Malmbjerg Molybdenum Project Proceeds Energy Green Transition

Backed by the European Raw Materials Alliance (ERMA) portfolio, Greenland Resources' world-class Climax-type Malmbjerg molybdenum project in Greenland is accelerating the energy green transition.

Molybdenum (Mo) is a cross-cutting metal used in all clean, renewable energy generation and storage technologies, including wind, geothermal, solar, nuclear and hydro. Europe is the world's second largest user of molybdenum without producing it itself. The Malmbjerg deposit will be able to supply around 23 percent of the European Union's (EU) total demand from a responsibly sourced EU associate member with high environmental, social and corporate governance (ESG) standards in mine design.

Greenland Resources, a publicly traded Canadian company for which the Ontario Securities Commission is the primary regulator, is focused on developing its 100% owned, world-class Climax-type pure molybdenum deposit in east-central Greenland. the Malmbjerg molybdenum project is an open pit project with an environmentally friendly mine design focused on reducing CO₂ emissions and water use, reducing aquatic life, and reducing the footprint through a modular infrastructure.

(Credit: iStock/Evgeny Gromov)

The project has proven and probable reserves of 245 million tons of molybdenum disulfide (MoS₂) at 0.176% and could produce 571 million pounds of molybdenum metal per year over a 20-year mine life.

As the high-grade molybdenum is mined in the first half of the mine life, average annual production for the first to ten years is 32.8 million pounds at an average grade of 0.23% MoS₂ of contained molybdenum metal. the Malmbjerg project benefits from a NI 43-101 definitive feasibility study completed by Tetra Tech in 2022, which concluded that the base case is expected to have an after-tax internal return (IRR) of 22.4%, a net present value of 6% of $1.17 billion, a leveraged pre-tax IRR of 40.4%, an after-tax IRR of 33.8% and a payback period of 2.4 years.

Malmbjerg primary molybdenum ore is of high quality and low in impurities of phosphorus, tin, antimony and arsenic, making it an ideal molybdenum source for the European-led global high-performance steel industry.

Malmbjerg will produce MoS₂, which will be shipped to Europe to be roasted and converted into marketable products such as ferromolybdenum and molybdenum oxide, an important alloying element used in steel and production. EU steel and chemical companies will be able to obtain a very clean alloy from an EU associated country that produces to the highest ESG standards, and will be able to track every pound of MoS₂ to comply with responsible sourcing policies.

(Credit: Greenland Resources)

Currently, approximately 90 percent of molybdenum is produced from bioproduct ores. Compared to primary molybdenum ores, bioproduct ores contain more harmful elements, making it more difficult to meet certain high-performance chemical and steel standards. In addition, the supply is less reliable, the grade is significantly lower and the mining is less environmentally friendly because they require more reagents than primary molybdenum ores, which are primarily water.

The project will also add an important economic and social contribution to Greenland, with the potential to generate $700 million in LOM corporate taxes and create job security for local residents, according to the company's recently released NI 43-101 final feasibility study. The Malmbjerg molybdenum project aims to be the world's most environmentally friendly molybdenum mine, with a very low cash cost of $6.38/lb molybdenum. The project is located just 1,400 kilometers from Europe.

A key metal used primarily in steel and chemicals, molybdenum is needed for all technologies in the upcoming energy green transition. When added to steel and cast iron, it improves strength, hardenability, weldability, toughness, temperature strength and corrosion resistance.

According to data from the International Molybdenum Association and the European Commission Steel Report, a proxy for the past decade, global molybdenum production was about 576 million pounds in 2019, with the EU, the world's second largest steel producer, using about 25% of the global molybdenum supply and having no domestic molybdenum production. To a greater extent, the EU's steel-dependent industries, such as the automotive, construction and engineering sectors, account for about 18 percent of the EU's roughly $16tr gross domestic product (GDP).

Among the factors that will increase global demand for molybdenum in the coming decades are: the green energy transition; the trend toward high-performance steel to produce stronger and lighter steel, which requires more molybdenum content; the lower molybdenum content of steel made in China compared to Western standards; and policies that increasingly require responsible sourcing with high ESG standards, which will reduce options for end users. On the supply side, bioproduct ores are showing lower grades over time, while reserves of primary product ores are being depleted.

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