bill (July - August 2021)
Second round of public consultations on the EIA and SIA (late August 2021)
Government Summary of GM Permission
Letter to Minister Nathanielsen (1 October 2021)
Presentation of bill for Act No. 20 to Parliament (5 October 2021)
Poul Schmith legal assessment is provided to the Government (8 October 2021)
Minister Nathanielsen's responses to questions in Parliament (20 October 2021)
Minister Nathanielsen's letter to GM (28 October 2021)
Parliament passes Act No. 20 (30 October - 9 November 2021)
Steps to prepare the White Papers and IBA (December 2021)
Meetings between GM and the Government (December 2021 - February 2022)
DCE comments on EIA White Paper (18 March 2022)
Minister Nathanielsen responds to questions about Poul Schmith legal assessment (21 March 2022)
Request for Arbitration (22 March 2022)
Government purports to terminate licensing process (April - June 2022)
Draft Decision on Exploitation Licence Application (22 July 2022)
DCE Recommendations for Radioactive Waste (June 2022)
Application to renew Exploration Licence (26 July 2022)
Interim Measures phase (July - September 2022)
Renewal of Exploration Licence (December 2022 - February 2023)
Internal Government Legal Assessment (15 December 2022)
Amended exploitation licence application (16 December 2022)
Response to Draft Decision (January - February 2023)
Final Decision on Exploitation Licence Application (1 June 2023)
Naaja Nathanielsen replaces Aqqaluaq Egede as Minister (5 June 2023)
Limitation of liability clause in Tribunal's Terms of Appointment (December 2022 - present)
PART 2. LEGAL CLAIMS
OVERVIEW OF LEGAL ARGUMENTS
The real "lottery ticket" and the rule of law
The scope of this arbitration (GM's modified requests for relief)
Overview of GMs' legal arguments
The general legal framework
(a) Preliminary remarks
(b) The parties have submitted their substantive relationship to Danish and Greenlandic law
(c) International law also applies to the dispute
The sui generis legal framework of the Kvanefjeld Project
(a) Preliminary remarks
(b) The legal framework has been specifically tailored to attract foreign investment
(c) Mining licences are contracts existing within an administrative law framework
(d) The independent nature of exploration licences in the Greenlandic system
(e) GM's Exploration Licence is a contract
Relevant principles of contract law
(a) The duty of loyalty ("loyalitetspligten")
(b) The principle of good faith ("god tro")
(c) The doctrine of implied conditions ("forudsætningslæren")
(d) The principle of fairness and reasonableness ("billighed og rimelighed")
Relevant principles of administrative law ("forvaltningsret")
(a) Introduction to principles of administrative law
(b) The concept of legitimate expectations
CLAIM 1B - RIGHT TO AN EXPLOITATION LICENCE FOR RARE EARTHS, ZINC AND FLUORSPAR
GM's exclusive right to transition from exploration to exploitation
(a) The concept of "exploitation"
(b) GM's right of transition into exploitation...................................................................330 GM's right to an Exploitation Licence for Non-Radioactive Elements
(a) The right to exploit non-radioactive minerals
(b) The right to process/handle residual (non-exploited) minerals
(c) No prohibition against processing/handling radioactive residual (non-exploited) minerals
(d) Examples of handling of non-radioactive and radioactive residual minerals in practice
GM had a legitimate expectation of an exploitation licence for rare earths, zinc and fluorspar
CLAIM 1A - RIGHT TO AN EXPLOITATION LICENCE FOR RARE EARTHS, ZINC, FLUORSPAR AND URANIUM
Contractual and statutory right to an exploitation licence for uranium
(a) The starting point
(b) The ZTP could not affect GM's statutory and contractual rights
(c) Addendum No. 1 extended GM's rights to also cover radioactive elements
(d) The Addendum No. 1 Caveats are invalid or unenforceable as a matter of contract law (e) The Addendum No. 1 Caveats are invalid or unenforceable under public law
(f) Conclusion on invalidity and severance of Addendum No. 1 Caveats
GM had legitimate expectations of an exploitation licence for uranium
(a) Preliminary remarks on legitimate expectations under Section 73 of the Danish Constitution
(b) The Greenlandic and Danish Governments consistently represented that GM would be entitled to an exploitation licence for uranium if it satisfied the requirements
(c) The Greenlandic and Danish Governments consistently represented that the radiological impacts of the Kvanefjeld Project would be evaluated according to international best practice
(d) Conclusion on violation of legitimate expectations for an exploitation licence for uranium
CLAIM 2 - APPLICABILITY OF ACT NO. 20
Act No. 20 does not apply to the extent it is expropriatory
The test for expropriation under Danish law
GM had rights protected by Section 73 of the Danish Constitution
GM is a person whose property rights are protected by Section 73 of the Danish Constitution
The application of Act No. 20 would have the character of a 'surrender' of GM's property rights
(a) The transfer criterion
(b) The general-concrete criterion
(c) The intensity criterion
(d) The causa criterion
(e) Conclusion on surrender
Conclusion on Applicability of Act No. 20
