The Arctic This Week Take Five: Week of 26 February, 2024
European Countries Continue to Import Russian Arctic Gas at a Record Rate
As High North News reported on February 22, a new report from the Institute for Energy Economics and Financial Analysis revealed that European countries continue to account for more than half of Russia’s gas exports. Since the beginning of Russia’s invasion of Ukraine in February 2022, Russia has been the second largest supplier of liquified natural gas (LNG) to Europe, behind the United States. Belgium and Spain respectively tripled and doubled their gas imports from Russia in this period. The majority of Russian LNG originates from Novatek’s Yamal LNG project in the Siberian Arctic. (High North News)
Take 1: The new research illuminates the challenges Europe has faced in trying to stop relying on Russian LNG. Unlike the US and the UK, the EU has not placed any sanctions on LNG imports, and European countries continue to import Russian LNG worth more than $1 billion US every month. Belgium, Spain, and France account for more than 80% of these imports. The gas mostly comes from the Yamal LNG plant in the Arctic whose expansion project, Arctic LNG 2, has recently faced increased sanctions from both the US and the UK. Although the project is complete, it has yet to initiate any shipments. Russia aims to build four other LNG terminals in the Arctic to triple its export capacity by 2030. While the EU has so far resisted enforcing sanctions on Russian LNG, it adopted a resolution in November 2023 to fully close the European market to Russian fossil fuels, including a full ban on Russian LNG. The resolution points to changing attitudes within the EU, but these are not necessarily reflected in the policies of individual member countries. While Europe has managed to significantly lower its dependence on Russian pipeline gas, resulting in historically low revenues for the state-owned company Gazprom, this has not been the case with LNG. As long as European countries keep importing Russian LNG at the same—or, as demonstrated by Belgium, Spain, and France, even higher—levels, they will ensure a stable income for Russia’s war economy and encourage further resource expansion in the Arctic. (Centre for Research on Energy and Clean Air, Euractiv, European Parliament, High North News, High North News)
Provincial and Federal Government to Invest into Manitoba’s Arctic Railway, Port
As reported by the CBC on February 22, the Manitoba provincial government as well as the Canadian federal government agreed to commit $30 million each to upgrade the Hudson Bay Railway, which connects Manitoba’s northernmost town, Churchill, to The Pas, with connections available onto Winnipeg. The railway provides a vital link for heavy industry in the area, transporting ore, minerals, wheat, and other large and heavy materials. The investment will also start the redevelopment of Churchill’s port, which is Canada’s only deepwater Arctic port accessible by rail. (CBC)
Take 2: The $60 million investment into Churchill’s industrial infrastructure is a clear indication that both the provincial and federal governments are prioritizing the North and looking to expand opportunities in both resource extraction and tourism. The newest round of funding builds on the more than $200 million provided by the federal government prior to this announcement. The railway has been plagued with defects and delays, but a railway link is vital for moving heavy commodities as well as essential supplies for northern communities, such as those in Nunavut’s Kivalliq region. The railway and port are currently owned and run by the Arctic Gateway Group, a partnership of 41 First Nation and Bayline communities in Manitoba. According to Manitoba premier Wab Kinew, the province has untapped maritime potential because of its access to the North Atlantic and Arctic Oceans through Hudson Bay. The railway is expected to transport a large shipment of zinc concentrate this year, and considering that Churchill welcomed its first cruise ship in ten years in 2023, a redeveloped port could also make the area accessible to more cruise traffic. All stakeholders—including First Nations, local communities, and the provincial and federal governments—will need to make sure that development plans balance economic development in the region with environmental concerns about fossil fuels, maritime shipping, and the mining industry. (CBC, Prairies Economic Development Canada)
Greenland Unveils New Arctic Strategy
High North News reported on February 23 that Greenland’s government, Naalakkersuisut, has announced a new foreign relations, security, and defence strategy for 2024-2033. The strategy identifies closer links between Greenland and Arctic areas in North America as a priority. These include Alaska—which the strategic document sees as an inspiration in education and the mineral sector—and the Canadian Arctic territories and regions of the Yukon, Northwest Territories, Nunavut, and Nunavik. The government proposes the establishment of a new forum, the Arctic North American Forum, and aims to strengthen cooperation with Iceland, emphasizing the importance of maintaining the Arctic as a low-tension area. (High North News)
