Battle for Arctic riches

Photo: The Canadian Press

From a distance, the northern shores of Baffin Island in the Arctic appear barren — a craggy world of snow-capped peaks and glaciers surrounded by a sea of floating ice even in the midst of summer.

Yet beneath the forbidding surface of the world's fifth largest island lies a vast treasure in the shape of an exceptionally pure strain of iron ore. The Baffinland mine, part-owned by a local company and ArcelorMittal, one of the world's biggest steel producers, is believed to hold enough ore to feed smelters for decades.

As climate change pushes the cold and ice a little farther north each year, it is spurring talk of a gold rush for the Arctic's abundant natural resources, prized shipping routes and business opportunities in tourism and fishing. The Arctic, including the fabled Northwest Passage between the Atlantic and the Pacific, is among the last regions on earth to remain largely unexplored. In April, U.S. President Donald Trump signed an executive order to reverse Obama-era restrictions on oil drilling.

Yet industry experts, researchers and veterans of the Far North say there remain many obstacles to reaping the riches once blocked by the ice. Conservationists also oppose the large-scale extraction of Arctic resources, fearing that the fragile environment will be irreparably harmed.

The Associated Press took a first-hand look at the Arctic on a month-long, 10,000-kilometre journey aboard the Finnish icebreaker MSV Nordica, along with researchers specializing in Arctic development. The journey was in part an effort to promote the ship to potential clients in North America as an "icebreaker for hire."

"As the world demand for raw materials is ever increasing, and (with) a realization that a large part of the unexplored deposits are in the Arctic, there is a natural shift to focus on that area," said Mads Boye Peterson, head of Denmark's Nordic Bulk Carriers Shipping.

The U.S. Geological Survey has estimated that up to 30 per cent of the world's undiscovered gas and 13 per cent of oil waiting to be found are inside the Arctic Circle. Even if only a fraction of these fossil fuels are tapped they could be worth hundreds of billions of dollars.

Coal, diamonds, uranium, phosphate, nickel, platinum and other precious minerals also slumber beneath the icy surface of the Arctic, according to Morten Smelror, director of the Geological Survey of Norway. And the growing need for sophisticated batteries to power electric cars and handheld devices likely will drive demand for rare earth elements, lithium and cobalt found in significant amounts in the Arctic regions of Russia, the Nordic countries and Greenland, he said.

Apart from natural resources, the geography of the Arctic also opens up new opportunities. Sailing through the Northwest Passage could potentially cut the distance from East Asia to Western Europe by more than 10,000 kilometres, compared with the traditional route through the Panama Canal, offering huge fuel savings.