ARCTIC BUSINESS FORUM YEARBOOK 2015

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2 ARCTIC BUSINESS FORUM YEARBOOK 2015 March 2015 Compiled and edited by Timo Rautajoki Lapland Chamber of Commerce,

3 BARENTS ARCTIC SEA RUSSIA FINLAND sweden NORWAY 4 5

4 Airport Harbour ARCTIC SEA Railway BARENTS norway sweden FINLAND russia 6 7

5 TABLE OF CONTENTS 1. Foreword ARCTIC COUNCIL, ARCTIC POLICIES AND ARCTIC BUSINESS Arctic Economic Council Background and preparatory work of the AEC US Chair in the Arctic Council Arctic Council structure NORTH OF FINLAND Lapland Investment potential Development of the region Oulu Region Investment potential Development of the region Kainuu Region Investment potential Development of the region NORTH OF SWEDEN Norrbotten Investment potential Development of the region Västerbotten Investment potential Development of the region NORTHWEST RUSSIA Murmansk Region Investment potential Development of the region Arkhangelsk Region Investment potential Development of the region SUMMARY AND CONCLUSIONS MAPS AND STATISTICS European High North investment potential projects Industry projects Mining industry projects Energy projects Trade projects Tourism projects Transport infrastructure projects Public investments European High North investment potential 2015 by regions European High North investment potential 2015 by branches of business Main investment projects that start before 2020 by regions Main investment projects that start before 2020 by branches of business European High North investment potential by regions and branches of business NORTH OF NORWAY Finnmark, Troms, Nordland Investment potential Development of the region

6 FOREWORD The cover picture of this Arctic Business Forum Yearbook 2015 describes very well the current situation in the European High North Business. Snow covered road is narrow and it is going over a mountain. There is a traffic sign showing a lower speed limit further up on the road. Economic crisis was downshifting the business cooperation already a couple of years ago. Now we have also political crisis started from Ukraine ready to spread to the Arctic if it is going to further escalate. Sanctions and counter sanctions are limiting business cooperation. This is not the right forum to do politics, but the political situation has its impact on business and investments. Investment potential in the High North is growing all the time, but starting of the projects seems to be far in the future. You are holding the 6th overview on the European High North investments and business development published in association with the Arctic Business Forum. This is the second time the name of the report is Arctic Business Forum Yearbook. The leading idea of this Forum is still to share information about the latest developments affecting the business in the Arctic and discuss the actions to be taken in order to overcome the known and foreseen barriers of business and trade. These six publications are not identical in nature as each year the reporting manner has gained more or less a new approach. This year the presentations of European High North regions is basicly the same as in last years edition. Regional development from 2016 is updated and analyses are based on latest reports and strategies. This year the investment potential shown in the book consists of all possible plans and projects in the regions. Some of them are clearly possible to implement after Closer analysis is targeted to investment projects that could start before There are two scenario alternatives, normal and growth+. Normal means slow recovery of global economy and solution of political crisis. The second scenario describes the process in case the growth is more dynamic than expected. Business Oulu and Kainuun Etu Oy have contributed information to this yearbook. On behalf of Lapland Chamber of Commerce I want to thank Mr. Alpo Merilä from Business Oulu and Ms. Karoliina Heikkinen from Kainuun Etu Oy for their assistance. March 11th, 2015 at Rovaniemi Timo Rautajoki President and CEO Lapland Chamber of Commerce 10 11

7 2. Arctic Council, Arctic Policies and Arctic Business 2.1. Arctic Economic Council Arctic Economic Council (AEC) was the most important goal of the Canadian Arctic Council chair. This council was established in September 2014 after more than one year active preparatory work by special Task Force. Founding meeting was in Iqaluit, Nunavut on Meeting decided that the AEC is an independent organization created by the Arctic Council that will facilitate Arctic business-to-business activities and responsible economic development, as well as the sharing of best practices, technological solutions, standards and other information. The AEC consists of 42 business representatives appointed by the Arctic states and indigenous organizations. The AEC has selected a small inaugural Executive Committee to guide its initial work to be lead by the chair Tom Paddonfrom Canada, vice chairs Tero Vauraste from Finland, Tara Sweeney from the United States who represents the Inuit Circumpolar Council, and Evgeny Ambrosov from Russia. Initial administrative support for the AEC is being provided by Canada, and an offer by the Norwegian business community to support the AEC s administrative costs going forward was accepted in principle. During the work of the task force AEC was planned to be included to the Arctic Council as some kind of associate organisation reporting to ministerial meetings. In spite of this the AEC was established as an independent organisation. Arctic Council website describes the relationship with AEC so that as an independent body, the AEC will decide on its membership, roles and responsibilities, governance, structure, and activities, while ensuring strong participation from indigenous businesses. It may inform the work of the Arctic Council through the views of business. Question regarding the secretariat of AEC has been on the agenda from the very beginning of the Task Force. First St. Petersburg was ready to take over it with big economical benefits to AEC within the first years. Then Norway has been offering Tromsö with economical benefits. Russian government has confirmed that St. Petersburg is still ready to help with secretariat. And finally also Alaska has made its own offer for host the AEC secretariat. Obviously AEC Executive Committee is going to decide about the secretariat in next AEC meeting during Arctic Council ministerial meeting in April 2015 in Ottawa and the location is probably Tromsö due to strong economic support from Norway. EAC is establishing also six working groups to analyze the arctic business. Working groups are for infrastructure with several subgroups, energy, tourism, fishing and human resources. Each working group is analyzing the business sector regarding main themes as establishing strong market connections between the Arctic states; encouraging public-private partnerships for infrastructure investments; creating stable and predictable regulatory frameworks; facilitating knowledge and data exchange between industry and academia; and traditional indigenous knowledge, stewardship and a focus on small businesses. The work in groups should result in actionable recommendations to facilitate trade, investment and industry collaboration, and to eliminate identified barriers. It should follow these four basic steps: by analyzing the current status of the business area in relation to one or two overarching themes; by defining actionable recommendations and items that will address the current status quo; by starting executing on identified actions; and by reports and reviews

8 Some working groups have already began their work. Working group members have been selected from outside the group of AEC representatives. The operating term for each working group will be 1-2 years depending on the need for analysis and implementation of recommended actions Background and preparatory work of the AEC The Circumpolar Business Forum initiative was worked out in special Task Force simply called: Task Force to Facilitate the Circumpolar Business Forum (TFCBF). The mandate of TFCBF has been to facilitate the creation of a Circumpolar Business Forum (CBF) which would provide a mechanism to allow business and industry to engage with the Arctic States and Permanent Participants. TFCBF had its first meeting in September 2013 and gave a report to SAOs by the end of Canada is chairing the TFCBF in cooperation with Finland, Iceland and Russia. The purpose of the proposed forum, as articulated in the Senior Arctic Officials Report to Ministers in Kiruna is to provide a mechanism to allow business and industry to engage with the Arctic States and Permanent Participants. The CBF would provide a venue for businesses, industries and indigenous enterprises to advance Arctic-oriented interests, share best practices, forge partnerships and engage in deeper cooperation. The Task Force had its third face-to-face meeting in Helsinki on December 4-5, 2013 to discuss the scope and mandate of the proposed body and how it would work with the Arctic Council. The meeting also included business participants from all of the Arctic States and a number of representatives from observers to the Arctic Council. The two-day meeting focused on reaching consensus on a framework document which outlines the Arctic Council s expectations of the new business entity, as well as how the Arctic Council and the business entity will interact. The Task Force also reached tentative agreement on a new name for the circumpolar business forum, which will be called the Arctic Economic Council. Fostering Circumpolar Business Partnerships The Arctic Council recognizes the central role of business in the sustainable development of the Arctic. During Canada s Chairmanship ( ), the Arctic states and indigenous permanent participant organizations are facilitating the creation of a circumpolar business forum - the Arctic Economic Council. In the Kiruna Declaration, signed at the eighth Arctic Council Ministerial Meeting in May, 2013, Ministers from the eight Arctic Council states recognize[d] that Arctic economic endeavors are integral to sustainable development for peoples and communities in the region, desire[d] to further enhance the work of the Arctic Council to promote dynamic and sustainable Arctic economies and best practices, and decide[d] to establish a Task Force to facilitate the creation of a circumpolar business forum. The Task Force to Facilitate the Circumpolar Business Forum (TFCBF) is co-chaired by Canada, Finland, Iceland and Russia. Since May 2013, the task force has been meeting regularly to pave the way for the creation of this body. In December 2013, the Task Force proposed a new name for the circumpolar business forum, which Senior Arctic Officials approved in January The forum is now called the Arctic Economic Council. The Arctic Economic Council will: foster business development in the Arctic, engage in deeper circumpolar cooperation, and provide a business perspective to the work of the Arctic Council