CLAIM 3 - BREACH OF CONTRACT
Breach and liability for damages
(a) General framework for breach and liability for damages
(b) Anticipatory breach and position risk
(c) Burden of proof
(d) Liability of public legal entities
Joint liability of the Respondents
Causation and foreseeability
CLAIM 4 - DAMAGES
PART 3. QUANTIFICATION OF DAMAGES
The applicable standard of damages
GM is entitled to expectation damages
The DCF method is the appropriate valuation methodology
Expert evidence relied on by GM for valuation purposes
(a) Mr Milburn's DCF model
(b) Mr Lambert's technical inputs
(c) Mr Castilloux's price forecasting
PART 4. THE TRIBUNAL'S JURISDICTION
The lex arbitri
The arbitration agreement in the Standard Terms
(a) Interpretation of Section 2002
(b) Interpretation of Section 2001
(c) Legislative history of the arbitration agreement
(d) Contra proferentem
Claims fall within the arbitration agreement
(a) Section 2002 applies
(b) Section 2001 does not apply
(c) Temporal inadmissibility of jurisdictional objection
(d) Substantive inadmissibility of jurisdictional objection
The dispute is arbitrable as a matter of Danish law
(a) The sui generis arbitrability framework of this case
(b) The dispute is arbitrable under wider Danish law in any event
(c) The dispute is arbitrable under the general Danish approach
The Danish Government is bound by the arbitration agreement
(a) Framework for Danish-Greenlandic cooperation on mineral resources
(b) Facts relevant to establish that the Danish Government is bound by the arbitration agreement
(c) Application of legal principles under which the Danish Government is bound by the arbitration agreement
PART 5. SUBMISSION
PART 1. THE DISPUTE
1. This is a case about an Australian-owned mining company, Greenland Minerals A/S, that invested in Greenland to develop the Kvanefjeld rare earths project. In its work on the Project, GM 1 was actively supported by successive Greenlandic and Danish Governments. Through GM's efforts and investment of over US$150 million over the course of more than a decade, the Kvanefjeld Project has been proven to be one of the largest undeveloped deposits of rare earth elements in the world and is currently valued at US$7.5 billion. In the independent valuation that GM has commissioned for the purposes of this arbitration, it is estimated that the total economic benefits that would flow to Greenland (in royalties and taxes) if the Kvanefjeld Project was allowed to proceed would be US$22.8 billion over a 37-year expected life of mine (amounting to over US$400,000 for every member of the population of Greenland).
2. The legal framework for mining in Greenland is based on a combination of a general law (the Mineral Resources Act) and a specific agreement between the Government and the project proponent. GM's agreement with the Government was an exploration licence based on the Greenlandic Standard Terms - this agreement is a concession ("koncession") that creates rights under both private law and administrative law. Both through the general mining legislation and through its contract, GM was guaranteed an exploitation licence if it satisfied certain conditions. In April 2020, the Greenlandic Government formally acknowledged that GM had satisfied these conditions. GM's case is that, as from that date, and by 1 December 2021 at the latest, GM had obtained an unconditional legal right to be granted an exploitation licence for all of the minerals that were covered by its Exploration Licence (rare earths, zinc, fluorspar and uranium) and at the very least an exploitation licence for all such non-radioactive minerals (rare earths, zinc, and fluorspar).
3. However, the Greenlandic authorities effectively shut the Project down after 1 December 2021 through the enactment of politically-motivated, targeted and scientifically unfounded legislation banning all mining activities in Greenland involving uranium at concentrations above the seemingly random and wholly inappropriate threshold of 100 parts per million (Act No. 20, otherwise known as the "Uranium Act").
4. In this arbitration, the Respondents have accepted that Act No. 20 does not apply if its application would constitute expropriation of a protected property right. There is no doubt that, under Danish and Greenlandic law, the right to an exploitation licence constitutes such a protected property right. The central question in this arbitration is, therefore, the existence and content of GM's legal rights to be granted an exploitation licence for the Project as of 1 December 2021, which was the day immediately prior to the entry into force of Act No. 20 (2 December 2021). If the Tribunal finds that GM did have a right to an exploitation licence on that date, it follows that Act No. 20 cannot apply to GM's Exploration Licence or exploitation licence application.
5. In addition, GM asks that the Tribunal determine that the Respondents, through their statements and conduct, have committed breaches (actual and anticipatory) of the Exploration Licence. These questions fall squarely within the jurisdiction of the Tribunal to decide "disputes [...] regarding questions arising out of the licence" and are clearly capable of settlement by arbitration under Danish law.
