One of the worst performers on the Australian share market on Thursday has been the Greenland Minerals Ltd (ASX: GGG) share price.
The rare earths focused mineral exploration company’s shares crashed 45% to 8.8 cents before being placed into a trading halt this morning.
Why is the Greenland Minerals share price crashing lower?
As its name implies, Greenland Minerals is a Greenland-based mineral exploration company aiming to develop the Kvanefjeld rare earth project in south west of the country.
Management has previously said that Kvanefjeld has the potential to become the most significant western world producer of rare earths.
Unfortunately for the company, its aspirations were dealt a massive blow overnight when Greenland’s left-wing environmentalist party won the country’s election.
According to the BBC, the Inuit Ataqatigiit party won 37% of votes and vowed to halt the mining project.
The media outlet notes that many locals had raised concerns about the potential for radioactive pollution and toxic waste in the farmland surrounding the proposed mine.
The outgoing Siumut Party believes the controversy surrounding the Kvanefjeld mine was one of the main reasons for its election loss. It was supporting the mine, arguing that it would generate hundreds of jobs and significant revenue for the country over several decades.
However, Inuit Ataqatigiit’s leader, Múte Bourup Egede, stated that: “The people have spoken.”
What now for Greenland Minerals?
While nothing has been finalised at this point, it looks set to be a tough road ahead for Greenland Minerals following this election result.
The company has yet to respond to the news but requested its trading halt late this morning in order to prepare an announcement.
It commented: “The trading halt is requested pending an update to the market regarding the results of the recent election in Greenland. The Company requests that the trading halt be lifted on the earlier of the release of an announcement to the market or on the commencement of normal trading on Monday, 12 April 2021.”
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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