9 2.3. US Chair in the Arctic Council USA is taking over the chair of Arctic Council from Canada in the next ministerial meeting of the AC in April The United States participates in the Arctic Council under the leadership of the Department of State. Many other agencies, including the Departments of Interior, Energy, Commerce (NOAA), Transportation (FAA), and Homeland Security (Coast Guard), the Environmental Protection Agency, the National Science Foundation, the Arctic Research Commission, and the State of Alaska support or actively participate in the Arctic Council s work. At Arctic Council meeting in Yellowknife, Canada, the U.S. Department of State announced key initiatives that it plans on pursuing when it assumes the two year Chair of the eight-nation council in April These initiatives, presented under the theme of One Arctic: Shared Opportunities, Challenges, and Responsibilities, will focus largely on reducing the causes of and impacts from climate change and will include projects ranging from reducing emissions of short lived climate pollutants to developing a circumpolar Arctic network of Marine Protected Areas. The U.S. announced their priority programs in three distinct thematic areas: 1. Addressing the Impacts of Climate Change in the Arctic, 2. Stewardship of the Arctic Ocean, and 3. Improving Economic and Living Conditions in the Arctic. As climate change is causing the remote Arctic ecosystems to change more rapidly than any other region on the planet, Ocean Conservancy applauds the ambitious and comprehensive nature of these initiatives. Ocean Conservancy previously undertook an in-depth review of the current state of Arctic science and management. We recommended that the U.S. take this opportunity to begin the difficult but urgent process of marine spatial planning and conservation by developing a regional seas program for the Arctic Ocean, protecting important ecological areas, and addressing climate pollutants that are the underlying cause of wildlife and habitat declines in the globally unique Arctic marine environment. We are proud to report that all of these components were prominent in the U.S. plans. The U.S. priorities represent a significant move forward from the Economic Development focus of the conservative Canadian government the current Chair and were well received by the eight Arctic nations and six indigenous Permanent Participant organizations who sit at the table. While we cannot solve the multitude of issues confronting the Arctic during the two-year U.S. Chair, we can continue our progress in 2017 and beyond when the conservation-minded Finnish government assumes the Chair. There will still be a focus on improving living conditions and encouraging sustainable development in remote Arctic communities through programs such as renewable energy initiatives and protecting freshwater resources. The U.S. conservation priorities, however, will help the Council, which was founded in the 1990s as an outgrowth of the Arctic Environmental Protection Strategy, get back to its roots and address the ecological changes in the rapidly melting Arctic. This will occur with management and coordination through a regional seas agreement and program, and at site specific levels, including enacting protections for important ecological areas and habitat for Arctic wildlife. The U.S. focus on climate change is particularly important now that other large emitters, including China, the European Union, and India, have been admitted to the Arctic Council as Observers. This means that the Arctic Council will be another venue for collaborative work on reducing emissions of climate pollutants. With the recent announcement of a bilateral U.S. and China program to reduce emissions, Ocean Conservancy has high hopes that this work will continue and expand through focused dialogue at the Arctic Council

10 Further signaling the U.S. commitment to using the two year Chair of the Arctic Council to achieve real progress in saving the Arctic was the announcement that Secretary of State John Kerry himself will act as the Chair of the Council and that the U.S. will undertake both public outreach and scientific initiatives to help us better understand the Arctic and the challenges that wildlife and communities are confronting with the impacts of climate change. As one of only two conservation organizations accredited to work at the Arctic Council, Ocean Conservancy looks forward to using our unique access to this high level intergovernmental forum to ensure that these ambitious initiatives to save the Arctic and its wildlife are achieved. The US chair program in the Arctic Council has nothing about business cooperation or Arctic Economic Council. Just established AEC is not recognized by US Government. It looks strange that the most important goal of Canadian chair, the AEC has to start the real work without any connection with the US chair in Arctic Council. This is going to be a problem for next two years. Finland is taking over the Arctic Council chair in 2017 after the USA. Finland has been very active in the preparatory work of the AEC and it is obvious that connection between AC and AEC becomes at least as close as with the Canadian chair. But the question remains. What is the AEC doing these two years? Can some kind of unofficial connection be found with the Obama administration? Admiral Robert J. Papp, Jr., USCG (Ret.) became the State Department s Special Representative for the Arctic in July of 2014, and will lead the effort to advance U.S. interests in the Arctic Region, with a focus on Arctic Ocean governance, climate change, economic, environmental, and security issues in the Arctic region as the United States prepares to assume the chairmanship of the Arctic Council in 2015 according to the State Department. Admiral Papp visited Finland in the end of January Mr. Papp admitted that Arctic Economic Council is difficult for US Government. Fran Ulmer is another important person in the US Arctic Council chair team. She is chair of the U.S. Arctic Research Commission, where she has served since being appointed by President Obama in March In June 2010, President Obama appointed her to the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling. From 2007 to 2011, Ms. Ulmer was chancellor of Alaska s largest public university, the University of Alaska Anchorage (UAA). Before that, she was a Distinguished Visiting Professor of Public Policy and Director of the Institute of Social and Economic Research at UAA. She is a member of the Global Board of the Nature Conservancy and on the Board of the National Parks. The US Secretary of State, Mr. John Kerry announced already one year ago that a special envoy to the arctic is going to be appointed soon. Nothing has so far happened. Neither Rober J. Papp or Fran Ulmer have no nomination to US arctic ambassador. It is very interesting to see if nomination happens before USA is taking the Arctic Council chair in April Arctic Council structure The Arctic Council was formally established by Ottawa Declaration of 1996 as a high level intergovernmental forum to provide a means for promoting cooperation, coordination and interaction among the Arctic States, with the involvement of the Arctic Indigenous communities and other Arctic inhabitants on common Arctic issues, in particular issues of sustainable development and environmental protection in the Arctic. Arctic Council Member States are Canada, Denmark (including Greenland and the Faroe Islands), Finland, Iceland, Norway, Russian Federation, Sweden, and the United States of America

11 In addition to the Member States, the Arctic Council has the category of Permanent Participants. Out of a total of 4 million inhabitants of the Arctic, approximately 500,000 belong to indigenous peoples. Indigenous peoples organizations have been granted Permanent Participants status in the Arctic Council. The Permanent Participants have full consultation rights in connection with the Council s negotiations and decisions. The Permanent Participants represent a unique feature of the Arctic Council, and they make valuable contributions to its activities in all areas. The following organizations are Permanent Participants of the Arctic Council: Arctic Athabaskan Council (AAC) Aleut International Association (AIA) Gwich in Council International (GCI) Inuit Circumpolar Council (ICC) Russian Association of Indigenous Peoples of the North (RAIPON) Saami Council (SC) This category is open equally to Arctic organizations of Indigenous peoples with a majority of Arctic Indigenous constituency representing: a single Indigenous people resident in more than one Arctic State; or more than one Arctic Indigenous people resident in a single Arctic State. In the determination by the Council of the general suitability of an applicant for observer status the Council will, inter alia, take into account the extent to which observers: Accept and support the objectives of the Arctic Council defined in the Ottawa declaration. Recognize Arctic States sovereignty, sovereign rights and jurisdiction in the Arctic. Recognize that an extensive legal framework applies to the Arctic Ocean including, notably, the Law of the Sea, and that this framework provides a solid foundation for responsible management of this ocean. Respect the values, interests, culture and traditions of Arctic indigenous peoples and other Arctic inhabitants. Have demonstrated a political willingness as well as financial ability to contribute to the work of the Permanent Participants and other Arctic indigenous peoples. Have demonstrated their Arctic interests and expertise relevant to the work of the Arctic Council. Have demonstrated a concrete interest and ability to support the work of the Arctic Council, including through partnerships with member states and Permanent Participants bringing Arctic concerns to global decision making bodies. The Arctic Council has also observers. As set out in the Declaration on the Establishment of the Arctic Council and governed by the Arctic Council Rules of Procedure, observer status in the Arctic Council is open to non-arctic States; inter-governmental and inter-parliamentary organizations, global and regional; and non-governmental organizations that the Council determines can contribute to its work

12 Decisions at all levels in the Arctic Council are the exclusive right and responsibility of the eight Arctic States with the involvement of the Permanent Participants. Observers shall be invited to the meetings of the Arctic Council once observer status has been granted. While the primary role of observers is to observe the work of the Arctic Council, observers should continue to make relevant contributions through their engagement in the Arctic Council primarily at the level of Working Groups. Observers may propose projects through an Arctic State or a Permanent Participant but financial contributions from observers to any given project may not exceed the financing from Arctic States, unless otherwise decided by the SAOs. In meetings of the Council s subsidiary bodies to which observers have been invited to participate, observers may, at the discretion of the Chair, make statements after Arctic states and Permanent Participants, present written statements, submit relevant documents and provide views on the issues under discussion. Observers may also submit written statements at Ministerial meetings. At the Kiruna Ministerial Meeting in May 2013 an Arctic Council Observer Manual was formally adopted. Also in Kiruna the following 12 non-arctic countries have been admitted as observers to the Arctic Council: 1. France 2. Germany 3. The Netherlands 4. Poland 5. Spain 6. United Kingdom 7. People s Republic of China 8. Italian Republic 9. State of Japan 10. Republic of Korea 11. Republic of Singapore 12. Republic of India Also nine Intergovernmental and Inter-Parliamentary Organizations have been given observer status: 1. International Federation of Red Cross & Red Crescent Societies (IFRC) 2. International Union for the Conservation of Nature (IUCN) 3. Nordic Council of Ministers (NCM) 4. Nordic Environment Finance Corporation (NEFCO) 5. North Atlantic Marine Mammal Commission (NAMMCO) 6. Standing Committee of the Parliamentarians of the Arctic Region (SCPAR) 7. United Nations Economic Commission for Europe (UN-ECE) 8. United Nations Development Program (UNDP) 9. United Nations Environment Program (UNEP) In addition, the The Arctic Council receives the application of the EU for observer status affirmatively, but defers a final decision on implementation until the Council ministers are agreed by consensus that the concerns of Council members, addressed by the President of the European Commission in his letter of 8 May are resolved, with the understanding that the EU may observe Council proceedings until such time as the Council acts on the letter s proposals. Eleven Non-government organizations are observers in the Arctic Council: 1. Advisory Committee on Protection of the Seas (ACOPS) 2. Arctic Cultural Gateway 3. Association of World Reindeer Herders (AWRH) 4. Circumpolar Conservation Union (CCU) 5. International Arctic Science Committee (IASC) 6. International Arctic Social Sciences Association (IASSA) 7. International Union for Circumpolar Health (IUCH) 8. International Work Group for Indigenous Affairs (IWGIA) 9. Northern Forum (NF) 10. University of the Arctic (UArctic) 11. World Wide Fund for Nature-Global Arctic Program (WWF) 22 23