Requests for Relief
6. Greenland Minerals A/S therefore requests that the Tribunal grant the following relief, and that the Tribunal consider such relief in the sequence described below:
Claim 1 (Rights): The Respondents shall - individually and/or jointly - acknowledge that, as of 1 December 2021 (at the latest), Greenland Minerals A/S had an unconditional right under Section 14 of the Standard Terms (incorporated into Exploration Licence 2010/02, as renewed and amended), Section 29(2) of the Greenlandic Inatsisartutlov no. 7 of 7 December 2009 on mineral resources and related activities (the Mineral Resources Act) (as amended), and/or under legitimate expectations, to be granted an exploitation licence in respect of Exploration Licence 2010/02 (as renewed and amended), with the specific terms for exploitation under such exploitation licence to be agreed between Greenland Minerals A/S and the First Respondent in accordance with Section 16 of the Mineral Resources Act, for the:
(i) Exploitation (i.e., extraction and commercial utilisation) of rare earth elements, zinc, fluorspar as well as uranium with thorium to be handled as a residual impurity only (i.e., products for disposal and non- commercial use) (Claim 1A); or, subsidiarily,
(ii) Exploitation (i.e., extraction and commercial utilisation) of rare earth elements, zinc and fluorspar with uranium and thorium to be handled as residual impurities only (i.e., products for disposal and non-commercial use) (Claim 1B).
Claim 2 (Applicability of Act No. 20): The Respondents shall - individually and/or jointly - acknowledge that Greenlandic Inatsisartutlov no. 20 of 1 December 2021 on the prohibition of prospecting, exploration and exploitation of uranium etc. (Act No. 20) does not apply to Exploration Licence 2010/02 (as renewed and amended), or to Greenland Minerals A/S's applications to be granted an exploitation licence in respect of Exploration Licence 2010/02 (as renewed and amended), with the specific terms for exploitation under such exploitation licence to be agreed between Greenland Minerals A/S and the First Respondent in accordance with Section 16 of the Mineral Resources Act, for the:
(i) Exploitation (i.e., extraction and commercial utilisation) of rare earth elements, zinc, fluorspar as well as uranium with thorium to be handled as a residual impurity only (i.e., products for disposal and non- commercial use) (Claim 2A); or, subsidiarily,
(ii) Exploitation (i.e., extraction and commercial utilisation) of rare earth elements, zinc and fluorspar with uranium and thorium to be handled as residual impurities only (i.e., products for disposal and non-commercial use) (Claim 2B).
Claim 3 (Breach of contract): The Respondents shall - individually and/or jointly - acknowledge that the Government of Greenland has committed the following breaches of Exploration Licence 2010/02, and/or Greenland Minerals A/S's legitimate expectations in that regard, which individually and/or jointly constitute material breach of contract ("væsentlig misligholdelse"):
(iii) Breach of its obligation under Sections 1401-1408 of the Standard Terms (incorporated into Exploration Licence 2010/02, as renewed and amended) to grant Greenland Minerals A/S an exploitation licence in respect of Exploration Licence 2010/02 (as renewed and amended), with the specific terms for exploitation under such exploitation licence to be agreed between Greenland Minerals A/S and the First Respondent in accordance with Section 16 of the Mineral Resources Act, for the exploitation (i.e., extraction and commercial utilisation) of rare earth elements, zinc, fluorspar as well as uranium.
(iv) Anticipatory breach, as of 19 July 2023, of its obligation under Sections 1401-1408 of the Standard Terms (incorporated into Exploration Licence 2010/02, as renewed and amended) to grant Greenland Minerals A/S an exploitation licence in respect of Exploration Licence 2010/02 (as renewed and amended), with the specific terms for exploitation under such exploitation licence to be agreed between Greenland Minerals A/S and the First Respondent in accordance with Section 16 of the Mineral Resources Act, for the exploitation (i.e., extraction and commercial utilisation) of rare earth elements, zinc and fluorspar with uranium and thorium to be handled as residual impurities only (i.e., products for disposal and non-commercial use).
Claim 4 (Damages): The Respondents shall pay damages to Greenland Minerals A/S on an individual (pro rata) and/or joint basis for an amount to be proven in this arbitration.
Claim 5 (Costs): The Respondents shall bear their own arbitration costs, including legal fees, fees and expenses of the Tribunal and any experts, as well as any other costs. The Respondents shall reimburse Greenland Minerals A/S for its arbitration costs, including legal fees and expenses, fees and expenses of the Tribunal and any experts, as well as internal costs, with addition of interest in accordance with Sections 5(1)-(2) of Danish Act no. 459 of 13 May 2014 on interest and other matters concerning delayed payment (the Interest Act) from the date of the Tribunal's final award in this arbitration until payment in full.
Claim 6 (Jurisdiction): The Tribunal shall assume jurisdiction with respect to both Respondents, subsidiarily with respect to the First Respondent only, concerning the present dispute.
Claim 7 (Other Relief): The Tribunal shall order any other relief which the Tribunal considers appropriate in order to support the relief sought by Greenland Minerals A/S under Claims 1-6.
7. Claim 1 (Rights) concerns the main issue in this arbitration, namely the extent to which GM had a right, as of 1 December 2021 (i.e., the day before entry into force of Act No. 20), to be granted an exploitation licence for certain minerals. Claim 1A is the primary claim ("principale påstand"), while Claim 1B is the subsidiary claim ("subsidiære påstand"). As explained and documented extensively in the present pleading, Claim 1 is necessary because the Government of Greenland has so far denied that GM holds any unconditional right to be granted an exploitation licence in respect of its Exploration Licence. The Government of Greenland has stated that this view is regardless of whether or not Act No. 20 applies to the Exploration Licence and/or GM's application for an exploitation licence. Accordingly, there is an actual and specific legal dispute between the Parties concerning the existence and scope of GM's rights to be granted an exploitation licence.
