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Why the Greenland Minerals (ASX:GGG) share price is rocketing 17% today

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The Greenland Minerals Ltd (ASX: GGG) share price is rocketing today, up 17% in afternoon trading after earlier posting gains of more than 30%.

This comes after the ASX rare earths share crashed 45% yesterday before entering a trading halt pending today’s announcement.

We look at that announcement, and what’s been driving Greenland Mineral’s wild share price swings, below.

What did Greenland Minerals announce today?

Greenland Minerals’ shares are soaring after the company released an announcement to calm investor fears about the recent election in Greenland.

For a spot of background, the ASX listed resource share has been operating in Greenland since 2007. The company’s predominant focus is developing its Kvanefjeld rare earth project in that nation.

Atop of rare earth elements – including neodymium, praseodymium, terbium and dysprosium – the company also had plans to recover uranium during its rare earths production at the project. And that plan may have largely been responsible for yesterday’s 45% share price retreat.

That’s because Greenland’s newly elected government, the Inuit Ataqatigiit party, won 37% of votes. And the environmentally friendly party has pledged to stop the Kvanefjeld project amid concerns from locals about radioactive waste polluting the nearby farmland.

In response, this morning Greenland Minerals stated:

Greenland Minerals Ltd has operated its 100%‐owned Kvanefjeld rare earth project effectively under all successive Greenland governments since commencing operations in 2007. The company looks forward to engaging with the new government once it has been established.

The company said it has operated in strict accordance with Greenland’s Minerals Act and that the project was “shaped by extensive Greenland stakeholder engagement at a community and government level”.

Greenland Minerals noted that the Inuit Ataqatigiit party had “expressed an anti‐uranium position” during the campaign and maintains that position after its election win.

It highlighted that uranium “is not of great economic significance to the Kvanefjeld Project, however revenues along with those from other by‐products would serve to reduce rare earth production costs”.

Greenland Minerals share price snapshot

Still struggling to regain yesterday’s massive selloff, Greenland Minerals shares remain down 4.5% over the past 12 months. But comparison the All Ordinaries Index (ASX: XAO) is up 33% since this time last year.

So far in 2021 the Greenland Minerals’ share price is down 63%.

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Motley Fool contributor Bernd Struben 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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