13 The Council s activities are conducted in six working groups. The working groups are composed of representatives at expert level from sectoral ministries, government agencies and researchers.their work covers a broad field of subjects, from climate change to emergency response. There are six Working Groups of the Arctic Council: 1. Arctic Contaminants Action Program (ACAP) 2. Arctic Monitoring and Assessment Programme (AMAP) 3. Conservation of Arctic Flora and Fauna (CAFF) 4. Emergency Prevention, Preparedness and Response (EPPR) 5. Protection of the Arctic Marine Environment (PAME) 6. Sustainable Development Working Group (SDWG) Each Working Group has a specific mandate under which it operates. Also working groups have a Chair hand Management Board or Steering Committee, and is supported by a Secretariat. Working Group Management Boards are typically comprised of representatives of national governmental agencies of the Arctic Council Member States, connected to the mandates of the Working Groups; and representatives of the Permanent Participants. Principle of Consensus: All decisions of the Arctic Council and its subsidiary bodies are by consensus of the eight Arctic Member States. The Arctic Council Secretariat supports the Chair of the Arctic Council. In the past, the location of the Secretariat was rotated biennially with the Chairmanship of the Arctic Council. Prior to their consecutive chairmanship periods, Norway, Denmark, and Sweden made a joint agreement to share the Secretariat for the duration of their chairmanship periods. Norway held the chairmanship from 2006-spring 2009; Denmark from ; and Sweden from During this period the temporary Secretariat was hosted by the Norwegian Polar Institute located at the Fram Centre, Tromsø, Norway. At the Nuuk Ministerial Meeting May 2011 Arctic Ministers decided to establish the Standing Arctic Council Secretariat at the Fram Centre in Tromsø. The Standing Secretariat became operational 1 June The Fram Centre houses many Arctic institutions and companies focusing on environmental research and cooperation in the Arctic. Observer States and Observer Organizations are likely to attend Working Group meetings and participate in specific projects. In addition, Working Groups regularly have invited guests, or experts attending their meetings. It is the responsibility of the Working Groups to execute the programs and projects mandated by the Arctic Council Ministers. These mandates are stated in the Ministerial Declarations, the official documents that result from Ministerial Meetings

14 3. NORTH OF FINLAND - LAPLAND Airport Harbour Railway ARCTIC SEA 3.1 Lapland Lapland is the northernmost county of Finland with about inhabitants. About 4500 of inhabitants are indigenous Samí people. The total area of the county is km2, which equals to 30% of the whole of Finland. Lapland is sharing borders with Sweden, Norway and Russia, altogether 1642 km. There are two international border crossings to Russia, six to Sweden and six to Norway. The six subregions of Kemi-Tornio, East Lapland, the Valley of Tornio, Northern Lapland, the Region of Rovaniemi and Fell Lapland form the region of Lapland. Rovaniemi is the administrative capital of Lapland with appr inhabitants. The other cities in Lapland are Kemi appr inhabitants, Tornio appr inhabitants and Kemijärvi appr inhabitants. Business in Lapland Clean nature and abundant natural resources provide a unique, solid foundation for the business sector in Lapland. The cornerstones of the region s economy are forest industry, metal industry, mining industry, forestry and tourism. The energy sector, too, will play an increasingly important role in the economy in future. norway sweden FINLAND russia Economic uncertainty caused by Global financial crisis and continuing poor demand in export industry has reflected in the economic development of Lapland. The decline in international demand has had a negative impact especially in the export industry and building sector. Economic growth of Lapland has, however, been more positive than the national level growth. The strong growth in Tourism and mining industry have affected also to other branches of business, like trade and business to business services

15 The total turnover of the all companies in Lapland has climbed 4% over the year 2008 level, when the financial crisis started. The export from Lapland has reached also the level of Business to Business services have made biggest growth compared with the 2008 level. Growth is more than 15%. Other growing branches of business are transport and logistics (growth 14%), tourism (growth 13%) and trade (growth 12%). Industry is still about 6% behind the year 2008 level with building and construction (-4%). Compared with other Finnish regions the development of Lapland has been almost unique. Key economic figures of Lapland: Population Jobs Total amount of companies Total turnover of all companies 10 bln. Value of industrial export 3.7 bln. (No. 5 of regions in Finland) Industry is the most important branch of business in Lapland. Total turnover of industry is 4.7 bln and it has about employees. Number two business is trade with turnover of more than 2 bln and over employees. Building sector is number three with 800 m turnover and over 4000 employees. Then is transport and logistics with 500 m turnover and almost 4000 employees. Tourism is next with 400 m turnover and employees. Mining is smaller with 300 m turnover and employees, but after recent openings of two mines and one mine expansion the numbers are rapidly rising. The industrial strategy of Lapland provides guidelines for securing industrial growth and internationalisation, developing the operating environment and targeting public aid measures. The strategy assesses development prospects in the industrial sector over a long time span until 2030 and sets short and medium term objectives for promoting growth. Industrial vision for Lapland in 2030: Lapland grows by nature. The cornerstone of industry in Lapland is the sustainable refining of natural resources. The industry and operating environment in Lapland have reached a level where Lapland attracts new companies and employees by nature. Industrial actors in Lapland are internationally appreciated network partners. Industrial growth in Lapland stems from innovativeness and arctic competence. The following strategic objectives have been set for the industrial development: 1. Growth and vitality based on value added: Growth in the value added of industry in Lapland promotes vitality and well-being in Lapland. 2. Fast reaction capacity/agility: Early identification of changes in the operational environment, reacting to them and using them as a competitive asset. 3. Best available technology: Industrial companies in Lapland always apply and make use of the best available technology (BAT) in a competitive manner. 4. Strategic partners: Actors in Lapland develop new applications in collaboration with the world s leading actors. 5. Growth in intellectual capital: The constant strengthening of intellectual capital is the key to increasing innovativeness, improving costeffectiveness, strengthening global competitiveness and boosting economic growth. 6. Respecting people and nature: Natural resources are refined with a view to respecting people and nature, together with developing other means of living

16 In the long term, sustainable industrial growth in Lapland relies on refining Lapland s own natural resources into high-quality products that attract demand on the global market. In addition to metal, energy, extractive, forest, wood product, food and organic product industry, which are based on refining natural resources, growth opportunities are also available to machine and equipment manufacturers, maintenance service providers, logistics companies and industrial construction firms, which offer services to the above types of industry. By 2030, the sectors investigated in the industrial strategy for Lapland aim to reach a total turnover of EUR 9.8 billion and provide employment to people. Development measures are outlined in development programmes, which are targeted at developing companies, identifying growing markets, helping companies enter markets and building an operational environment that supports the development of companies and defines priority areas and measures for eliminating critical bottlenecks. Growth-impairing bottlenecks will be eliminated through concrete development projects. Energy The abundant energy resources of Lapland have long enabled it to produce energy for its own needs and for the rest of Finland, too. Lapland utilizes a plenty of hydropower, local wood fuels, peat and waste liquor from the forest industry. At present, Lapland s self-sufficiency in electricity production is slightly more than it needs, and renewable energy accounts for over 90 % of electricity production. In industry, particularly, heat generated is used for its own production and in population centres it is supplied to the district heat networks. The trend in future energy consumption is above all dependent on the development of industry and the service sector in the Lapland. Forecasted development such as the investments of the Tornio steel mill, mining projects and growing tourism will increase energy consumption significantly. More renewable and low-emission energy production, especially, is also needed in the whole of Finland, as a nation. On the other hand, energy efficiency and new technology solutions should be developed further. Lapland s large energy resources make it possible to increase production in a sustainable way and the northern conditions lay a good basis for development of new solutions and local know-how both in energy production and consumption. Sustainability and self-sufficiency are Lapland s commonly agreed energy visions. The objective is to utilize Lapland s large energy resources so that Lappish knowledge and regional economy will develop and energy solutions support Lapland s vitality. Lapland s investments are channelled into competitive energy solutions, which also support means of livelihood and regional economy, making use of northern abilities and creativity. Energy resources are utilized respecting the environment and Lapland s unique nature. Energy production in the future will also be more diverse based on several different production technologies and fuels so that all potential will be utilized. The objective is that Lapland s own knowhow and business activities are supported so that in the future Lapland will be known for its role as a developer and user of energy production and saving solutions which are suitable for northern conditions. To attain the agreed objectives the strategy outlines key projects which focus on increasing the use of local energy resources, especially, forest energy, peat, hydropower and wind power and in addition, on developing energy saving. To ensure the development of Lapland s own knowledge and skill some key projects have been defined which support education and creation of innovations in schools, research institutes and companies. Developing networks of cooperation is particularly important. The implementation of the projects according to the energy strategy has a direct effect on regional economy by bringing to Lapland more income from real estate and other tax revenues and by increasing employment. The most significant sources of real estate tax income are hydro power and wind power (in future to a more extent). The increase in the combined real estate tax of the energy projects according to the energy strategy is estimated at approximately EUR million provided that all projects 30 31