8. With Claim 1 (as formulated) and the aforementioned nature of the Parties' dispute on GM's rights to exploitation, the Tribunal is not requested or required to in any way assess whether or not Act No. 20 is applicable to the Exploration Licence and/or GM's exploitation licence applications, including whether its application would result in expropriation. Similarly, the Tribunal is not requested or required to in any way order the Government of Greenland to issue or amend any licence to GM or otherwise to do or omit doing something in relation to the Exploration Licence or GM's applications for an exploitation licence. Finally, the Tribunal is not requested or required to in any way assess or interfere with any decision of the Government of Greenland in any administrative process.
9. Claim 2 concerns the purported application of Act No. 20. The Parties agree, and it is also clear from its preparatory works, that if the application of Act No. 20 would result in an expropriation in the present case, Act No. 20 cannot be applied to the Exploration Licence and/or GM's exploitation licence applications because the Act contains no legal basis for expropriation. By contrast, as explained and documented herein, the Parties disagree on whether Act No. 20 applies to GM's Exploration Licence and/or to its applications for an exploitation licence. If Act No. 20 does not apply, the Government of Greenland either acted with intent or negligently in applying this Act to GM's Exploration Licence and its exploitation licence application of 17 June 2019, and so its breach of contract (under Claim 3) in this respect would be either wilful or negligent.
By contrast, if the Act does apply, the Government of Greenland would not be at fault for having applied it, and so its breach of contract (under Claim 3) would be a breach without fault in this respect. Depending on the Tribunal's assessment and subject to the other breaches of contract invoked by GM, the distinction of fault/no-fault is relevant in relation to Claim 4 (Damages). For these reasons, GM considers it necessary that the Tribunal render a decision on the applicability of Act No. 20 (Claim 2).
10. Claim 3 (Breach of Contract) is closely related to Claim 1 (Rights) because to the extent that the Tribunal finds that GM held certain legal rights as of 1 December 2021 to be granted an exploitation licence in respect of its Exploration Licence, such rights have been breached by the Government of Greenland in the period thereafter or, at least, have been breached on an anticipatory basis in that period and as at the date of this Statement of Claim (19 July 2023). Claim 3 is necessary for two reasons. First, the Parties disagree as to whether the Exploration Licence constitutes a legal instrument holding rights and obligations of the parties thereto that may be subject to breach ("misligholdelse").
Second, the Parties disagree as to whether the Government of Greenland has breached
any obligation in the Exploration Licence. As should be clear from the above, if the
Tribunal agrees with GM that it held certain rights as of 1 December 2021 to be granted
an exploitation licence, those rights have been breached. As mentioned above, Claim
is also related to Claim 2 in relation to the specific nature of the contract breach: the Tribunal's decision on Claim 2 will determine whether the Government's breach of contract (in applying Act No. 20 to GM's exploitation licence application) is wilful or negligent, or, alternatively, whether it was a breach without fault.
11. In respect of Claim 1 (Rights) and Claim 3 (Breach of Contract), the Tribunal is only requested to assess, as a matter of fact and law, the extent to which GM had a legal right to transition from exploration activities into exploitation activities at Kvanefjeld as of 1 December 2021 or at any time prior to that, and whether the Government of Greenland's corresponding obligation to grant an exploitation licence (expediently) has been breached. The factual and legal question of GM's rights concerns the very nature and scope of the licence and is thus clearly within the scope of the arbitration agreement, which covers "questions arising out of the licence". Similarly, the factual and legal questions of the Government of Greenland's breaches of contract, i.e., breaches of obligations under the Exploration Licence, are clearly "questions arising out of the licence". Therefore, the questions of GM's rights and the Government of Greenland's contract breaches clearly do not concern any discretionary decision or other decision of government or administrative process, contrary to what the Respondents would have the Tribunal believe.
12. At the present stage of the proceedings, GM is not requesting that the Tribunal quantify
Claim 4 (Damages), which GM requests be assessed in a separate phase. The reason is
that it is premature at present for GM to submit an exact claim for payment of damages
because the Government of Greenland has yet to decide on GM's outstanding
exploitation licence application for the exploitation of rare earth elements, zinc and
fluorspar, with uranium and thorium to be handled as residual impurities only (i.e.,
products for disposal and non-commercial use). Further, GM is optimistic that if the
Tribunal were to grant Claims 1-3 in whole or in part, the Parties would be in a position
to reach an amicable solution on the fate of the Kvanefjeld Project, thereby leaving the
issue of remedies to be dealt with between the Parties. Indeed, the Deputy Minister of
Mineral Resources Mr Hammeken-Holm recently told the press that, if the Tribunal
finds that the Government has interpreted the law incorrectly, "that means that the case
processing must start from the place where it was just finished last." The Deputy
Minister further confirmed that GM "may be able to get an exploitation permit if they
meet all applicable rules, conditions and requirements"
13. However, in the absence of such amicable solution following the Tribunal's decision on Claims 1-3, the Tribunal's assessment of the quantification of damages for the purposes of Claim 4 would be necessary. Hence, Claim 4 and the related argumentation on liability in Section J below is included here on a preliminary basis only and GM requests that the Tribunal determine the quantification of damages under Claim 4 in a separate proceeding. GM reserves its right to introduce an exact claim for payment of damages in due course, and to further expand on its argumentation in this respect.
