UK-based company London Mining has won a 30-year licence to build and operate a giant iron ore mine in Greenland.
According to Greenland's industry minister, it was the largest commercial project in the history of the autonomous Danish territory.
The company plans to seek investment partners for the multi-billion dollar project.
According to some opponents, the open-cast mine would cause environmental damage; while the plans to bring in around 3,000 Chinese workers have raised concerns in some quarters.
The company said in a statement on its website that the annual production at the mine was expected at 15 million tons of "very high quality iron ore concentrate to the global steel industry".
It added the ore concentrate could be shipped year round from a dedicated deepwater port.
The Greenland government hopes the mine, which would be located around 90 miles from the capital, Nuuk, would boost the economy. The country's economy is largely dependent on fishing and subsidies from Denmark.
Industry and minerals minister Jens-Erik Kirkegaard said it was indeed a historic moment for Greenland.
Greenland has a population of about 56,000 and the Isua project, as the development is called, would help build and operate the mine and related infrastructure.
London Mining, in a report from June 2010, said it had "identified significant economies of scale, and the involvement of Chinese construction groups is anticipated to deliver significant cost savings".
The operating mine, would employ 450 people, is expected to produce iron pellet feed concentrate, which would be shipped to a dedicated deep water port.
The company would pay escalating royalties to the government, with the first five years at 1 per cent, years 6-10: 3 per cent; years 11-15: 4 per cent, rising to 5 per cent after year 16.
According to London Mining, the lower rate in the earlier years recognised the need to protect the payback period for initial development investment once the mine was brought into production.
The company acquired the Isua licence in 2005 from Rio Tinto.
Admitting that financing could be challenging, CEO Graeme Hossie said in a statement , "Although new projects in iron ore currently do face funding challenges, we believe Isua's high quality product segment will become increasingly important to steelmakers to balance the growth in lower quality iron ore supply and the increasing importance of pellets in the evolving iron ore market."
Founded in 2005 to acquire, finance and develop mines for the global steel industry London Mining has so far been focussed on the delivery expansion of its Marampa mine in Sierra Leone.