Canadian mining company Greenland Resources has entered into a letter of intent (LoI) with Outokumpu Europe to supply molybdenum from its Malmbjerg project in Greenland.

As one of the major stainless steel producers in the world, Outokumpu is one of the largest molybdenum consumers. As a result, the company has been looking at several opportunities to secure a sustainable supply of the metal from western suppliers.

Under the agreement, Greenland Resources will supply molybdenum oxide and carbon-free briquettes from its project in Hostakken Mountain in Greenland.

As an open-pit molybdenum mine, the Malmbjerg project is expected to supply nearly a quarter of the molybdenum demand in Europe. The continent is the second-largest molybdenum user but has no production of its own.

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By GlobalData

Mineral reserves at the project are claimed to be 245 million tonnes with an average grade of 0.176% molybdenum disulfide (MoS2) with 571 million pounds of molybdenum metal with low impurity elements.

The project is also said to have a low carbon footprint because of modularised infrastructure and low aquatic disturbance, along with clean and contained tailings.

The 35,000 tonnes of ore per day will be transported using a gravity-based aerial rope conveyor system that needs no power to run, hence generating no carbon emissions. Also, it can generate electricity through braking.

Greenland Resources chairman Ruben Shiffman said: “We plan to extract quality molybdenum with high ESG standards from Greenland, a jurisdiction that is not only part of the kingdom of Denmark but has very similar living standards as Finland. The Malmbjerg primary molybdenum deposit is one of the richest and cleanest of its kind.

“The resulting ferroalloys are perfectly suited to be used in high-quality steels produced by Outokumpu. Outokumpu will be able to source a long-term reliable supply of molybdenum oxide and carbon-free briquettes, know from where every single pound of molybdenum is being extracted, and can follow the high ESG standards over the 20-year mine life.

“Adding to EU circularity, the extraction will be done in an associate EU country, the processing of the concentrate and steel production will also be done in the EU; and a significant part of the mining equipment, team and funding will be EU sourced.”

Outokumpu chief procurement officer Marc-Simon Schaar said: “Cooperation within our value chain allows us to reduce our supply chain emissions, and at the same time we also want to ensure access to the most sustainable molybdenum suppliers like the Canadian company Greenland Resources.

‘Long-term cooperation with Greenland Resources could also provide us an access to a stable supply of molybdenum and protect us from volatile market pricing and supply.”