Kvanefjeld Arbitration Split: Licence Claims to Courts, Damages Stay in Arbitration
Energy Transition Minerals’ arbitration over the Kvanefjeld rare earths project sees a key ruling that splits jurisdiction between courts and arbitration, setting the stage for renewed legal and operational developments.
- Tribunal excludes Danish government from arbitration
- Claims on exploitation licence moved to Greenlandic courts
- Contract breach and damages claims remain in arbitration but are stayed
- Arbitration paused pending court outcomes
- ETM emphasizes project’s strategic value for clean energy supply
Background to the Arbitration
Energy Transition Minerals Ltd (ASX – ETM) has been embroiled in a complex legal dispute over its Kvanefjeld rare earths project in Greenland. The conflict arose after Greenland’s government, citing a new Uranium Act, refused to recognize ETM’s subsidiary Greenland Minerals A/S (GM) rights to an exploitation licence essential for advancing the project. In response, GM initiated arbitration proceedings in March 2022 against both the Greenlandic and Danish governments under the terms of its exploration licence.
Tribunal’s Jurisdictional Ruling
On 28 October 2025, the Arbitration Tribunal delivered a pivotal decision clarifying its jurisdiction. It ruled that the Danish government should not be a party to the arbitration, effectively narrowing the dispute’s scope. More significantly, the Tribunal referred GM’s claims seeking confirmation of the exploitation licence rights to the Greenlandic courts, while allowing breach of contract and damages claims to remain within arbitration. However, the arbitration is now stayed pending the outcome of the court proceedings, with the possibility of resuming thereafter.
Implications for the Kvanefjeld Project
This ruling represents a procedural milestone that both clarifies and complicates the path forward. ETM’s Managing Director Daniel Mamadou acknowledged the Tribunal’s recognition that the arbitration agreement was ambiguous and largely drafted by the governments, which contributed to the jurisdictional confusion. The decision aligns with a proposal ETM had made in late 2024 to pause arbitration and pursue court resolution, a proposal previously rejected by the governments.
While the arbitration pause delays a final resolution, it also opens a new legal avenue that could ultimately affirm ETM’s rights to develop the Kvanefjeld project. This project is one of the world’s largest undeveloped deposits of rare earth elements, critical for renewable energy technologies such as electric vehicles and wind turbines. The delay in extraction has been a source of frustration for ETM, which highlights the project’s potential economic benefits for Greenland, including jobs and long-term revenues.
Looking Ahead
ETM remains committed to constructive dialogue with Greenlandic and Danish authorities and local communities, emphasizing the importance of finding a balanced solution that supports both economic development and environmental standards. The company’s broader portfolio, including projects in Spain and Canada, continues to advance, but the Kvanefjeld dispute remains a focal point for investors and stakeholders watching the rare earths sector closely.
Bottom Line?
The Tribunal’s ruling reshapes the legal battleground for Kvanefjeld, but the ultimate outcome hinges on pending court decisions and ongoing negotiations.
Questions in the middle?
- How will Greenlandic courts rule on the exploitation licence claims?
- What timeline can investors expect for resolution and potential project restart?
- Could renewed government dialogue lead to a negotiated settlement outside courts?