17 are carried out. In Finland real estate tax money goes to the local municipalities. Remarkable employment and income effect will come due to the construction of the mentioned investment projects and construction, operation and fuel supply of a biofuel-based new power plants and a possible biodiesel refinery. The construction of these energy projects could increase employment in Lapland with a total of even man-years. The effects on employment figures during the operation of the plants are also significant. According to the strategy, the use of local fuels, primarily forest chips and peat, could mean a direct increase in annual employment figures by 1000 man-years, in case a new big power plant in the city of Rovaniemi and a biodiesel refinery in the city of Kemi were implemented and the forest energy potential of Lapland were effectively utilized. In addition, the direct increase in employment figures during the operation of a nuclear power plant is estimated to be approximately man-years. Impacts on carbon dioxide emissions depend heavily on the quantity of forest energy which is used to replace peat and coal. Without a huge increase in the use of wood fuels, carbon emissions from power and heat production will grow in Lapland slightly from the current level by the year Efficient utilization of wood fuels can reduce emissions by about % from the current level. Increasing the production of local renewable energy as specified in the energy strategy also supports significantly the achieving the objectives of Finland s and the EU s climate and renewable energy policy. It is important to notice, that already at the present situation, renewable energy accounts for over 90 % of all electricity produced in the region of Lapland. Tourism Total income of Lapland tourism business is about 700 million. Tourism impact on employment is more than man-years. In 2012 total turnover of all tourism companies (in Lapland 1.586) was 471 million. Amount of registered overnights per year is 2.5 million. In 2013 number of registered international tourists was for the first time in history over one million. Great Britain is number one nationality in Lapland. Russia, Germany, France and Norway are following. The biggest growth has been in groups coming from Japan and China. The most important strategic issues in Lapland s tourism strategy include improved accessibility, growing international and all-year-round tourism demand through vigorous sales and marketing efforts. Lapland tourism will seek growth in international markets, and a major challenge is to generate more all-year-round demand for Lapland tourism products. A serious hindrance to the development of all-year-round service supply is the fact that Lapland has occasionally poor accessibility, especially outside the high seasons of Christmas and midwinter months. The tourism strategy seeks solutions to improve accessibility, but it is equally important to have an overall perspective on development measures. If international tourism demand could be guaranteed on an all-year-round basis, accessibility would improve automatically. In order to increase successfully all-year-round demand from international markets, stronger emphasis on sales and marketing measures will be necessary. Marketing development will require joint commitment, long-term cooperation and ample resources from municipalities and tourism industry. One method to develop sales and marketing is e-commerce. Finland is regarded as high-technology country but in this field of business we lag behind, although Lapland has positive prospects to develop into a strong e-commerce actor. Intensive network cooperation between tourism industry, research and education, and other operators will be necessary, however. The need for extensive, accurate, and multiple research data is essential for tourism development. When planning effective foreign marketing measures, for example, it will be necessary to secure the continuous supply of updated information on consumer behaviour, market situation, and future trends within the industry. Similarly, we need information about the development within tourism industry as well as the employment and revenue effects of the trade in order to direct public funding to suitable projects, and to make reliable evaluations of their results. The tourism research programme of Lapland will provide an extensive network of operators and create excellent conditions for producing high-quality research data to the industry. Within the present tourism boom, it will be obligatory 32 33

18 to pay special attention to the standards of construction, planning, and natural surroundings. In tourism development, the major distinctive attractions must be protected and the surroundings kept pleasant for both visitors and local inhabitants. Transport system of Lapland Major changes also requiring the development of the transport system have taken place in the international and national operational environment and in Lapland s development prospects and development strategies. The most important changes are the strong development of mining and tourism and the increasingly prominent role of the Arctic Region. The concentration of population in the sub-regions of Rovaniemi and Kemi- Tornio, decrease in the number of population in sparsely populated areas and the simultaneous increase in the number of the elderly also impose growing challenges to the maintenance of Lapland s transport system and to targeting development measures. At the same time, scarce financing is available to the transport system, and the implementation of largescale investments is becoming more difficult. The transport system should be capable of supporting the development prospects of the key business sectors in Lapland (the mining, metal and forest industry and tourism), the safe everyday mobility of people, and the accessibility of services in urban and sparsely populated areas. It is very important to improve the accessibility of the region and to utilise Lapland s favourable transportation and logistics position as part of the broad, developing Arctic Region. There is also need to develop cooperation and unanimously promote major investments in the region. The development strategy underlying Lapland s transport system is based on national and regional goals and guidelines, verified development needs and the goals set for developing the system. The guidelines presented in the development strategy steer the defining of more specific measures, their prioritisation, and the choices to be made in the scarce financing and resourcing environment. The key point of departure is to secure daily operability and the organisation of moderately priced transport services, taking into consideration the special features of Lapland and the new development prospects for mining, for instance, which call for large investments. Major investments are also important in view of the ability of Finland as a whole to profit maximally from the development of the Arctic Region and the opportunities offered by the opening up of the North-East Passage. Major road and rail investments decided at the national level are of key importance to secure Lapland s development prospects and the accessibility of Lapland in general. The increasingly prominent role of the north, with the new opportunities opening up in future, calls for large road and rail investments particularly in the long term. Investments in urban regions are also important with regard to combining transport and land use. Rail network investments benefit the business sector in particular, while opening up new opportunities to mobility among Lapland s local inhabitants and tourists, for instance. Considering that Lapland is characterised by long distances, major road network investments are important for safe, fluent travel and for transport in the business sector. Major spearhead investment projects in Lapland are the improvement of trunk road 4 at Rovaniemi and between Oulu and Kemi, of trunk road 21 between Palojoensuu and Kilpisjärvi, and of the service standard in the Seinäjoki-Oulu rail connection, which lies outside Lapland but is important in view of Northern Finland as a whole. Mining and the logistic position of Lapland; important projects in the future will be the electrification and renovation of the Kemi-Kolari rail connection, development of Ajos Port, which will include deepening the maritime access route and developing road and rail connections, and the provision of new rail and road connections required by new mines/ improvement of the existing connections. Connection alternatives important to mining, involving the Arctic Ocean port and utilisation of the North-East Passage; an exhaustive account should be drawn up of the various alternatives, and the results will be used as the basis of land use and transport planning in future

19 Safe, fluent travel facilitates people s everyday life. Fluent travel is also important to the business sector, including commuting and work-related travel in the region, tourism and the accessibility of the region. Lapland s external accessibility will be improved by developing air and rail traffic and the fluency of road traffic. Air traffic as a long-distance connection plays the most prominent role in view of accessibility. In mobility within the region, account is taken of long distances and also of promoting the use of sustainable means of travel in cases where this is realistic. It is possible to improve the accessibility of places of work and services in urban regions and tourism centres by promoting public transport and pedestrian and bicycle traffic. In other parts of Lapland, however, long distances essentially require the use of private cars, and the special challenge there is to secure mobility among people who have no car and who live in sparsely populated areas. As for the accessibility of services, it is also important to improve electronic services and introduce services to sparsely populated areas through new means. Key development guidelines for developing safe, fluent travel: Developing long-distance travel chains to address the needs of tourists and local people. Developing air traffic together with the tourism sector, Finavia and traffic operators. Improving the competitiveness of public transport broadly in cases where sufficient demand is available. Securing the accessibility of the most important places of work through public transport. Securing the basic service level in public transport in low-demand areas and mitigating the growth of transportation costs in the society as a whole. Securing daily operability in vehicle traffic. Targeting pedestrian and bicycle traffic development measures to potential areas. Improving traffic safety and accessibility through prioritised means and by influencing attitudes more effectively. Securing daily operability throughout the road and street network through maintenance activities. Clarifying administrative responsibilities in off road traffic. It is vital that telecommunications connections and electronic services are developed in the region, which is characterised by long distances. Business sector transports and logistics place a wealth of requirements on the transport system. Large investments will have to be made in order to improve the cost efficiency of transports and to offer new development prospects in the long term, and work done largely at the regional and areal level to enhance the efficiency of the logistic system. All in all it is important to develop the logistic position and competitiveness of Lapland as a whole

20 Key development guidelines for developing transports and logistics in the business sector: Improving the cost efficiency of transports by prioritising the needs of mining and other heavy industry. In development efforts, attention is paid to the position of Kemi-Tornio sub-region as the hub of transport corridors and the increased importance of the Arctic Ocean as part of the development of the Arctic Region and the prominence of the North-East Passage. From the point of view of cost-effective transports, it is important to secure the fluency of winter navigation and to maintain the road and street networks in good condition, in addition to large- scale road and rail investments. The effects of a stricter sulphur limit to be imposed on transports on the Baltic Sea should be minimised. The stricter limit is scheduled to enter into force in 2025, i.e. at the same time as in other sea areas. Developing the hubs of the logistic system as a networked entity (ports, logistics centres, concentration of logistic operations, combined transports, roundwood terminals, terminal network). Developing logistics services, expertise and cooperation systematically (developing vocational logistics education and improving the attractiveness of the sector, developing regional logistics cooperation, combining transports in sparsely populated areas, developing procurement cooperation, introducing effective information systems, telecommunications connections and electronic services). Developing cooperation and policies is an integral part of developing the transport system in the region. Through fluent cooperation, it is possible to react to quick changes in the operational environment and to support continuous, coordinated regional transport system development work. Regional cooperation also supports a shift from competition between sub-regions towards a regionally consistent overall approach. In addition, when financing is collaboratively targeted more effectively and based on users needs, it is possible to achieve better service standards with the existing, scarce resources. Mitigating climate change and adapting to it will be taken into consideration as a precondition for all types of operation. However, it is important to make sure that the mitigation measures are realistic and to point out that the effects of measures concerning transport pricing, for instance, should be recognised at the national level. Key cooperation and policy development guidelines: Lapland should be active in cooperation forums in the Arctic Region. Setting up a regional transport system working group in Lapland. The group will replace the current road transport working group and be responsible for coordinating regional transport system work in future. Combining transport and land use planning and implementation at all levels. Developing the operation of transport and land use working groups and eliminating overlapping work. Taking active measures to contribute to transport system financing and increase of regional decision-making power. Committing decision-makers to the guidelines presented in the plan. Drawing up a regional letter of intent of the spearhead tasks for the next few years. The Finnish Transport Agency published in 2013 working group report summary regarding the transport needs of Mining industry. According to the summary conclusion it is essential in the immediate and future development of transport infrastructure how the transport and travel needs of extractive industry and other industries develop, what is done in the neighbouring countries of Finland to develop transport routes, and, for example, to use the Arctic Sea connections, and how the transport equipment develops. The needs must be covered in planning, and that requires international co-operation. The transport needs become more specific based on individual mine decisions, and then more detailed planning and implementation needs can be programmed. In the near future, Northern and Eastern Finland mining transport between Europe and far-off countries will be implemented via the Bothnian Bay harbours, irrespective of the sulphur directive. Other transport needs of the industries in the area 38 39

