October 2, 2014 / 1:28 AM / 5 years ago

Greenland votes to hold parliamentary election in November

(Reuters) - Greenland’s parliament voted on Wednesday to hold an election on Nov. 28 after Prime Minister Aleqa Hammond took a temporary leave of absence over a spending scandal and the opposition lured enough of her supporters to gain a majority.

The 31-seat assembly voted to hold the election, leader of opposition Sara Olsvig told Reuters. Olsvig’s party holds a good chance of winning, polls show, and replacing Hammond who had been prime minister since April of last year.

But the political turmoil is likely to paralyze the government at a critical juncture as international companies such as London Mining Plc and Greenland Minerals and Energy are considering opening iron ore and rare earth mines.

Prime Minister Aleqa Hammond escaped a no-confidence vote on Tuesday but stepped down temporarily until the end of an investigation into her spending of public money on hotels and flights.

The opposition kept up pressure on Wednesday and four ministers in total stepped down from the government, including two from Hammond’s Siumut party and two from junior coalition partner Atassut.

Atassut had bolted to the opposition, according to Olsvig, leader of the largest opposition party, the Inuit Ataqatigiit.

Olsvig said political horsetrading had dominated the day in the assembly with her party at one point being asked to join the coalition government while she negotiated with Atassut.

Greenlandic media said Hammond had stepped down as leader of the Siumut party, but her status in government was unclear.

“When they (Siumut) invited us to negotiate a new coalition, my answer was that I didn’t know who their leader was or who the premier was,” Olsvig said. But she said a coalition with Siumut was out of the question also due to their “bad governance”.

Greenland is a self-ruling country within the Kingdom of Denmark and has a population of about 56,000 people.

Until Wednesday morning, all nine ministers had stood behind Hammond’s argument that government should wait until an audit commission provides its conclusions on her spending, expected on Oct. 20, before taking any action.

Greenland analyst and managing partner at Polarisk consulting firm Mikaa Mered said the turmoil on Wednesday was “driving Greenland towards political chaos that will be quite repellent to many investors from the mining, oil and gas and fishing sectors”.

Siumut mining and natural resources minister Jens-Erik Kirkegaard was one of two from the ruling party to resign.

He had been due to travel to China in three weeks to present Greenland’s mining potential and meet with several Chinese and Australian officials and investors to boost the sector’s interest in the vast Arctic country.

“That will obviously not happen, and it is quite a catastrophe since this journey was one of Greenland’s last chance to save London Mining’s Isua iron ore project,” Mered said.

London Mining has one of the most advanced plans for a mine in Greenland, but its shares have fallen more than 70 percent this week after it warned it did not have enough cash to operate its only existing mine in Sierra Leone.

Reporting by Sabina Zawadzki in Copenhagen, additional reporting by Teis Jensen; Editing by Mark Heinrich and Ken Wills

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