At remote encampments near the Arctic Circle on the island of Greenland, thousands of Chinese laborers toil to build a vast iron ore mine. It sounds farfetched. But climate change, Greenland’s thirst for economic development, and China’s appetite for minerals could soon make it possible.

Greenland, a semiautonomous Danish protectorate with a mostly Inuit population of 57,000, is courting foreign investors to tap mineral deposits that are becoming more accessible as rising temperatures shrink the island’s ice cap. In one of the most ambitious projects, a British company wants to open a $2.3 billion iron ore mine that would be financed, built, and operated mainly by the Chinese. The company, London Mining (LOND), has talked with a state-owned mining company in China’s Sichuan Province about financing the project, although no agreement has been reached. Plans call for exporting most of the mine’s output to China.

Greenland’s semiautonomous government supports the project. The island’s parliament last year passed a law to set up legal mechanisms for developing large mining projects, including the granting of labor permits to an estimated 2,300 migrant Chinese workers who would build the mine.

Greenland “is not a rich society,” Prime Minister Minister Kuupik Kleist told journalists at a recent briefing in Copenhagan. “We need to establish new, significant economic activities” to supplement income from fishing and from aid provided by Denmark, which now supplies 40 percent of the island’s annual revenue. “The obvious opportunities are within the sector of mineral resources,” he said.

Not all Kleist’s countrymen share his enthusiasm. The opposition Siumut party, which now holds nine of 31 seats in the Greenland parliament, has said it will scrap the new law if it wins scheduled parliamentary elections on March 11. Siumut leaders, who have support from labor union leaders in Denmark, have warned that an influx of foreign workers could depress wages and disrupt the traditional way of life. The government says its legislation would require Chinese employees to be paid at least the current minimum wage on the island. Kleist said most foreign workers would live in isolated camps and would have little interacton with Greenlanders.

Along with the proposed iron mine, the government has granted exploration licenses to companies interested in scores of other projects, including proposed mines for uranium and rare-earth minerals. Alcoa has voiced the idea of building an aluminium smelter in Greenland, although the company has not decided whether to proceed with the plan.

Rare-earth elements, used in manufacturing computers and other high-tech items, could make Greenland a flashpoint for tensions between China and Europe. The European Union has urged Greenland to restrict Chinese development of rare-earth projects there, as China already accounts for 95 percent of the world’s rare-earth mineral supply. The Greenland government, however, has said that it has no plans to give preference to Europeans over Chinese in developing rare-earth resources.

In a recent paper entitled “Greenland—China’s Foothold in Europe,” analyst Paula Briscoe of the Council on Foreign Relations in New York warned that increased Chinese influence in Greenland “could help buy Beijing a proxy vote in Arctic matters.” China’s Arctic ambitions include not only natural resources but also fishing rights and shipping routes, she wrote. “If Greenland, lured by the promise of investments and earlier autonomy from Denmark, allows itself to be overwhelmed by foreign companies, then China in particular could use its economic influence to Beijing’s advantage.”

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