21 do not alone significantly impact the mining transport and route selections, but it is expedient to integrate those. In regional zoning, it is good to already take into account the future needs that are visible. The following presents the most significant needs for further actions based on this report. Next 1 5 years Improvement measures (in total about 50 million euros) related to eliminating the bottlenecks of the existing services and transport networks of current mines will be planned and implemented. Small improvements to transport services will be planned and implemented case by case when new mines are launched. Further clarification and planning of current transport services will be started for the increasing mining transports that are within sight. They include e.g. Highway 4 from Middle Lapland to Oulu and highway 21 The capacity of the railway network in sections Ylivieska Oulu Kemi, Kemijärvi Rovaniemi Laurila, Vartius Oulu and possible new freight transfer terminals Kolari and Sokli rail links after the mine decisions Growing the capacity of the Bothnian Bay harbours (harbours own decisions) and deepening of sea routes based on the demand and the sea traffic strategy of Finland and project assessments. The opportunities to use heavier than normal road transport and the impact on mining transport will be clarified. A land use reservation will be made in the regional plan for a new railway line to Sodankylä. Medium-term 5 15 years The track and road investments required by the Kolari and Sokli mines will be implemented, provided that the mines will be opened according to plans and the funding of the lines have been agreed upon between the different parties. After the possible Middle Lapland mine decisions, the further planning and building needs of the Sodankylä Rovaniemi/Kemijärvi line will be clarified Improvement measures required by the existing transport network will be implemented based on mining transport and the need for transport and travel needs of other industries. Future after 15 years The mining industry of the northern region will be in a lively development phase and will have great economic significance. In transport functions, the current transport network will have been used as basis. Fast changes of the transport network will not be possible. The development of new national transport connections may take years longer than starting mining activities. New ore deposits are constantly being found, and the utilisation of them is dependent on the transport possibilities. In this work it could be stated that mining industry and its transport needs are difficult to predict far into the future. For this reason, there should be continuous co-operation between mines and mining transport both nationally and internationally

22 Future needs will be forecast in collaboration with the neighbouring northern countries The development of the Tornio Haaparanta railway yard and freight terminal, as well as the development of the Narvik route will be investigated together with Swedish authorities Increasing the possibilities to use the Vartius route in Finnish mining and Russian transit transport will be studied in co-operation with Russian authorities The planning and implementation will take into account the changing traffic needs and possibilities, including the North-East Passage Hauling equipment will be developed and the opportunities they offer will be use The results of this work will be used in the mining working group project Sustainable extractive industry - Energy, logistics and transport infrastructure led by the Ministry of Employment and the Economy. Furthermore, the transport and logistics working group of Northern Finland will do follow-up as part of the working group activities. The situation will be re-evaluated in (Source: Regional Council of Lapland. The Finnish Transport Agency) Education and Research University of Lapland was founded on 1st of March in 1979 and it is located in Rovaniemi. University has four faculties: Art and Design, Education, Law and Social Sciences. Other Units of the University are: Arctic Centre, Education and Development Services, Open University, Central Administration. Lapland University Consortium shared units are: Multidimensional Tourism Institute, Institute for Northern Culture, Library, Support Service Centre (R&D Support Services, IT Services, Educational Support Services). University of Lapland has students and 647 staff members. The mission of the University of Lapland is to promote sustainable development, well-being and equality both regionally and internationally through its research, artistic activity and research-led teaching. The core values of the University are: creative and impactful involvement, critical and emancipatory perspectives, individual and community commitment. In 2020 the University of Lapland will be an international actor in higher education with a distinctive profile in the arts and the sciences. The University is an autonomous member of the Lapland University Consortium and contributes in its areas of strength to delivering the Consortium s jointly agreed strategy. In international cooperation, the University s key strategic partner will be the University of the Arctic, whose thematic networks will strengthen the expertise of the University in its focus areas. The University of Lapland is the northernmost university in the European Union. The institution s profile encompasses internationally recognised research on the people, communities and environment of the Arctic and the North, and the interaction of these elements. Another cornerstone of the University s work is international tourism research, a focus valued for its potential regional impact. The University s strategic focuses are: service design, Northern wellbeing and the changing nature of work, sustainable development, law, and justice.these focus areas correspond to the strategic focuses of the Lapland University Consortium. The changes occurring in the Arctic and the North, and the special social, cultural, and economic conditions in these regions, offer a unique environment for research in the focus areas. Service design draws on the opportunities arising from the interaction between art and science in research and development in the areas of tourism, industrial products, electronic services, well-being services, and safe and accessible environments

23 As an expert in service design, the University creates conditions conducive to producing competitive and sustainable services for the public and private sectors, as well as educational institutions. At the same time, it educates experts with the holistic perspective required for successfully managing the creative context of service design. In the regional innovation programme of the Lapland University Consortium (LUC), service design is strongly linked to the Consortium s strategic focus on creating a Lapland of tourism, culture, and experiences. Global-level social, economic, and political changes and patterns of migration developments attributable in part to climate change are felt more acutely in Arctic and Northern regions, where they impact the wellbeing of the people there and the foundation on which that well-being rests. To address these developments, the University is building up a strong multidisciplinary research effort on change, one thrust of which is to educate experts on the changing nature of work. Special attention is paid to factors endemic in Northern regions that promote or reduce well-being. By investing in the research theme The changing nature of work the University strengthens its educational offerings geared to specific professions. One prominent research theme at the University is the social well-being and changing livelihoods of indigenous peoples. The institution bears a national responsibility for social-scientific research related to the Sámi people. In the regional innovation programme of the Lapland University Consortium (LUC), Northern well-being and the changing nature of work form a research interest that closely serves the Consortium s strategic focus on creating a Lapland of well-being. Sustainable development, law, and justice comprise an area of multidisciplinary research. Analyses in this field focus on the interests of varied actors in relation to the conditions and regulations that apply in the environment in which they must work. The research undertaken aims to generate information on future options for the Arctic and North that incorporate sustainable social, economic, ecological, judicial, and cultural development. Of particular interest are themes related to sustainable tourism and indigenous peoples. The University bears a national responsibility for research on Sámi law. In the innovation programme of the Lapland University Consortium (LUC), sustainable development, law, and justice are closely linked to the Consortium s strategic focus on creating a Lapland of industry and a Lapland of natural resources. The research problems addressed in the University s research focuses are primarily related to Arctic and Northern research as well as tourism research. In 2020 the University of Lapland will be an internationally attractive, creative, and multicultural academic and artistic community. The University s research and artistic activity in its stated strengths and focus areas will be recognised and influential at the regional, national, and international levels. The University will continue to strengthen its Arctic and Northern research orientation. It will conduct high-calibre Arctic and Northern research through cooperation between the Arctic Centre and the faculties. The quality and impact of the research will be internationally assessed in 2013 and

24 The Multidimensional Tourism Institute will be a significant player in its field internationally, and its research will have a strong impact on the region. The scientific research conducted at the Institute will represent cutting-edge research internationally in the field of ecologically and socially sustainable tourism. The University will direct its research efforts to its focus areas: service design; Northern well-being and the changing nature of work; and sustainable development, law, and justice. The University will engage in scientific basic research and practice-oriented research side by side. Applied research attuned to the interests of the region will be conducted in cooperation with the Lapland University Consortium and will contribute to and draw on the University s programme of basic research. International networking will figure prominently in the research and artistic activity at the University. International research funding will constitute twenty-five per cent of the University s outside funding. The unique strength of the University will lie in the interaction between its research and artistic activity. (Source: University of Lapland) Arctic Centre The Arctic Centre is internationally recognized for the quality and relevance of its multidisciplinary Arctic research, which is our key activity. Through this research, the Arctic Centre promotes increased knowledge, awareness and understanding of the Arctic both within and outside the region. This research supports decision-making and sustainable development in the Arctic. Research projects: on-going and completed projects. Global Change: The Arctic is particularly vulnerable to large-scale changes in the climate and economy occurring throughout the globe. This research group examines the effects of these changes and efforts to offset and adapt to them. Sustainable Development studies how people, communities and institutions in the Arctic manage and cope with changing environmental, economic, social and cultural circumstances in order to promote a sustainable future. Environmental and Minority Law: The Northern Institute for Environmental and Minority Law (NIEM) has expertise in legal research in the Arctic and is specialized in the two branches of law that appear in its name - environmental law and human rights law. The Arctic Centre has an International Scientific Advisory Board which meets once a year and has an advisory and supervisory role. Chair of the Board is Professor David Hik from the University of Alberta. The Arctic Doctoral Programme Arktis is a multidisciplinary doctoral programme of the Academy of Finland. The one-year Arctic Studies program gives introduction to the issues that are relevant in the Circumpolar North. The Arctic Centre s science communications and library compiles, popularizes and communicates Arctic issues to increase the knowledge and understanding of the experts, decision makers and the general public on Arctic issues. The Science Centre is in the Arktikum House together with the Provincial Museum of Lapland. Nearly persons visit the Arktikum House every year, half of them tourists from abroad. Science Centre exhibitions display the results of Arctic research interactively and inform about the Arctic nature and people of the region. Arctic Centre representatives serve as specialists in many international and national tasks. We have also very wide and active network of contacts around the world

25 The Science Communications compiles, popularizes and communicates information on arctic issues to national and international experts, different target groups and the general public. Our goal is to increase the knowledge and understanding on arctic issues of the experts, decision makers and the general public by offering net services, theme portals and library services by utilizing the expertise of the staff and partners. The Science Communications develops and maintains databases and portals on arctic research, northern environments and the Barents region. We have active cooperation with national and international partners. Arctic Expertise in Finland publication was compiled by the Science Communications for the Ministry for Foreign Affairs of Finland. The Library at the Arktikum serves tourists, researchers, students and local people. It has a collection of literature dealing with natural phenomena, environment, expeditions, peoples, cultures, and livelihoods in the Northern regions, especially the Arctic. The collection also includes information on legislation and research related to these subjects. The Science Communications has collaborated with organizations in other nations to develop a northern information services. The BarentsInfo.org portal was done together with Norwegian, Russian and Swedish parters. The newest cooperation project is the Barents Mediasphere where the aim is to improve the cross-border communications in the Barents region. The University of the Arctic is a cooperative network with 90 universities, colleges, and other organizations committed to higher education and research in the North. The activities of the UArctic include e.g. the multidisciplinary Circumpolar Studies Program (BCS), north2north Mobility Program which is a mobility program for students, and Northern Research Forum that was started to activate dialogue between students, scientists and policy-makers. European Union Arctic Information Centre initiative is the international network of 19 leading Arctic research and outreach institutions from the various European Union Members States, and the EEA countries. The EUAIC initiative was made during years as the most experienced professional network of European institutions for information, outreach and insight into Arctic issues. The network s objective is to provide the European Union, its citizens, institutions, companies and Member States with an Arctic information source and factual overview about the status and trends in the Arctic. The EUAIC initiative network aims to act as a boundary organization of information that facilitates two-way communication between experts, decision makers, stakeholders and the public. The initiative is organized using a network model to operate on the basis of existing expertise and infrastructures of its network members. The network initiative has its headquarters located at the Arctic Centre (Rovaniemi, Finland), currently there are nineteen partners in the network. The European Commission selected the consortium to carry out an one million euro project to produce a Strategic Environmental Impact Assessment of development of the Arctic. The project will last eighteen months during The initiative follows the Arctic statements of the European Union (Commission 2008 and the Council 2009) that have high importance for sustainable development of the Arctic regions. (Source: Arctic Centre) The Arctic Centre actively participates in developing the operational content of the University of the Arctic and in its mobility programs. The Arctic Studies Program (ASP) delivers U Arctic s Circumpolar Studies

