Ruling Siumut party retains slim majority in Greenland election

COPENHAGEN, Nov 29 (Reuters) - Greenland's ruling Siumut Party retained a slim majority in a snap election called after an expenses scandal, according to results issued early on Saturday, but its new leader Kim Kielsen will need to build a coalition to form a government.

Siumut, which has formed every single government in Greenland but one since 1979, won 34.3 percent of the vote. Opposition party Inuit Ataqatigiit, led by Sara Olsvig, won 33.2 percent, Greenland's official election website showed.

Although both parties won the same amount of seats in parliament - 11 each out of a total of 31 - Kielsen is expected to lead coalition negotiations as his party received more votes.

Greenland, whose capital Nuuk is closer to New York than Copenhagen, became a Danish colony in the early 19th century but has been gaining its own powers since World War Two, introducing a parliament in 1979 and self-governance in 2009.

A Siumut-led government may comfort the few foreign investors who have ventured into Greenland to develop mining. The party lifted a ban on uranium mining, opening the door to rare earth projects which often generate uranium as a byproduct.

Inuit Ataqatigiit had vehemently opposed the lifting of the ban and had promised to reinstate it, although the party was keen to emphasise it was not against mining per se.

Greenland's vast mineral and oil potential could form the foundation for complete independence from Denmark. But projects are in limbo due to low commodity prices, uncertainty over regulations, as well as the sheer difficulty of dealing with Greenland's isolation and lack of infrastructure.

(Reporting by Sabina Zawadzki; Editing by Pravin Char)