14. As noted above, Claims 1 and 2 contain primary and subsidiary claims as indicated in the claims themselves, while Claim 3 concerns multiple independent claims ("sideordnede påstande").
15. All the claims should generally be understood in the way that they may be granted to a lesser extent than claimed if the Tribunal is not satisfied that the full claim can be granted ("det mindre i det mere").
16. GM invested in Greenland in 2007 on the basis that, if it delineated a commercially viable resource at the Kvanefjeld rare earths project (Kvanefjeld Project or Project), it was guaranteed an exploitation licence for that resource. This guarantee is both statutory and contractual. It was conceived by the Greenlandic and Danish Governments as a way of attracting mining investors to Greenland. Section 1401 of GM's Exploration Licence is the contractual form of this licensing guarantee and is at the centre of this dispute.
17. GM worked in good faith, in close cooperation with the Greenlandic and Danish authorities, for 14 years. The record shows that both Governments took active steps to encourage GM to continue with its work and investment, and to advance the Project into production. This Project has been keenly anticipated by the Greenlandic and Danish Governments for over a decade and has been the centrepiece of their international marketing campaign to promote Greenland as a safe and stable destination for mining investment.
18. The Project has the potential to deliver enormous social and economic benefits to
Greenland and Denmark. As shown in the table below, on the basis of the expert
evidence provided by Mr Milburn and submitted with this Statement of Claim, GM's
financial modelling demonstrates that Greenland will receive almost US$23 billion in
taxes, royalties and other benefits if the Kvanefjeld Project is allowed to proceed
19. This equates to more than US$400,000 for every member of the population of Greenland. In addition, the Project has the potential to deliver jobs, infrastructure, services and lasting opportunities to the local people.
20. The Kvanefjeld Project is one of the largest undeveloped rare earths deposits in the world.4 Rare earths are required to produce the permanent magnets on which electric vehicles and wind turbines depend, meaning they are critical to the clean energy transition. The Project therefore has the potential to play an important role in this energy transition. This is what is at stake.
21. In addition to being a globally significant rare earths deposit, the Kvanefjeld area also
has naturally elevated levels of uranium. It makes economic and environmental sense
to mine the uranium at the same time as the rare earths, and to export uranium as a
carbon-free and reliable energy source. The Project was therefore developed on the
basis that uranium would be exploited as a commercial by-product. This development
plan was endorsed by the Greenlandic Government, which insisted that the chemical
refining of uranium (to yellowcake) take place in Greenland. With that being said, the
Kvanefjeld Project is so valuable that it is economically viable without exploiting
uranium, meaning that it would be possible to instead treat uranium as a residual
22. Over the course of many years, the Danish and Greenlandic Governments undertook a major joint regulatory exercise to establish a legal framework to govern the exploitation and export of uranium. The purpose of this exercise was principally to facilitate the export of uranium from the Kvanefjeld Project. GM actively engaged with the two governments on the development of this framework. Needless to say, these efforts by the two governments to facilitate GM's development plan supported GM's legitimate expectations that it would be entitled to exploit both rare earths and uranium from Kvanefjeld (provided GM could establish this would be safe, which it did).
23. After many years of investment and development, in June 2019, GM formally applied
for an exploitation licence for the Kvanefjeld Project, including rare earths, zinc,
fluorspar and uranium. Following this formal application, in April 2020, the
Government confirmed in writing that GM had satisfied the conditions of Mineral
Resources Act (MRA) Section 29(2) with respect to the Kvanefjeld deposit, including
rare earths and uranium.6 Shortly thereafter, the Minister of Mineral Resources advised
the Parliament that, in the context of GM's licence, under Section 29(2), "a rightholder
has the right to be granted an exploitation permit if the licensee has identified and
delimited deposits that it intends to exploit"
24. From this point, GM had an unconditional right to an exploitation licence for the Kvanefjeld Project under MRA Section 29(2) and Section 14 of the Standard Terms.
There was no longer any question of whether (or if) GM would be granted an exploitation licence. Rather, all that remained to be determined were the terms and conditions of that exploitation licence (how the exploitation activities would be carried out) under MRA Section 16.