26 3.1.1 Lapland investment potential Industry Outokumpu Oyj, Tornio, postponed investments 400 m MangaLNG Oy, Tornio, LNG-terminal, first phase 100 m MangaLNG Oy, Tornio, LNG-terminal, second phase 300 m Stora Enso Oyj, Veitsiluoto, recovery boiler 75 m Bio refinery, Kemijärvi 800 m Total: m Mining industry Agnico Eagle Finland Oy, Kittilä gold mine expansion, first phase 100 m Agnico Eagle Finland Oy, Kittilä gold mine expansion, second phase 200 m First Quantum Minerals, Kevitsa mine expansion 300 m Yara Suomi Oy, Sokli mine m Gold Fields Arctic Platinum, Suhanko mine m Anglo American /AA Sakatti Oy, Sakatti nickel mine and smelter m Mawson Resources, Rompas gold mine 400 m Hannukainen iron mine project 600 m Total: m Hydro power Kemijoki Oy, Sierilä power plant 135 m Kemijoki river salmon ladder projects 30 m Kemihaara project 140 m Total: 305 m Wind power Impax Asset Management, Kuolavaara-Keulakkopää 110 m Impax Asset Management, Joukhaisselkä 55 m Tuuliwatti Oy, Löylyvaara 15 m Tuuliwatti Oy, Kitkiäisvaara 50 m Tuuliwatti Oy, new projects, Simo/Tervola 210 m Tuulikolmio Oy, Rajakangas 100 m Tuulikolmio Oy, Pakisvaara 190 m Taaleritehdas Oy, Posio 180 m Innopower Oy, Ajos 390 m Rajakiiri Oy, Tornio 270 m Wpd Finland Oy, Kemijärvi 55 m Wpd Finland Oy, Salla 100 m Wpd Finland Oy, Palovaara-Ahkiovaara 150 m Posion Energia, Aneenkumpu 40 m UPM Kymmene Oyj, Reväsvaara 90 m Total: m Bio energy Rovaniemen Energia Oy, Mustikkamaa bio power plant 220 m Energy transfer networks Fingrid Oyj, Sokli and Hannukainen lines 270 m Trade Rovaniemi South Center 50 m Kemi-Tornio region projects 50 m Total: 100 m 50 51

27 Tourism Laatumaa /Lapland Hotels Oy, Ylläs, new resort 600 m Saariselkä resort expansion 450 m Levi Summit, center and hotel expansion 200 m Hotel Santa Claus, Rovaniemi, expansion 30 m City Hotel, Rovaniemi, expansion 10 m Lapland Hotels Oy, Pallas, hotel expansion 20 m YIT, Kemi Sarius hotel project 120 m Rinimex Oy /Noitatunturi project start, Pyhätunturi 500 m Santa Park, hotel and tourism resort, Rovaniemi 30 m Sallatunturi slalom slope project 10 m Suomu ski flying hill and infrastructure, Kemijärvi 30 m Aavasaksa ski flying and jumping climate hall, Ylitornio 60 m Total: m Transport infrastructure VT 4, Rovaniemi highway project 25 m VT 4, Kemi-Pohjois-Ii highway 91 m Sokli mining roads 140 m Suhanko mining road 20 m VT 4, Rovaniemi south to Loue highway 90 m VT 4, Rovaniemi-Sodankylä highway 160 m Laurila-Tornio, railway reconstruction and electrification 30 m Tornio-Kolari, railway reconstruction 255 m Rovaniemi-Sodankylä railway 325 m Arctic Railway, Finnish side m Kolari-Pajala- railway, Narvik connection 120 m Kolari-Kilpisjärvi road reconstruction 160 m Palojoensuu-Hetta-Kivilompolo road reconstruction 40 m Sevetti road reconstruction 100 m Finavia Oy, Lapland airport investments 25 m Total: m Public investments Lapland Central Hospital expansion 100 m Lapland total: m Development of the region The fastest growing sector in Lapland has been the mining industry. The preconditions for the development of the mining industry in the region are sustainable solutions to environmental issues and a conflict-free existence alongside the tourism industry. After the Kevitsa Mine came in to production and the expansion of the Kemi Mine of Outokumpu was completed the start of new investments seemed to be very difficult to define. Mineral raw material prices have been coming down and stayed on low level already for some years. There was a long wait for the decision concerning the expansion of the Kittilä Gold Mine, but the realisation of its initial stage was announced in February 2012 and the expansion is still under construction. Kevitsa mine started expansion project in summer 2014 after almost three years waiting for environmental permits. The decision on the Sokli mine is still not done. Yara Suomi Oy announced that finally decision should be ready before summer Disagreement with Finnish Government regarding the transport of phosphate ore has been the main reason for the prolonged decision process. Finally, in the end of 2014, Yara and the Government made an agreement to plan the transport of mining products by road transport. This is now finally speeding up the process. According to the Ministry of Transport and Communication, roads between Sokli and Kemijärvi are reconstructed and loading terminal is going to be built to Rovaniemi-Kemijärvi railway. Total cost of this investment is 140 million and Government of Finland is financing it totally

28 Hannukainen Mine project in Kolari is delayed due to economical problems and finally, the bankruptcy of Northland Resources mining company. Iron ore price is at the moment exceptionally low and it seems to be evitable that Hannukainen project is postponed with at least ten years. Discussion about the conflict between tourism and mining was arisen in Ylläs resort. The opposition became stronger and voices louder against the mining project. Now this discussion is going to fall silent during the following years. The problems of Talvivaara mine have reflected to the mine permitting processes in Lapland. At the moment the situation seems still to be almost critical with two projects and this is due to authorities like ELY Centre and Metsähallitus, which are continuously appealing about the decisions made by TUKES to give exploration permits to Anglo American in Sakatti and Mawson Resources in Rompas area. This is strange because both authorities have been involved with the decision making process itself and after legal decision they appeal. Geological Survey of Finland is in the same situation in the Enontekiö with exploration permits. Business Community has discussed about this problem with the Prime Minister who promised to take measures to solve the situation. Mawson Resources has already been in court of justice accused of damaging vulnerable terrain in nature protection areas. This process is continuing probably many years in higher courts. Fraser Institute has ranked Finland as number one in several annual surveys of mining companies. Now this position is threatened because of stronger bureaucracy in permitting. Mining industry is not the only branch of business suffering of this. According to the Confederation of Finnish Industries (EK) investments with total value of 3.8 billion are not implemented due to too long permitting and licensing processes. Government of Finland has noticed this and nominated a special commission to renew processes and shorten duration of permitting. If this problem is not solved by the next government after the parliament election in April 2015, the competitiveness of Finland is continuing to decrease especially in mining. The next in line seems to be the decision to implement the Suhanko palladium mine in Ranua. Gold Fields Arctic Platinum company announced already in 2013 that they are seeking financing to this 1.5 billion project. Continuing financial crisis was not making this process easier. Political crisis might change this situation. Norilsk Nickel is world leader in platinum production. If crisis escalates sanctions or counter sanctions, this could even speed up Suhanko project. Some movement has already been noticeable. As Outokumpu completed its new ferrochrome plant at its Tornio Mill, Lapland can probably expect more industrial investments. The company still holds a reserve of approximately 400 million euros of investments, which were announced before the financial crisis that hit in The expansion of the Kemi Mine and the construction of the second ferrochrome plant included in the investment plan are now to be implemented. These are expected to be initiated once the merger of Outokumpu and Inoxum is now finalised. In fact, with the potential new smelting plant, 54 55

29 the investments in Tornio can rise in excess of a billion euros. Last year, Outokumpu and its partners also announced plans to construct the LNG terminal in connection with the Tornio Factory. Outokumpu plc., Ruukki Metals ltd, Gasum ltd and EPV Energy ltd have established a development company called Manga LNG ltd. The purpose of Manga LNG ltd is to build an import terminal for liquefied natural gas (LNG) and to create an effective logistics chain to supply the LNG. The LNG terminal diversifies Finnish gas markets, since Finland does not have LNG import terminal at the moment. Swedish LKAB ltd (Luossavaara Kiirunavaara Ltd) has been offered the possibility to become a shareholder later this year. The use of LNG will improve the competitiveness of the participating companies, since the price of LNG has during the recent years been more stable and price development more moderate than prices of the fuels to be replaced with LNG. LNG is also more environmental friendly than fossil fuels used currently in industry, maritime transport and energy production. LNG reduces carbon dioxide, nitrogen oxide and particulates emissions considerably. Manga LNG has signed a turnkey engineering, procurement and construction (EPC) contract to purchase a liquefied natural gas (LNG) receiving terminal to be built in Tornio, Northern Finland. The contract, valued at approximately EUR 100 million, has been made with Wärtsilä Corporation, a global leader in complete lifecycle power solutions for the marine and energy markets. The contract is conditional on receipt of investment support and Manga LNG Oy s contracts with other parties, including the gas suppliers. Tornio Manga LNG started co-operation with Gasum Ltd on LNG procurement and logistics in April The co-operation will continue in joint development company. The co-operation is aiming on substantial cost savings and to improve LNG security of supply for Pansio and Tornio terminals. For LNG shipments a joint venture is planned with a shipping company specializing on LNG. The size of the vessel will be from m 3. Manga LNG Oy s subsidiary Manga Terminal Oy made in December 2014 the decision to invest in the new liquefied natural gas import terminal. An efficient surrounding logistics chain will be created around the terminal. The terminal is planned to be ready for operations early The construction phase of the import terminal has been estimated to employ 260 man years. Upon completion, the terminal will provide directly 7 new positions locally and indirectly 30 new openings with the subcontractors. Manga LNG Oy has received from the Finnish Ministry of Employment and the Economy, an LNG-terminal investment aid of 33,2 million euros for building the terminal. The investments into tourism in Lapland were around a billion euros over the last decade, with most investments focused on the western Lapland, Levi and Ylläs districts. It was believed that the investment boom was over, but a positive boost in tourism following the financial crisis has turned things around. The investments will rise to another billion within next ten years if the projects are implemented. The biggest projects include the new centre for Äkäslompolo, the Saariselkä investment project and the Koutalaki expansion in Levi. Tourism in Lapland seems to be a continuing success story in spite of all political crisis. Amount of Russian tourists has strongly been decreasing in Finland due to the collapse of Russian rouble. This process has had a big impact in Helsinki and Southern Finland. Increasing flow of tourists from other countries has made the impact small in Lapland. Especially British and Asian travellers have increased travelling to Lapland even in spite of the chronic lack of necessary flight connections

