A little more than a year ago, a dozen scientists from the world’s biggest oil companies packed their geologist’s tools and headed for a pile of sedimentary rocks at a beach on Nuussuaq Peninsula in western Greenland. The oil men jumped excitedly out of their helicopters and immediately began cracking rocks with their hammers.

As Jørn Skov Nielsen, deputy minister of Greenland’s Bureau of Minerals & Petroleum, tells the story in his office in Nuuk, the capital, he goes to his bookshelf and returns with a brown rock speckled with tiny black spots. “Smell this,” he says, grinning. And as he waves the rock under my nose there is no disputing that it is drenched with oil, solid proof that there could be much more buried under the cold waves of Disko Bay.

“There could be just as much oil out there as there is in the North Sea,” says Nielsen, a Dane who has lived in Greenland for 18 years. “We’re hoping for one to two billion barrels of oil per field. The first field needs to have at least 500 million to one billion barrels; otherwise the big oil companies won’t go after it.”

The oil companies are already betting that there are deep reservoirs of oil out there. Exxon, Chevron, the Danish group DONG and Canada’s Husky have applied for licences to explore for oil in the ocean beyond Disko island, old whale hunting territory off Greenland’s western shore. DONG and Husky have already received approval to explore and Exxon and Chevron are expected to follow. It could still be years before big oil tankers push aside Greenland’s fishing trawlers in the towns along the rocky coast but interest is clearly growing.

“The amount of sea ice has been reduced so now boats can sail year-round to Disko,” says Nielsen. “A few years ago, they could only sail eight months a year. The sea ice has changed and less ice helps exploration.”

The hunt for oil is just the beginning of what could soon become a frenzied rush for riches buried in Greenland’s frozen expanse. While Exxon and co are looking for oil, other companies are digging for diamonds, zinc, rubies, platinum, olivine and gold. Greenland today is living before the gold rush: a state of nervous expectation, hoping for economic change and yet wary of how that could alter the social fabric of a fragile community.

Many people hope that the receding ice cap will attract foreign investors who will come to exploit the riches buried under their ice and create jobs. Greenland’s traditional way of life, hunting and fishing, has for years been unable to sustain its people and global warming is only making it harder. Warmer temperatures make it tough for hunters to catch seals because the sea ice is disappearing and some animals, such as the polar bear, are becoming rarer too. Like few places on the planet, Greenland has come to symbolise both the winners and losers of climate change.

Ole Christiansen, president and CEO of prospecting company Nuna Minerals, is determined to be among the winners. Nuna Minerals was spun off from the state-owned Nuna Oil company. In the world of mining, Nuna is an exploration company. It does the risky, preliminary work, investing in exploration for minerals in the hope of one day making money by selling the extraction rights to mining companies. It raised €5.6m in venture capital in 2005; its latest round of financing that should get it through 2008. “We start grass-roots exploration before anybody comes in,” says Christiansen. “Today there are two mines [one for gold and one for silicate] in Greenland but in five years there will be five.”

Greenland awarded 40 exploration licences last year, up from 33 in 2005 and from 17 in 2002. Another telling indicator is bore meters, the amount that prospectors drill in their search for minerals and metals. The best year so far was 2005, when prospectors drilled 25,146 bore meters and invested €25.5m in exploration, the highest level for the past 14 years according to the Bureau of Minerals & Petroleum. Nuna’s new offices are on a rocky outcrop in a part of Nuuk that residents refer to as the “new city”. In a conference room littered with maps, Christiansen unrolls one of Greenland with coloured sections marking exploration sites. Leaning over the map, he points toward south Greenland, where the Nalunaq gold mine is already operating. He then points to Storø – an area near Nuuk – where he found copper sulphite, a strong indication of gold, and actually pulled up gold shavings in core samples from drilling.

In the west, near Kangerlussuaq, a former US Air Force Base and now Greenland’s main international airport, Hudson Resources, a Canadian company, is prospecting for diamonds. And further north near Maarmorilik, London-based Angus & Ross is preparing to reopen the Black Angel zinc and lead mine that closed in 1990. Angus & Ross geologists found a new vein of ore on a section of its claim that had been previously covered by 60 metres of ice. “This is one of the blessings of global warming,” says Robin Andrews, chairman of Angus & Ross.

But even with less ice, Greenland remains a logistical nightmare. The island is 2,670km long and 1,300km wide. If you were to lay Greenland across Europe, it would stretch from the northern tip of Denmark to the Sahara. On this massive island there are some 57,000 people spread about in a handful of small towns and isolated settlements all on a thin strip of coast that is covered with rocks.

Only in a few areas in the south can the land support some sparse agriculture. The biggest town is Nuuk, the capital, with 15,000 people and the country’s only two traffic lights. There are no roads connecting the towns. The only way to travel around the country is either with long boat rides or to fly with Air Greenland which locals call “Air Maybe” because of the difficulty of getting seats and the tendency for flights to be cancelled due to bad weather.