Take 3: In the recently unveiled strategic document, Greenland emphasizes its role as an essential Arctic actor and its aspirations to both deepen its involvement in a wide range of international partnerships concerning the region and to launch new ones. Instead of looking to Denmark for Arctic policy strategy, Greenland is prioritizing an independent set of priorities concerning the Arctic. The strategic document emphasizes that the Arctic must remain a low-tension area and proposes setting up a peace research centre in Greenland. Even though the document rarely mentions Russia, it is clear that Greenland’s government is mindful of the ongoing militarization of the Arctic and the area’s growing global importance. While the document also notes closer cooperation with Denmark, Iceland, the EU (with a representation in Nuuk expected to open in the next few years), the UN, and NATO, Greenland appears particularly focused on forging North American Arctic partnerships, with Alaska and Canadian Arctic territories. In this way, Greenland can be seen as deepening its own international cooperation policy that is tailored to its geographical location and climate, rather than following Denmark’s goals negotiated in Europe. Additionally, such cooperation through fora like the proposed Arctic North American Forum also means that Arctic policy will be discussed at the level of Inuit Nunangat (Inuit homelands) rather than of the nation-state. Although authority over foreign, defense, and security policies remains in Denmark, Greenland’s strategy for the next decade clearly outlines its priorities and presents a range of proposals for close cooperation within the Arctic. (Altinget, Greenlandic Broadcasting Corporation, High North News)
New Nickel Mine Opened in Nunavik
As reported by Nunatsiaq News on February 26, a new nickel mine named Anuri (“wind” in Inuktitut) was opened at the Raglan Mine complex in Nunavik, Quebec. The Anuri mine is supposed to extend the site’s operation by at least 20 years, into the 2040s. The Raglan Mine fly-in mining complex lies between the Inuit communities of Salluit and Kangiqsujuaq and is Nunavik’s largest private employer. Planning for the mine has been underway for more than ten years. (Nunatsiaq News)
Take 4: The opening of the Anuri nickel mine at Raglan Mine has been in development for over ten years, and ensures the continuation of nickel mining in Nunavik at least into the 2040s. Nickel, copper, and iron are currently mined in Nunavik, in addition to recent lithium and gold early exploration sites. The Raglan Mine, which mines nickel and copper primarily in conventional open-pit mines, has already exceeded its originally designed output several times, and with the new expansion, is one of the world’s largest and most profitable nickel mines. As the largest private employer in Nunavik, with about 1,400 employees (including many Inuit), it is also a vital local actor with significant influence. Glencore, the multinational firm that owns Raglan Mine, has a presence in over 35 countries and over 140,000 employees and contractors. It is one of the major global actors in the mining industry, particularly regarding nickel, copper, cobalt, and zinc. Nickel and cobalt in particular are key materials for battery manufacturing, and Raglan is their northernmost site. Over 70 allegations of human rights abuses have been reported against Glencore, including at a cobalt mine in the Democratic Republic of Congo, which among others sold cobalt to Tesla. While the mining industry has brought jobs and investment into Nunavik and other areas of the Canadian Arctic, it remains under close scrutiny regarding working conditions as well as reported negative impacts on caribou populations and other environmental concerns. (CBC, Mining Technology, Nunatsiaq News, Nunatsiaq News, Nunatsiaq News, Nunavik Regional Board of Health and Social Services, The Verge)
Possible Sabotage Again Halts Iron Ore Shipments on Kiruna-Narvik Railroad
On February 26, The Barents Observer reported on possible sabotage on the Kiruna-Narvik railroad, near Sweden’s border with Norway. An empty iron ore train heading towards Narvik derailed and halted traffic on the line, which is Europe’s northernmost cross-border railroad. The derailment happened in the same area where another train had derailed in December, stopping all ore shipments for two months and causing revenue losses of about EUR 8.8 million a day for Swedish state-owned mining company Luossavaara-Kiirunavaara Aktiebolag (LKAB), which mines ore in Kiruna. (The Barents Observer)
Take 5: The news of another derailment on the Kiruna-Narvik line, which the Swedish police are investigating as a case of sabotage, highlights the fragility of this vital railroad connection. Given that LKAB supplies about 80% of Europe’s iron ore, this route is essential to the continent’s iron ore supply. As demonstrated in December, a single derailment can halt all traffic on the line for months, resulting in not only mounting losses for LKAB, but also destabilizing the critical iron ore supply chain. Following the latest incident, the company has called for the installation of double tracks on the line to increase its capacity, so that in the case of a similar event, ore could be redirected to the Luleå port and still shipped to customers Most of LKAB’s ore now has to be put in storage, and it is unclear when it will be delivered. The derailment—only one week after the line was reopened following two months of lost revenue—clearly shows that it is necessary to enhance more capacity on the line to allow for redundancy. Moreover, mining and energy companies, as well as governments, must prepare for the risks of industrial sabotage targeting essential commodities such as iron ore, which is almost entirely used for steelmaking. The derailment also points out the fragility of the European iron ore market, in which one company supplies a vast majority of European customers and relies on a single railroad line to the port of Narvik to be able to fulfill shipments. (High North News, The Barents Observer, The Barents Observer)