25. By late 2020, the Greenlandic and Danish authorities had approved GM's EIA and SIA
for public consultation, and in December 2020, these documents were formally
approved by the Greenlandic Government. This marked the beginning of the public
consultation on GM's EIA and SIA. The Government announced that the purpose of
this process was "to provid[e] the authorities with all the necessary information for
determining the conditions for notification of an exploitation permit in accordance with
Section 16 of the Minerals Act".8 This puts beyond doubt that GM had already passed
through the gate of MRA Section 29(2) and was in the final stage of the licensing
process under MRA Section 16. Indeed, concurrently with this Government
announcement, the Minister of Mineral Resources publicly stated that GM would be
entitled to exploit rare earths and uranium within a year
26. It was at this juncture, when GM's right to an exploitation licence was unconditional, that the Project was blocked for political reasons.
27. Before explaining the political process by which the Project was blocked, it is important to make it clear that this is not a case about a project failing to comply with environmental protection requirements. As will be explained below, GM's EIA demonstrated clearly that the Kvanefjeld Project could be conducted in accordance with international best practice. This EIA was supported by over 120 documents including studies and technical reports. It was subject to a robust and exhaustive five-year review process by the Greenlandic and Danish authorities and their advisers. By approving the EIA for public consultation, the Government accepted that the Project impacts and risks had been accurately described therein.
28. The environmental credentials of the Project were confirmed by Greenland's
Chief Medical Officer, who presented at a public meeting in Narsaq alongside the
Danish environmental authorities in 2019, and stated: "we do not believe that there will
be an impact on the population of Narsaq" and "there is nothing to indicate, a spread
of either radioactivity or other dangerous substances in the city of Narsaq itself."10 The
Chief Medical Officer indicated that there were no radiological pathways of concern,
stating "I can't see where the radioactivity is coming from" and that "nothing will come
that has any health significance here and now in Narsaq city".11 The Minister of Nature,
Environment and Science subsequently advised the Parliament that the statements made
by the Chief Medical Officer were "objective and concrete" and that "in relation to a
specific question about radiation and the spread of dust that, based on the existing
knowledge, neither radiation nor dust can be assumed to reach Narsaq town to an
extent that will have health significance for the population."12 The Minister further
advised that the Danish Environmental Protection Agency for Mineral Resources had
confirmed that the Chief Medical Officer's statements were "based on public and
scientifically quality-assured information and data, existing knowledge, research and
studies available in the area". He subsequently provided the Parliament with a
comprehensive list of more than 30 sources that supported the Government's position
that the Project was safe
29. As the Minister of Environment confirmed, the scientific evidence supports the position that the Project is safe. That is why the Greenlandic and Danish authorities accepted GM's EIA. Pursuant to MRA Sections 1(2) and 83, the Government is obliged to ensure that mining activities are performed in accordance with environmental best practice.
The Government therefore always has the power to prevent a project that would not be performed in an environmentally sound manner. However, this was not the case here.
The Kvanefjeld Project was not blocked for environmental reasons. It was blocked for political reasons.
30. Despite the extensive scientific evidence underpinning the Kvanefjeld Project, as with
all major projects, there were those people who were opposed to it, including those who
are ideologically opposed to nuclear energy. In the lead-up to the election in April 2021,
misinformation about the Project was spread by anti-uranium lobby groups and
members of the IA Party. The current Premier of Greenland, Múte Egede, campaigned
to stop the Project, telling the Greenlandic public that he could do this without any
liability to GM.14 This is despite the fact that the IA Party had previously admitted to
the Parliament that if the Government used legislation to block the Project, the
Government may be liable to compensate GM for "broken assumptions"15 and "a loss
31. After the IA Party was elected, the new IA Party government considered its options.
The evidence shows that, at this point in time, the Greenlandic Government realised
that there were no grounds on which it could reject GM's exploitation licence
application under the then-existing legal framework: GM was entitled to a licence. This
is proven definitively by an internal government summary of GM's rights from the time
period, which states: "the rights holder has found a limited and commercially
exploitable deposit, cf. former section 29(2) of the Mineral Resources Act" and confirms
that the next step was "the preparation of an exploitation permit pursuant to Section
of the Mineral Resources Act"
32. Unable to find a legal basis to reject GM's application, the Greenlandic Government turned to Poul Schmith, the Respondents' counsel in this arbitration, to change the legal framework. This is the genesis of Act No. 20, which banned all mining activities of mineral deposits containing uranium at concentrations above 100 ppm (the "uranium ppm threshold"). The bill that became Act No. 20 was drafted by counsel for the Respondents, who presented it to the Government. It was sent to Parliament for consultation that same day, with a covering letter that stated: "The background to the proposal is a political desire to introduce the zero tolerance policy by law."18
33. The Government's uranium ppm threshold is purely political and cannot be scientifically justified. Indeed, recently disclosed internal Government documents reveal that advice received by the Government at this time did not support the use of a uranium ppm threshold. Rather, the advice stated that radiation protection should be managed according to international best practice using radiation dosage limits.19 This is the approach the Government had previously said would be applied in Greenland, and to Kvanefjeld specifically, and which GM's independent experts used in their radiological studies for GM's EIA.
