(Nuuk, Greenland, October 29, 2025) — In a positive step for environmental protection and local decision-making about extractive industries, arbitrators in a case between a subsidiary of Australian company Energy Transition Minerals Ltd (ETM) and the Governments of Greenland and Denmark have ruled that the dispute will now first be heard in Greenland’s courts, Climate Rights International (CRI) said today. The case had threatened to undermine Greenland’s right—and responsibility—to uphold its citizens’ rights to health and a healthy environment.

On October 28 an arbitration tribunal in Copenhagen ruled that the dispute over a rejected exploitation license must be heard by Greenland’s courts. However, it also confirmed that claims for breach of contract and damages may still proceed by arbitration after the Greenlandic court’s decision.

The Greenland case is part of a growing global pattern where fossil-fuel and mining companies are using Investor-State Dispute Settlement (ISDS) mechanisms—often embedded in contracts or investment treaties—to discourage governments from enacting environmental safeguards or ambitious climate change policies, or to pressure them to overturn such policies. Such mechanisms often leave countries facing an impossible choice: pay massive sums to polluting companies, or overturn lawful, rights-based decisions and allow potentially harmful projects to proceed.

“It’s good news for democratic accountability that this case is being decided in Greenland rather than by foreign arbitrators behind closed doors,” said Felix Horne, Senior Expert at Climate Rights International. “No community should see a hard-won environmental protection weakened because a company can weaponize the ISDS model to demand billions.”

ETM’s legal claim stems from Greenland’s 2021 decision to ban any form of mining that releases radioactivity into the environment—a law designed to protect public health and fragile ecosystems from potential uranium and thorium contamination. The ban effectively prevented Greenland Minerals A/S (GMAS), a subsidiary of ETM, from obtaining an exploitation license to mine what the company describes as “one of the world’s largest undeveloped rare-earth deposits.”

GMAS had been seeking approximately US $11.5 billion in damages and interest in the arbitration—more than ten times Greenland’s annual budget. The case was being financed by Burford Capital, one of the world’s largest litigation funders, which typically takes a substantial cut of any eventual award or settlement.

Similar cases have targeted coal restrictions and phase-outs in the UK, Germany and the Netherlands, and oil and gas restrictions in Italy. Other states, including Denmark, New Zealand, and France have cited fear of ISDS claims as a justification for scaling back climate ambition. There is now growing international recognition—including in recent legal advisory opinions and UN special procedure communications—that ISDS mechanisms are fundamentally at odds with the urgent need for rights-respecting climate action.

Recognizing these risks, many governments are now moving to exclude ISDS provisions from new trade and investment agreements and to strengthen domestic accountability systems. The European Union’s withdrawal from the Energy Charter Treaty, a controversial agreement that allows foreign investors in the energy sector to sue governments over policy changes, marks a growing recognition that ISDS cannot coexist with ambitious climate actions. Governments negotiating new trade agreements should exclude ISDS provisions or include carve outs for environmental protections or climate action and adopt dispute-resolution systems that uphold human rights, environmental law, and the Paris Agreement, said Climate Rights International.

In September, Climate Rights International researchers met with Narsaq residents who described their fear that the project might be revived. They expressed frustration that the mining company was taking legal action to overturn their community’s and government’s decision to reject development projects that risk having a negative impact on their health and environment. Many said they felt their voices were being ignored by a system that gives disproportionate power to investors over the people most directly affected by environmental decisions. One long-time resident told Climate Rights International, “We fought hard to make this mine an issue for all Greenlanders and after the [2021 uranium] ban we felt we had won and protected our environment. Now the company isn’t respecting that by using the courts? We have said no. Now go away.”

The proposed Kvanefjeld (Kuannersuit) open-pit mine lies approximately eight kilometers (five miles) from the town of Narsaq, a close-knit community of about 1,000 people in southern Greenland whose livelihoods depend heavily on fishing, sheep farming, and harvesting from the land and sea. The ore body contains valuable rare-earth minerals but is interlaced with uranium and thorium—meaning that any mining risks releasing radioactive materials into the environment, raising serious concerns about contamination, long-term health risks, and potential impacts on livelihoods.

“We rely on the land and the sea. This area is full of life and we want it to stay that way,” said a long-time resident of Narsaq. “Uranium dust would destroy everything we depend on.”

In response to these concerns and overwhelming local opposition, Greenland’s parliament, led by the Inuit Ataqatigiit (IA) party, elected on an anti-uranium platform, passed legislation in 2021 banning mining that would release radioactivity into the environment. The ban reflected both the will of the Greenlandic people and the government’s human-rights obligation to protect its citizens from perceived health and environment harm. The current coalition government, formed after elections in March 2025, has maintained the ban. GMAS filed their multi-billion dollar damages claim in July 2023.

The dispute is unfolding against the backdrop of an intensifying international scramble for Greenland’s world-class mineral deposits driven by the global demand for critical minerals used in clean energy technologies, advanced electronics, and defence. Without strong safeguards and meaningful participation in decision-making from affected communities, the rush risks replicating the types of human rights and environmental harms experienced in many other locations—a heightened risk in Greenland, where communities are deeply connected to the land and sea for their livelihoods, food security, and identity.

“Greenland’s government and people deserve to set their own path—on development, environmental protection, and human rights—without being held hostage by investor threats,” said Horne. “This decision is welcome, but this case remains a litmus test for whether governments can regulate in defense of the environment and human rights without being dragged into time consuming and costly legal processes.”