“To mine in Greenland you have to accept the logistical challenges and the costs, and that means you need to have a higher grade of ore than in other places,” says Andrews. “But one of the advantages of Greenland is that it is politically stable. Many of the places we operate, from Russia and China to the “stans” and Africa, all have their risks.”

Although the image of the typical Greenlander is an Inuit hunter rushing through the frozen landscape with his dog sledge, most people live in towns. As it gets harder to make a living from fishing, the urbanisation of the country is accelerating. Young people especially, eager to build a future, are yearning for change.

“We can’t survive on fish and shrimp,” says Anemarie Ottosen, a 24-year-old student, who is working the registration stand for the Nuuk annual marathon. She comes originally from Upernavik, a small town in the north but moved to Nuuk to study to become a teacher. “People aren’t happy up there. There are a lot of social problems and the young people are moving away.”

Most often, young people move to Nuuk. “It’s really modern. It’s become really hip to live in Nuuk. Everybody wants to move here,” says Martin Zinck, drummer in a local pop band called DDR. The name is a play on the old initials for East Germany. The band’s members come from Disko island and so to express their local pride they called themselves Disko Democratic Republic. They sing in Greenlandic and compose songs of protest against Denmark. In the small recording studio in the basement of Atlantic Music, a local label, Anda Uldum, the band leader, says young Greenlanders see opportunities in Nuuk, education and a lower cost of living.

“I don’t worry about Greenland if the ice melts; I worry about the Netherlands and Venice,” he jokes. One night during our stay, we are invited to dinner by Svend Hardenberg, the 37-year-old CEO of Nukissiorfiit, the Greenland power company, and his wife, Julie, an artist. As Svend is stirring a kettle of reindeer goulash in the kitchen, he says his generation is no longer satisfied just to be the employees of Danish executives. He is proud of his master’s degree in business and to be one of the few Greenlanders in a top-level executive job. “Our parents were employees but our generation is making decisions that will have an impact on our future. We want independence,” he says.

The mining companies and the oil companies may not actually create a lot of jobs for Greenlanders, he concedes, but it could provide economic justification for Greenland to build infrastructure that can create jobs and promote economic growth. He is building new power plants in the southern towns of Narsaq and Qaqortoq and says there are plans for further plants in Nuuk and Sisimiut in the coming years. “In five to 10 years we could connect the biggest towns and create a national power grid down the west coast and into the south,” he says.

In the spring, you can hear whales spouting in the bay from the Hardenberg’s kitchen. Julie calls Greenland “the world’s most beautiful prison” because of its isolation. Her art is an example of young Greenlanders struggling to find a contemporary definition of themselves and their culture. Two years ago, she published a book of photographs called The Quiet Diversity, a series of portraits of Greenlanders, some with strong Inuit features and others with Danish features.

“Politicians are defining the good Greenlander with stereotypical images of hunters,” she says. “But today it’s difficult to find the person that we all think is Greenland. Today there are many expressions of who we are, not just who we think we ought to be.”

Global warming and its impact on Greenland’s economic future is a key factor in the constant debate over Greenland’s relationship to Denmark. With the hope of soon reaping riches in oil and minerals, Hans Enoksen, the premier of the home rule government, sees a unique opportunity to grasp full independence from Denmark. “The increased income will be positive and will mean increased independence for us,” he says.

The potential revenue from its natural resources could make Greenland economically independent for the first time. “If we are to be independent, we have to pay our own way. So what generation would be bold enough to create the greatest change if not ours? If we don’t create this change we will remain a colony for the next 300 years.”

“We will collect data with a view to possibly making our claim to the region. But it is not our job to make that claim. The true challenge for us is the ice. No one has ever sailed in that area before.”
Christian Marcussen
Works for the Geological Survey of Denmark and Greenland, which is embarking on a joint Swedish-Danish expedition to the Arctic to explore the 2,000km-long Lomonosov Ridge off Greenland, at the centre of Russia’s claims to the region.

“I’m not an expert but I’m obliged to think that the North Pole is joint property of the world society.”
Anders Fogh
Danish Prime Minister.

“We can only smile at the Russian’s flag under the North Pole. It has neither political nor legal significance as to which countries will achieve the right to exploit possible gas and oil resources. This dispute about territorial rights will be settled by the UN in 2014, where we of course – together with Greenland – will present our claim.”
Peter Taksøe-Jensen
Undersecretary for Legal Affairs, Royal Danish Ministry of Foreign Affairs.

In 1979, Greenland moved from being a colony to a self-governing division of the Kingdom of Denmark. Denmark is still responsible for conducting foreign policy, security, law enforcement and the judiciary. Greenland’s government has co-determination and veto rights on key issues, such as the use of its natural resources.

Government: coalition, led by the social democratic Siumut party.
GDP: €1.41bn.
Unemployment rate: 9.3 per cent (in towns in 2005).
Industries: fish processing (mainly shrimp and Greenland halibut), handicrafts, hides and skins, small shipyards, mining, tourism.
Population: in towns 47,073, in settlements 9,431 (January 2006).
Mobile telephones: 46,480.
Airports: 12; five heliports and 41 helistops.