Iceland review - 2014, Side 41

ICELAND REVIEW 39
them. The Kvanefjeld mine in Greenland is
another big project worth mentioning, con-
taining so-called rare earth minerals, which
are currently in high demand as they are
necessary ingredients in cell phones and car
batteries. Currently the largest mines are in
Inner Mongolia, China, which has restricted
exports of the minerals. The Kvanefjeld
mine is bigger than the Isua one but also
more controversial as one of its side products
would be uranium.
The Dragon zone, which lies on the Jan
Mayen Ridge, is split between Icelandic and
Norwegian waters. Icelanders have opened
up their side of the area and three licenses
are being worked on. Norway will most
likely open up their side in the next couple
of years. It is believed that as much as
up to 10 billion barrels of oil could be
found in the area. A bigger prospect would
be Kanumas on the northeast coast of
Greenland, where geologists expect 30 bil-
lion barrels to be found. For comparison,
around 50 billion barrels are to be found in
the Norwegian Sea.
THE fuTurE IS BrIgHT
A more interesting and promising area than
the Arctic is hard to find. In the next decades
this last frontier will be fully mapped out
and the resources will be tapped. Iceland
needs to understand that it is not within its
power to affect these factors; they are exog-
enous factors. Icelanders should discuss these
changes and be aware of the trends since it
faces the choice between participating and
simply having the opportunities pass them by.
There are certain internal factors which
Iceland needs to work on, but those are
endogenous and fully under our control. In
my opinion, there are four systemic faults in
the Icelandic economy which need to be
addressed: the capital controls and monetary
policy, the debt burden and size of the public
sector, the faulty financial system and finally
the utilization of resources. In my book
Norðurslóðasókn (2013) I propose a plan on
how to tackle these problems and argue that
it can all be done within one year.
With its ice-free harbors the whole year
around, excellent infrastructure, great inter-
national airport and strong health care and
service sector, Iceland is extremely lucky; it
is in a unique position to benefit from the
promising future in the Arctic.
I believe Iceland should actively participate
in this future, since it is hardly a responsible
attitude to simply ignore what is happening
outside our jurisdiction. We need to make
sure that the developments are managed in
a responsible manner and do not harm the
environment. We have an excellent example
in the area, set by Norway, a country famous
for its responsible use of resources as well as
respect for nature.
Icelanders can enjoy an enviable future.
The trends are certainly moving in our favor.
We only need to choose wisely how to par-
ticipate in the upcoming developments. 
Heiðar Guðjónsson is an Icelandic economist. He is the chairman of Eykon Energy, one of the companies
granted a license for exploration and production of hydrocarbons in the Dragon Zone. Heiðar also runs
his own investment company, Ursus.
Foreign interest in Greenlandic territory
is increasing dramatically, and almost every
week it receives international delegations
trying to find out what opportunities lie
beneath the ice cap.
Geographically speaking, Iceland is the
youngest country on Earth; it is arguably
still in formation. The oldest rocks in Iceland
are around 16 million years old, in the West
Fjords, whereas Greenland has the oldest
rocks on Earth, dating back approximately
4,000 million years. These rocks carry most
of the elements of the periodic table and, for
instance, Isua, a small island located 160 km
(100 miles) northeast of the capital Nuuk, is
extremely rich in iron ore. London Mining
is hoping to gain permission in the next few
months to build a mine there, which will
deliver 1 billion dollars in free cash flow,
annually over 20 years. That amounts to
50 percent of Greenland’s GDP, every year.
Greenland is therefore transforming, and the
old way of life will probably disappear for-
ever in the next few years. Since Isua has no
infrastructure, and currently no inhabitants, it
is hard to do anything there except to extract
the rock, unrefined. But that is where Iceland
comes in; where we have an abundance of
electricity and ports and we could easily
refine the iron ore in Iceland were there
interest in that.
The Isua project is only one example of
buildup in the Arctic; there are many more
projects. And the collaboration of Arctic
countries is needed to efficiently utilize
Þýfigata, road 85 on Melrakkaslétta.