34. There is no evidence that, in proposing the uranium ppm threshold, the IA Party
Government was legitimately concerned about safeguarding public health or the
environment. Indeed, in the Explanatory Notes to the bill, the Government stated that it
had "a political wish to stop uranium extraction in Greenland", and that it was "not the
aim of this Bill to lay down rules on health and safety, the environment, resource
utilisation, etc., as these considerations are covered by the Mineral Resources Act"
35. The consultation on Act No. 20 coincided with the public consultations on GM's EIA and SIA, which had been extended multiple times. These public meetings were hosted by the Greenlandic Government. While they had originally been planned as a legitimate process, involving experts from the Danish Centre for Environment and Energy (DCE), shortly before they were due to commence, the Government abandoned any semblance of an objective scientific process. Instead, the Government cancelled the presentation by the DCE, and invited an anti-uranium NGO to present. In light of the Government's obvious hostility towards the company, GM notified the Government it would not participate.
36. Act No. 20 was debated in the Greenlandic Parliament. Records show that the
Greenlandic Government was acutely aware that the legislation was potentially
expropriatory, and many members of Parliament were concerned about compensation
claims. The Parliament was particularly concerned about a claim being brought by GM,
as everyone was aware that GM had made a massive investment in Greenland over the
previous 14 years. Nevertheless, the Greenlandic Government assured the Parliament
that the proposed law was not expropriatory because "the special conditions of existing
licences already stipulate that no licensee is entitled to the exploitation of uranium"
This is a reference to Addendum No. 1 to GM's exploration licence for the Kvanefjeld Project (including its amendments, Exploration Licence) (discussed below). The Greenlandic Government further assured the Parliament that, if the law was expropriatory, it would not apply.
37. After the Greenlandic Government secured the passage of Act No. 20 on 1 December 2021, meetings took place at which GM, the Greenlandic Government, and the Respondents' legal counsel were present. The Respondents informed GM that its exploitation licence application would be rejected because of Act No. 20. When GM's legal representatives questioned whether Act No. 20 was even applicable to the Kvanefjeld Project, given that its application clearly would result in an expropriation of GM's rights under its Exploration Licence, the Respondents informed GM that the legislation did apply because GM never had a right to anything, meaning that there was nothing to expropriate. The Respondents then tried to trick GM into abandoning its legal rights by withdrawing its exploitation licence application voluntarily. GM refused to do so.
38. Following these meetings, GM commenced arbitration to seek clarity on its rights and the operation of Act No. 20.
39. In the discussions and proceedings that have followed, it has become clear that the Respondents' entire legal case hinges on Addendum No. 1 to GM's Exploration Licence.
Indeed, the Respondents' counsel Mr Fruerlund has submitted that the addendum is the "crux of this case".22 The background to this agreement is discussed below.
40. Addendum No. 1 was negotiated in late 2011 between GM and the former Government, which was then led by Premier Kuupik Kleist and Minister of Mineral Resources Ove Karl Berthelsen. At the time, there was a so-called "zero-tolerance policy" (ZTP) on uranium exploration and mining in Greenland. As explained below, this policy never had any legislative or other legal basis. Nevertheless, the policy was sometimes referred to in Government communications.
41. Since 2007, the Greenlandic and Danish Governments had been investigating uranium mining, with a view of lifting the ZTP. This was an extensive process, including information-gathering trips to Canada and Australia, various reports and analyses, a joint Danish/Greenlandic expert working group report, a legal report, an economic report, a parliamentary committee report, a fact book, TV reports and public meetings.
42. While this process was underway, the Kvanefjeld Project was advancing rapidly. GM's investors told the company that they needed clarity on what was happening with the ZTP. In late 2011, GM representatives advised the Government that, without clarity on its rights and the ZTP, they would have no choice but to walk away from their investment in Greenland. The Greenlandic Government were keen for GM to continue its development of the Project. GM and the Government therefore negotiated an addendum to GM's licence (Addendum No. 1), which gave GM the right to explore for uranium, and to apply to exploit it. This was a departure from the so-called ZTP.
43. The Government knew that, if they gave GM an unconditional right to explore for
uranium and GM delineated a commercially viable deposit, GM would have an
automatic right under MRA Section 29(2) and Section 14 of the Standard Terms to an
exploitation licence for uranium. Premier Kleist and Minister Berthelsen indicated to
GM that they were working to lift the ZTP, but this may take some time. In these
circumstances, the Government was not prepared to guarantee GM an exploitation
licence for uranium. The parties therefore agreed to caveats that would apply while the
ZTP remained in place and allowed the Government to reject an application "to exploit
radioactive elements" (the Addendum No. 1 Caveats). These would serve to protect
the Government from liability if GM delineated a commercially viable deposit but could
not obtain a licence for uranium because the ZTP was still in place. The caveats were
only intended to apply while the ZTP was in place and did not affect GM's rights in
relation to the exploitation of non-radioactive elements. This interpretation has been
confirmed by GM's witness Dr Mair, who negotiated the addendum, and the two
Government officials who led the drafting on the Government side: Deputy Minister
Jørn Skov Nielsen and the BMP lead lawyer
44. Following these negotiations and Addendum No. 1, Premier Kleist and Minister Berthelsen made public statements that they intended to lift the ZTP. GM therefore had the reassurance it needed to continue its investment in the Project.
