December 3, 2014 / 5:59 PM / 4 years ago

Greenland parties in coalition talks, mining in focus

COPENHAGEN, Dec 3 (Reuters) - Greenland’s two main parties, who disagree on mining regulations that could impact foreign investment, are in coalition talks following an election last week, one of them said on Wednesday.

Greenland’s 56,000 people voted on Friday in a snap election called after an expenses scandal involving the former prime minister Aleqa Hammond.

Results showed Siumut, which has formed every single government in Greenland but one since 1979, won 34.3 percent of the vote. Opposition party Inuit Ataqatigiit (IA) won 33.2 percent, Greenland’s election website showed.

The closeness of the result means both parties have the same number of seats in parliament — 11 each out of 31 — but with more votes, Siumut, led by Kim Kielsen, has the right to start coalition talks.

Polls had shown for weeks before the vote that IA leader Sara Olsvig had a good chance of winning, representing a clean break following accusations that Hammond used state money to pay for hotels and flights for her family.

But analysts said Kielsen, who took over Siumut after the October scandal, ran a strong campaign emphasising his trustworthiness as an ex-policeman and focusing on specific issues such as improving the fishing industry.

“I am expecting that talks will resume tomorrow,” IA’s Olsvig said when asked about talks between her and the Siumut party.

“I can’t say anything in detail, except that we are still talking and we are meeting again,” she told Reuters by telephone.

Local media had reported that the two parties met earlier this week after a weekend of rest following Friday’s election.

The most obvious sticking point between the two parties is their stance on uranium mining, long banned before a Siumut-led government lifted it last year. This paved the way for rare earth mining projects because those are often associated with the production of uranium as a byproduct.

Olsvig’s party had rejected the lifting of the ban and promised to reimpose it, but has been softer on the issue since.

“A Siumut-IA coalition would at this point be the best governmental combination possible in the eyes of the foreign investor community because it would convey a sense of stability,” said Mikaa Mered, chief editor of the POLARISK Greenland Report.

However, a referendum on uranium mining has been on the cards since the ban was lifted by a narrow parliamentary vote last year.

Should a referendum occur, “the two party leaders may then fight each other so hard that it would harm the country’s stability once more,” Mered said.

See also

Reporting by Sabina Zawadzki; Editing by Angus MacSwan

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