* Election was closely watched by mining industry
* Greenland holds vast untapped mineral resources
* Left-wing Inuit Ataqatigiit won 37% of votes
* Long-dominant Siumut party won 29% of votes (Adds comment from Greenland Minerals)
COPENHAGEN, April 7 (Reuters) - Greenland’s left-wing Inuit Ataqatigiit party pledged its opposition to a large rare earth mining project on Wednesday after winning a parliamentary election for only the second time in more than four decades.
Its comfortable victory casts doubt on the mining complex at Kvanefjeld in the south of the Arctic island and sends a strong signal to international mining companies wanting to exploit Greenland’s vast untapped mineral resources.
Inuit Ataqatigiit (IA) won 37% of votes in Tuesday’s snap election, compared to 26% in the last election, overtaking the ruling social democratic Siumut party which secured 29% of votes, according to official results.
The pro-mining Siumut party has been in power most of the time since Greenland gained home rule from Denmark in 1979.
Though not opposed outright to mining, IA has a strong environmental focus. It has campaigned to halt the Kvanefjeld project, which aside from rare earths including neodymium - which is used in wind turbines, electric vehicles and combat aircraft - also contains uranium.
“The people have spoken,” IA leader Mute Egede, 34, told broadcaster DR when asked about Kvanefjeld. “It won’t happen.”
Mikaa Mered, lecturer on Arctic affairs at HEC business school in Paris, said of the outcome: “This will without doubt hamper mining development in Greenland.”
While most Greenlanders see mining as an important path towards independence, the Kvanefjeld mine has been a contention point for years, sowing deep divisions in the government and population over environmental concerns.
“It’s not that Greenlanders don’t want mining, but they don’t want dirty mining,” Mered said, referring to uranium and rare earth projects. “Greenlanders are sending a strong message that for them it’s not worth sacrificing the environment to achieve independence and economic development.”
The island of 56,000 people, which former U.S. President Donald Trump offered to buy in 2019, is part of the Kingdom of Denmark but has broad autonomy.
Egede, who was minister for natural resources in a coalition government from 2016 to 2018, will be first to try to form a new government. A potential government ally could be Naleraq, an independence party that also opposes the Kvanefjeld project.
Support from Prime Minister Kim Kielsen and his governing Siumut party helped license-holder Greenland Minerals gain preliminary approval for the project last year, paving the way for a public hearing.
The Australian firm has already spent more than $100 million preparing the mine and has proven processing technology through its Chinese partner Shenghe Resources.
Greenland Minerals Chief Executive John Mair said the public hearing has “lacked the normal due process” due to the early election.
“This unfortunately created a void that was filled with a wave of misinformation,” he told Reuters on Wednesday. He declined to comment on the election outcome until a new government had been formed.
“The challenge for IA will be to explain to the world that Greenland is still open for business and still an attractive mining jurisdiction,” said Dwayne Menezes, head of London-based think-tank Polar Research and Policy Initiative.
Reporting by Jacob Gronholt-Pedersen; additional reporting by Nikolaj Skydsgaard; Editing by Andrew Heavens and Timothy Heritage