Saqqummersitaq

Over the past decade, Greenland has lifted and restored its ban on uranium mining amid the uncertainty of global uranium prices. This article investigates the dynamic interrelations between uranium commodity prices and the impacts of structural shocks, sketching key economic implications for Greenland. Using a structural vector autoregressive model, this work analyses the changing relations between uranium prices, coal prices as well as real and financial variables from 1980 to 2019. The main findings are that the dynamics of uranium spot prices are diversely affected by shocks in combined real GDP, total electricity production from nuclear power, the interest rate, the real effective exchange rate, and the price of coal. The estimates also show that the pricing dynamics are important for future production and capital investment decisions. The analysis illustrates that despite the prevailing depressed uranium market, Greenland can still capitalize on future market developments. The country can anticipate benefiting from a short-run world supply disruption, a positive combination of macroeconomic shocks, and the long-term expansion of nuclear energy programs.

Large amounts of money are being transferred from Brussels to Nuuk. But the EU is not good enough at showing how much it contributes, so ordinary Greenlanders aren’t aware of this.

The long-term economic performance of Greenland has been shaped by factors like climate change and global commodity prices but more importantly by the change and persistence of economic and political institutions. This chapter discusses the combination of these factors ranging from natural-resource transitions, historical legacies, and state developmental policies. It provides a general overview to understand the interplay of endogenous and exogenous factors that have influenced the historical evolution of the Greenlandic economy.