30 Wind power seems to be only energy projects to be started within the next five years. Process is slower than expected due to many appeals regarding the wind parks. Hydro power project in Sierilä is slowly awakening. Appealing processes have been long and appealing court decided to restart the application process. Finally court decided to accept the project in February Now the building decision can be done even before Arctic Railway has been the most popular investment plan in Lapland. This railway has three main options, one in west, one in north and one in east. Eastern Lapland announced that Russia is now interested in building railway between Salla and Alakurtti. This would be according to them the cheapest alternative. Ukraine crisis has rapidly changed this situation. Russian military troops are returning to Alakurtti. In spite of smaller radio intelligence unit a modern and strong motorized brigade has already arrived to this old base only 65 km from Finnish border. Opening of new railroad seems to be postponed to distant future. City of Oulu has been active in Tromsö and announced that the only way to solve this problem is to build the railway from Kolari to Skibotn and from there to Tromsö. City of Oulu needs this connection, but this project from Kolari to Tromsö need financing 6-8 billion euro due to very difficult mountain terrain on the Norwegian side. The Government of Finland has been silent and the Ministry of Transport and Communication and the minister have so far not been willing to discuss about the project. Finnish Transport Agency has started cooperation with Norwegian authorities regarding road construction in the northern part of Lapland. Norway is interested in cooperation regarding roads from Muonio to Kilpisjärvi leading to Tromsö, from Palojoensuu to Hetta and Kivilompolo leading to Alta and Hammerfest and the famous Sevetti road leading to Kirkenes. Truck transport through Lapland to Northern Norway has been rapidly increasing creating during winter time dangerous situations and accidents on the Lapland roads. Lapland has survived quite well during the ongoing recession in Finland which started in the end of Almost all branches of business have been reaching the results of Only building and construction is still suffering of delayed investments. Tourism recovered within a couple of years after the big recession year Mining investment projects have been postponed, but two ongoing mine expansions in Kittilä gold mine and Kevitsa copper-nickel mine have revived business community. Also strong investment projects of neighboring Norrbotten have created opportunities and new openings for business. According to the latest statistics Lapland is fourth or fifth biggest export region in Finland. Export of Lapland was in 2012 totally 3.7 billion euro, which was 6.4% of the export of Finland. In recession year 2013 export from Lapland was still 3.5 billion euro. Export statistics of Finland don t show the real situation in the country. A big part of products made in regions is placed to head offices in Helsinki Region. This creates a false reality about Helsinki as a leading export region in Finland with more than 40% of all exports. This might be also one reason for big mistakes in Finnish industrial policy in the new millenium. Ukraine crisis is visible in Lapland. Border crossings from Murmansk region have decreased last year with about 15% and this trend seems to be continuing also this year. Biggest impact has been seen in shopping centers, but total amount of border crossings is still over annually. This is three times more than ten years ago. The resurrection of Alakurtti base about 65 km from Finnish border was expected due to the new Arctic Strategy of Russian Federation. So far no signs of growing tension between neighbors has been seen. Alakurtti without military presence has on the contrary been exception in last 70 years. A major problem in defining the economical cooperation between Finland and Murmansk Region have been unclear statistics by Finnish Customs

31 According to the Russian Federation Customs export from Finland to Murmansk Region has been powerfully increasing in the end of the first decade of new millenium. From 2009 to 2013 total value of Finnish export was more than 1.1 billion. Record year was 2013 with almost 300 million export which is about 10% of Finnish export to St.Petersburg. This is very interesting, because about 750 Finnish companies are registered in St. Petersburg and only one in Murmansk. Finland is not very effective in exports to the metropoles of Russia. Main reason to increasing export to Murmansk region seems to be mining technology. Norilsk Nickel has opened a new terminal in the commercial sea port of Murmansk. Company is buying technology, spare parts and other equipments from Finland and they are first transported by trucks through Finland to Salla and then to Murmansk where they are lasted on Arctic Express- class ships and shipped to Dudinka and from there to Norilsk. Also the mining industry of Murmansk Region has been investing in Finnish mining technology. Kovdorskiy GOK, Olenogorskiy GOK and JSC Apatity have been upgrading their technology. Also a new mine of Rutshij Oleni in Kirovsk has been opened in This demand of Finnish mining technology seems to be continuing. Hopefully the political crisis is ending or at least decreasing so this important economic cooperation between Finland and Murmansk Region through Lapland is able to continue and grow. One of the most typical problems with junior mining companies in investment projects has been the underestimation of the real costs to build a mine. Yara company is big enough to be able to finance the project and also finish the started implementation. Mining industry and technology have been changing business community in Lapland. It seems to be clear that investment projects both in Lapland and neighbour regions have developed several centers for companies which sell services to projects and mines and are doing all kinds of maintenance. This process has been seen in three latest inquiries to Southern Finland companies by Lapland Chamber of Commerce. In all three inquiries more than 60 Finnish companies are planning to open a branch office in Lapland. In 2015 the number was the highest of all time, even 97 companies from South Finland are planning to establish a unit to Lapland. Kemi-Tornio region has a long time been a center for maintenance companies. This year 27 companies are planning to open office in the region. The biggest surprise is that Rovaniemi was this year almost as popular location for companies as Northern Norway or Sweden. Total of 33 companies are planning to be placed to Rovaniemi. Also Sodankylä-Kittilä region and North Lapland were more popular than ever. This is already a national megatrend that should be noticed in Helsinki by Finnish Government and other authorities. Positive decision by Yara Suomi Oy to start the Sokli project would be very important both for Lapland and for the whole mining industry in Finland. After Talvivaara problems began mining industry has been in big need for positive investment decisions. Discussion about mining industry has been vivid in Finland, but mostly about problems. The connection between high class mining technology industry in Finland and the mines has not been largely noticed

32 Most important factor in the future development of Lapland is the parliament election of Finland in April 2015 and the new Government which is to be built up after the election. Finland has been in continuing economic and political crisis from the end of 2008 to the present day. Government built up after the 2011 parliamentary election has made serious mistakes in deciding about the program of the government. Program paper had 89 pages and was very detailed. Green party together with environmental activists took over the main decisions made by the government. Biggest problem was the strong increasing of environmental taxation for the business community. Prime minister and most of the ministers believed that the long expected upswing of Finnish economics is repairing this weakening in competitiveness of Finnish export companies. But the upswing never came. In spite of that Finnish export started to dive. The exit of Nokia mobile phones from the country made this dive even more serious and deeper. Export balance turned negative for the first time after the big recession in the 1990 s. New Government must make the upswing of economy to happen. Increasing national debt is worsening the situation. At present day the debt is 95 billion and the 100 billion limit is approaching with high speed. Competitiveness of Finnish companies must be restored. Export has to be led to positive growth. The actions of European Central Bank are slightly helping Finland. Euro has been in practice devalued by some % during last months. Growth of inflation is one of the main goals of ECB. That helps also Finland, but on the other hand euro countries have a major problem in solving the economic and also political crisis created by Greece. Main investment projects that start before 2020 Manga LNG-terminal in Tornio, first phase 100 m Sokli Mine by Yara Finland Oy 1000 m Kittilä gold mine expansion second phase 200 m Sierilä hydro power plant by Kemijoki Oy 135 m Wind power parks, Sodankylä, Simo, Tervola, etc. 525 m Tourism investments in Rovaniemi, Pallas and Salla 100 m Sokli mine roads 140 m VT 4 Rovaniemi road 25 m VT 4 Kemi-Pohjois Ii-road 91 m Railway electrification Laurila-Tornio 10 m Rovaniemi South Center shopping 50 m Total: m Runner ups - projects that can start if growth is stronger than expected Wind parks in Central Lapland 520 m Levi Summit expansion 200 m Saariselkä expansion 450 m Rovaniemi-Sodankylä railway 325 m Outokumpu Oyj Tornio postponed investments 400 m Total: m All total: m Lapland is becoming more and more important part of Finnish economy. So the national development is defining the speed of the expected upswing and also the start of several investment projects. It seems to be inevitable that national growth is very slow and in the beginning very thin. This all postpones investments and political crisis has its impact on that too

