April 21 (Reuters) - Australia's Greenland Minerals Ltd GGG.AX said on Wednesday it would start a dialogue with Greenland's newly formed government over its Kvanefjeld rare earth mining project which has been facing political opposition.
The Australian miner has sought legal advice, including over its right to be granted an exploitation licence.
Last week, Greenland's left-wing Inuit Ataqatigiit party announced a new government coalition and reiterated its stance to block the project as pledged earlier. mining companies have been pushing for rights to exploit the rare earth deposits in Greenland, which the U.S. Geological Survey says are the world's biggest undeveloped deposits.
Kvanefjeld contains a large deposit of rare earth metals, but also radioactive uranium, which many fear will harm the country's fragile environment.
Earlier in April, Greenland Minerals said uranium was of no great importance to its project, seeking to assuage concerns. Australian explorer, which has been operating in Greenland since 2007, holds the licence for the project and gained preliminary approval for it last year. It plans to continue its public consultation process, which runs until June.
Shares of the miner, which went into a trading halt on Monday, dived more than 18% to A$0.086 on trade resumption. They have slumped about 60% so far this year.