Greenland's ruling party to seek coalition after narrow election win (updated)

TGX Energy & Resources

29/11/2014 10:31

* Main opposition party not far behind in vote 
    * Government must deal with shrinking economy, investors 
    * Country has some of world's largest mineral deposits 
 
 (Adds analyst comment, background on mining) 
    By Sabina Zawadzki 
    COPENHAGEN, Nov 29 (Reuters) - Greenland's ruling Siumut 
Party narrowly won a snap election, results showed on Saturday, 
but its new leader Kim Kielsen will need to build a coalition to 
form a government to deal with a shrinking economy and reassure 
foreign investors. 
    The fall of premier Aleqa Hammond last month in an expenses 
scandal has muted a nationalist rhetoric that promised 
independence from Denmark based on wealth from some of the 
largest mineral deposits on earth. 
    With nascent mining projects languishing due to persistently 
low commodity prices and regulatory uncertainty, analysts 
expected any victor in the polls to focus on reviving a 
subsidised economy heading for its third year of recession. 
 ID:nL2N0TG0G9  
    Siumut, which has formed every single government in 
Greenland but one since 1979, won 34.3 percent of the vote. 
Opposition party Inuit Ataqatigiit, led by Sara Olsvig, won 33.2 
percent, Greenland's official election website showed. 
    Although both parties won the same amount of seats in 
parliament - 11 each out of a total of 31 - Kielsen is expected 
to lead coalition negotiations as his party received more votes. 
    Greenland, whose capital Nuuk is closer to New York than 
Copenhagen, became a Danish colony in the early 19th century but 
has been gaining its own powers since World War Two, introducing 
a parliament in 1979 and self-governance in 2009.   
    Just 56,000 people live dotted around the coast of the 
largest non-continental island on earth. 
    A Siumut-led government may comfort the few foreign 
investors who have ventured into Greenland to develop mining. A 
government led by the party lifted a ban on uranium mining last 
year, opening the door to rare earth projects which often 
generate uranium as a byproduct.  ID:nL2N0TH13E   
    So far companies from Australia and Canada have entered 
Greenland to mine a variety of minerals, some with Chinese 
contractors. 
    Inuit Ataqatigiit had vehemently opposed the lifting of the 
ban and had promised to reinstate it, although the party was 
keen to emphasise it was not against mining per se. 
    "Overall, the outcome of this election is very good news for 
investors, especially in the mining and infrastructure sectors," 
said Mikaa Mered, analyst and managing partner at consultancy 
Polarisk. 
    "With Siumut remaining in power ... we expect Greenland to 
stabilise itself - both from a political risk and a regulatory 
risk standpoint - whilst keeping the country's march towards 
independence."    
    There are about 40,000 eligible voters in Greenland, 29,500 
of whom voted - marking a turnout of above 70 percent.  
 
 (Editing by Pravin Char) 
 ((sabina.zawadzki@thomsonreuters.com; +45 33 96 96 50, +45 20 
54 86 88;)) 
 
Keywords: GREENLAND ELECTION/