45. Following further detailed investigations into uranium mining, in October 2013, the Parliament voted to formally abolish the ZTP. During the parliamentary discussions around the lifting of the ZTP, the Premier of Greenland Kim Kielsen confirmed that Addendum No. 1 "already granted permission for uranium mining in Greenland". The Minister of Mineral Resources Jens-Erik Kirkegaard stated that the addendum "is a deviation from the previous zero-tolerance policy."24
46. Shortly before the parliamentary vote on the ZTP, GM representatives met with the
Government to discuss the licensing situation after the ZTP was lifted. GM and the
Government discussed the possibility that Denmark and Greenland would set up a
regulatory system to administer the exploitation and export of uranium. Additionally,
the Government would amend Section 101 of the Standard Terms to provide for
exploration for uranium
47. The Government proceeded to lift the ZTP on 24 October 2013. Five days later, Dr Mair
met with Deputy Minister Nielsen. Deputy Minister Nielsen advised that (i) the
Government would amend the Standard Terms to include uranium (rendering
Addendum No. 1 redundant), but that this would not happen straight away as the Danish
and Greenlandic Governments needed time to set up the regulatory framework to
administer the exploitation and export of uranium, and (ii) that the Addendum No
Caveats would become redundant. As set out in Dr Mair's contemporaneous notes, both the Danish and Greenlandic Governments supported the Project, and their "overall aim"
was to set up a regulatory framework so as "to keep driving Kvanefjeld forward and to complete a mining license application".26 The Deputy Minister noted that the delay in amending the Standard Terms was to GM's advantage because GM would have "access to pursuing uranium", whereas other companies would not.
48. As foreshadowed at these meetings, the two governments proceeded to set up the regulatory framework for the exploitation and export uranium, in consultation with GM.
This framework was tested in 2017 when the Danish authorities gave GM permission to export ore from Kvanefjeld to China.27 All parties proceeded on the basis that the Project would include rare earths and uranium. The Addendum No. 1 Caveats were not discussed again.
49. As demonstrated in the submission that follows, the evidence conclusively shows that the Addendum No. 1 Caveats were null and void years before GM applied for an exploitation licence for non-radioactive elements and uranium. Moreover, the caveats were invalid from inception (including insofar as they purport to authorise the Greenlandic Government to act without regard to fundamental norms of Danish administrative law).
50. In this arbitration, the Respondents' case is that the Addendum No. 1 Caveats allow the Greenlandic Government to reject GM's exploitation licence application for any reason whatsoever. This was also the position the Respondents argued at the hearing on interim measures on 7 September 2022. At the hearing, Mr Fruerlund argued that:
"in respect of the zero tolerance policy [Addendum No. 1] made sure to underline that Claimants still have no right to mine uranium or other radioactive materials. This was known to all parties when the exploration licence and the addenda were granted. In essence, Claimant bought a very expensive lottery ticket; a ticket with a massive grand prize, as well as a massive risk. Later, the zero tolerance policy was formally abolished. However, the zero tolerance policy was kept as an intricate part of the exploration licence, as well as later exploration licences. In other words, the change in political policy did not entail any changes in the granted licences"28 (emphasis added).
51. Mr Fruerlund further submitted that the Addendum No. 1 Caveats empowered the
Government to reject GM's application to exploit rare earths and uranium because the
"mining of radioactive elements would be the consequence of granting an exploitation
licence in this case"
52. As demonstrated below, the Respondents' lottery ticket characterisation of GM's investment is legally and factually incorrect. GM had clear rights under the legal framework that the Respondents created, and it was induced to continue investing in reliance upon those rights for over a decade. The Respondents' attempt to now walk away from their obligations on the basis that GM supposedly "lost" the lottery is unlawful, and would cause GM to suffer billions of US dollars in losses.
53. Moreover, even if (arguendo), the Addendum No. 1 Caveats were not null and void, the evidence demonstrates that the Greenlandic Government has known since before it enacted Act No. 20 that those caveats do not give it carte blanche simply to dismiss an exploitation licence application filed by GM. It follows that the Government has breached the principles of good faith and loyalty by positively asserting that, by application of the Addendum No. 1 Caveats, GM had no rights at all.
54. Ultimately, the result of the Greenlandic Government's political volte face in 2021 is that the Greenlandic Government is in breach of its contract with GM - a contract based on the Greenlandic Standard Terms, which were written and offered by the Greenlandic and Danish Governments in 1998. Those same Standard Terms provide that disputes arising out of GM's Exploration Licence are to be resolved by arbitration in Copenhagen.
Despite everything that the two governments have said and done to try to stop this dispute being resolved by arbitration, that is the dispute resolution method that they offered GM, and they are legally bound by that choice. It is through arbitration that GM seeks clarification of its rights, and justice for the two governments' clear breaches of contract. GM does not ask the Tribunal to overturn Act No. 20 or interfere in any legitimate government decision-making process. GM seeks only contractual remedies for contractual breaches.