Greenland Resources Secures Long-Term Molybdenum Supply Agreement with Outokumpu
Greenland Resources Inc. has recently announced a landmark agreement with Finnish-based Outokumpu, Europe’s largest and the Americas’ second-largest stainless steel producer. This agreement will ensure a long-term supply of molybdenum oxide, an essential raw material in stainless steel production. The deal is expected to strengthen both companies’ strategic positioning in the global market while addressing supply chain vulnerabilities in Europe.
Details of the Off-Take Agreement The agreement spans a decade and secures approximately eight million pounds of molybdenum per year for Outokumpu. This quantity represents roughly 25% of Greenland Resources’ projected production over the first ten years of operation at its Malmbjerg Molybdenum Project in Greenland.
One of the most significant aspects of the agreement is the establishment of a price floor and cap, which will help both companies navigate fluctuations in the molybdenum market while ensuring cost predictability. These price stabilization mechanisms will allow Outokumpu to plan its raw material procurement while providing Greenland Resources with a reliable revenue stream.
However, the commencement of the off-take obligation is subject to meeting specific customary terms and conditions, which both companies are committed to fulfilling in the near future. As part of the agreement, Outokumpu will also assist Greenland Resources in securing capital expenditure (capex) financing, further strengthening the long-term viability of the Malmbjerg project.
Strategic Importance of the Agreement This deal marks a crucial milestone for Greenland Resources as it moves closer to full-scale commercial production. By securing a major industrial buyer, the company has solidified its standing as a key supplier of molybdenum oxide, a mineral essential for high-strength stainless steel applications. The agreement also underlines the importance of securing stable supply chains in an era of increasing geopolitical tensions and resource nationalism.
Europe is a significant consumer of molybdenum, being the second-largest global market for the metal, yet it has had no domestic production of its own. The partnership between Greenland Resources and Outokumpu is expected to reduce European dependence on molybdenum imports from other regions, strengthening supply chain resilience for critical raw materials.
Outokumpu’s Perspective on the Agreement Marc-Simon Schaar, Chief Financial Officer at Outokumpu, emphasized the importance of securing reliable, sustainable raw materials for the company’s operations. He stated:
“Europe is heavily reliant on imports for many critical raw materials, and this dependence creates vulnerabilities due to geopolitical factors and supply chain disruptions. Furthermore, Europe is the second largest molybdenum user worldwide and has had no production of its own. The cooperation with Greenland Resources allows us to access low-emission molybdenum from Greenland, which strengthens our supply chain of critical raw materials and reduces our Scope 3 emissions at competitive prices, including a cap and a floor mechanism. This further strengthens our long-term raw material availability, complementing our own chrome mine in Finland and our investment in a junior nickel mine project in Canada.”
Outokumpu has been actively working to build a sustainable and competitive supply chain for its raw materials. This agreement complements the company’s ongoing efforts to diversify supply sources and reinforce strategic partnerships for critical metals such as molybdenum, nickel, and chrome. Additionally, securing low-emission molybdenum will help Outokumpu meet its environmental sustainability goals by reducing its carbon footprint while maintaining cost competitiveness.
Greenland Resources’ Perspective on the Partnership Dr. Ruben Shiffman, Executive Chairman of Greenland Resources, expressed his enthusiasm about the agreement and its implications for the company’s growth. He stated:
“We are delighted to partner with Outokumpu for the long-term supply of approximately eighty million pounds of molybdenum oxide (currently trading around US$21 per pound Mo). This constitutes a critical milestone for our company toward achieving commercial production. Our two companies share similar sustainability values and a commitment to responsible mining. The high-quality molybdenum ore and low-emission processing at Malmbjerg are ideally suited to secure long-term supply for Outokumpu’s specialty steel products.”
Greenland Resources is strategically positioning itself as a key player in the global molybdenum market. With demand for high-strength and corrosion-resistant alloys rising, the company’s Malmbjerg Molybdenum Project is poised to become a significant supplier of this critical metal. The agreement with Outokumpu not only validates the quality of Greenland Resources’ ore but also provides a stable revenue stream that will support the company’s long-term expansion plans.
Environmental and Sustainability Considerations Both Greenland Resources and Outokumpu have emphasized their commitment to environmental sustainability and responsible mining practices. The Malmbjerg project is expected to utilize advanced, low-emission processing technologies to minimize its carbon footprint.
One of the main advantages of sourcing molybdenum from Greenland is the project’s relatively lower environmental impact compared to alternative sources in other regions. By securing supply from Greenland, Outokumpu will be able to reduce its Scope 3 emissions, which include indirect greenhouse gas emissions from its supply chain.
Greenland Resources has also pledged to implement stringent environmental management practices, ensuring that mining operations are conducted with minimal ecological disruption. Additionally, the project will create economic opportunities for local communities in Greenland by providing employment and contributing to regional economic development.
Market Implications and Industry Outlook The molybdenum market has experienced fluctuating demand in recent years, driven by trends in the stainless steel, energy, and aerospace industries. With molybdenum currently trading at approximately US$21 per pound, securing long-term supply agreements provides stability for both producers and consumers of the metal.
Outokumpu’s commitment to a long-term supply contract with Greenland Resources reflects confidence in the continued demand for high-quality molybdenum in Europe and North America. The agreement also signals that industrial consumers are seeking more sustainable and geographically secure supply options to mitigate risks associated with global supply chain disruptions.
As geopolitical tensions and resource security concerns continue to shape the global market for critical metals, partnerships like the one between Greenland Resources and Outokumpu are likely to become increasingly important. More industrial buyers may seek long-term agreements with reliable suppliers to ensure stability in raw material procurement.