33 3.2 NORTH OF FINLAND - OULU REGION Text by Business Oulu The Oulu region is the metropolitan area of Northern Finland and the largest urban centre in the northernmost regions of Scandinavia. Airport Harbour Railway ARCTIC SEA The Finnish region of Oulu (in this article Oulu region refers to Northern Ostrobothnia ) extends across Finland from the Gulf of Bothnia coast to the Russian border and has an area of km² and is about equal in size to the whole of Netherlands. Oulu region is a growing and developing region that has a population of about people (7,2% of the Finnish population) and 80% of whom live in urban areas (2008). The population is well educated and Oulu has the youngest population in Europe (median age 34,6). The total population of the Northern Ostrobothnia is Five surrounding municipalities have joined Oulu from the beginning of year 2013 and the population of the city is now about norway sweden FINLAND russia The Oulu Province belongs to a sub-arctic climate. The City of Oulu has a moderate climate due to its maritime location. At latitude of Oulu the average monthly temperatures range from -11 C in January to 16 C in July. The mean temperature in January is -16 C in the northeast of the area. Oulu is ideally situated in the junction of the main roads and railways of Northern Finland. Oulu Airport is the second largest airport (1 million travelers) in Finland, and the Port of Oulu is the largest port for unitized cargo transport in the Bay of Bothnia. Business in Oulu Region The Oulu region is an internationally recognized centre of technology and expertise where conscious efforts have been made to develop ideal ecosystems for new technology and practical cooperation between training, research and private enterprises. Oulu has a total of about high tech jobs. In addition to the information and communication technology (especially radio technology) the Oulu region is also well known for its cleantech and medical technology

34 The few more densely populated centres in the area have significant industrial facilities specialized in forest, steel, chemical, construction and food industries. Oulu is surrounded by some major Northern European investments (more than 100 billion). As the biggest city and the most significant logistics hub in Northern Scandinavia, Oulu provides an excellent location for the companies working for major projects. City of Oulu has been ranked twice among the TOP 7 finalists of the smartest community in the world survey (ICF 2012, 2013). Oulu was also rated as one of the best innovation and technology cities (FORTUNE and CNBC 2012) and one the most promising start-up entrepreneurship cities (CNN 2012). BusinessOulu and OIA BusinessOulu is a business development organization of the City of Oulu. The main mission is to be a driver of business transition and a partner in business growth by supporting enterprises and strengthening their competitiveness in global markets. Together with its partners, BusinessOulu offers comprehensive services to companies operating in ICT, Cleantech, Industry, Life science, Trade & service, Travel & Logistics and Creative Industry sectors. Internationalization and invest in services BusinessOulu offers a number of services for the companies planning to go international and companies willing to invest in Oulu or relocate themselves in Oulu. BusinessOulu helps companies in the different stages of internationalization: in compiling internationalization plans, planning and securing funding, and utilizing international networks in finding new business opportunities. BusinessOulu has extensive international networks and cooperation partners both globally and in the nearby markets: Sweden, Norway, Turkey, USA, Canada, Germany, Russia, Kazakhstan and Japan, to name a few. In total, Oulu has a cooperation relationship with 16 partner cities on four continents. One important part of BusinessOulu operation is the activities that take place in the target countries. The City of Oulu and several companies and research institutions have been working closely together with the biggest city in Silicon Valley, San Jose, since the beginning of 21st century. For several years now, Oulu and the Cities of Sendai and Fujisawa in Japan have worked closely together. The newest opening in Japan is the cooperation agreement between Oulu and the area of Kanagawa. A very important part of internationalization for Oulu is the nearby cooperation area of the Nordic Countries and Russia. In the nearby northern regions, Oulu s network includes Boden, Luleå and Umeå in Sweden, Alta in Norway and Arkhangelsk and Petrozavodsk in Russia. BusinessOulu aims also to boost collaboration between the companies in Finland, Norway and Sweden by opening Suomi-talo-concept in Tromsø and Gällivare. Among others, significant targets are: Mining and construction projects in Northern Sweden Energy and construction projects in Northern Norway and North-west Russia Energy, construction and mining projects in Northern Finland and the improvement of their prerequisites The logistics corridors of Barents Region: railway, road and shipping routes and flight connections 66 67

35 In the near future, significant investments concerning energy, construction and mining, for example, are expected to take place in Northern Finland and the Barents area. The Company networks enabling internationalization project aims to support the companies in order to improve their opportunities of gaining access to major national and international projects. Oulu Innovation Alliance (OIA) is a unique collaboration, which integrates top know-how of printed intelligence, wellbeing technology, wireless technology, Cleantech and 3D internet. It connects research institutions, businesses and public sector organizations. OIA generates cutting-edge global business from research, development and innovation projects and ventures. ICT Oulu ecosystem has established itself as the hot bed of wireless technologies. The pool of skilled workforce trained by world class companies and educated by the local universities has attracted many companies to invest and build their business on the roots of wireless industries. Area offers an opportunity to be a part of the development of future technologies. Oulu - the Capital of Northern Scandinavia - has the basis of 30 years of technological success stories. The Oulu ecosystem covers the creation of wireless products and systems, from the design phase right up to production. Processes are carried out in a uniquely rapid and productive fashion. Global ICT players are making strategic investments in Oulu. Today, Oulu is an even stronger R&D community of several global companies. Oulu is the best place in the world for developing hi-tech-based products from an idea to a complete product for the global market and for companies and consumer-clients to use. A significant number of international corporations relocated to Oulu during the second half of This surely must be a record in the Finnish industrial history that such a major contribution was made to the field of development in hi-tech in such a short period of time. Eleven of these corporations are in ICT sector and almost the same number in other fields. Over the past couple of years the ICT ecosystem in Oulu has diversified considerably. Earlier it depended on two drivers, the mobile phone and mobile network knowledge and knowhow. Today it is complemented by clusters producing finance, health tech and automotive solutions. One example of the advanced local ecosystems is the decision to be one of the first constructors of 5G test networks in Oulu. VTT will open the network for all enterprises and Oulu University shall set up a public 5G network for researchers, companies and students. Future products and service innovations can be developed in an open test environment. High-tech ICT leverage from long-term asset, HILLA-program, focuses on doubling Oulu s 2 billion hi-tech exports. As Finland s fastest growing city, Oulu is an international city full of opportunities. At the moment there are major business and development projects in the Oulu region and the confidence in Oulu s growth is stronger than ever. Basic industry The growth engine behind the basic industry in Oulu is the large investments in Northern Finland and nearby regions. The most significant investments are intended for energy production, construction and the mining industry. Traditionally strong industry fields in Oulu region are the forest, metal, chemistry, wood products and food industries. Large integrated pulp and paper mill operates in Oulu. Raahe and Tornio have two large steel plants. Furthermore, the region is a leading production area for log houses and prefabricated homes. The extensive network of education and services and the great logistic connections support the industrial sector s growth. A significant share of industrial production in Oulu is exported. The varied technological competence and the educational institutions in the area offer opportunities for creating the new solutions of the future

36 Key figures of the basic industry in Oulu: over 550 sites turnover of over EUR 1.7 billion nearly 5,300 employees Cleantech Environmental technology, i.e. Cleantech is one of the most rapidly growing industries on a global scale. Behind the fast growth in cleantech sector are factors such as decreasing natural resources, shortage of water, climate change, as well as legislation and international agreements. Oulu has selected cleantech as one of the most important focus areas. There are large investment plans in Cleantech such as renewable energy production in Northern Europe. Cleantech products from Oulu are used and well known all over the world and its success is supported by the area s strong ICT expertise. The strongest Cleantech competences in Oulu: Renewable energy and smart energy solutions Resource efficiency Emission control In addition to companies, the University of Oulu and the Oulu University of Applied Sciences also invest heavily in R&D work in the Cleantech. Major investments in the Oulu region Oulu region is expecting around 30 billion euros of investments within the next ten years. The biggest current investment is the nuclear power plant project in Pyhäjoki. In addition major investments are planned for wind power, bioenergy and other renewable energy plants, construction and mining. Fennovoima s Nuclear power plant investment 6,5 billion euros Finland has four nuclear power plants. Fennovoima is a Finnish nuclear power company established in The Hanhikivi area of Pyhäjoki was selected as the location of the new nuclear power plant in the autumn of Another important milestone was the delivery contract signed by Fennovoima and Rusatom Overseas, a subsidiary of the Russian company Rosatom, on December 21, According to the schedule agreed with Rusatom Overseas, the plant will produce electricity in The massive project includes a considerable number of subprojects, the schedule of which will be specified as the project progresses. Designing and building a nuclear power plant takes years, and the service life of such a facility is at least 60 years. The economic impacts of Fennovoima s nuclear power plant project are felt throughout Finland. The project will vitalize its home municipality and the surrounding operating environment, including Oulu. As the construction proceeds, a significant amount of foreign labor is expected to arrive in the region. According to Fennovoima s current estimate, the number of workers on site at the same time will be between 3,000 and 4,000. In the operating phase, the plant s employees will number between 400 and 450. The nuclear power plant investment will also bring extensive indirect effects: the project will employ the service sector and transport businesses. The project will have permanent effects on the structure of trade and industry, as well as the regional economy. In addition to this, nuclear power has an important role in energy production. Oulu has an essential role in the project as the largest city in Northern Finland. It is also possible that operators related to the project will open offices in Oulu

37 Other major investments projects in Oulu region Investment boom creates remarkable business opportunities for companies in many different fields. Oulu region is the most important wind power production area in Finland. Expansive wind power parks worth over a billion euros have been planned for the coastal region of Northern Ostrobothnia, close to Oulu. Despite the declining trend in mining investment, there is still big investment plans in Northern Finland in mining sector. Sotkamo Silver s main development project is the Silver Mine project in the municipality of Sotkamo. The Mustavaara Iron-Vanadium Mine in Taivalkoski is planned to be reopened, with ore concentrated in Raahe. Dragon Mines is doing further research concerning planned gold mines in Kuusamo area. Discussions are certain to continue due to important travel industry in the Kuusamo region. Despite there has been a production stop at the Laiva mine, the overall goal of Nordic Mines is to restart operations in a manner that creates conditions for profitable mining. The updated action plan is based on a geological model and mineral resources and it focuses on an improved mining method and capacity expansion in the processing plant adjacent to the mine. Creative industry The diversity of the creative industries in Oulu ranges from architectural services and the communications sector to design and adventure services. During the last few years online, mobile and SaaS services have started to emerge as new branches. Oulu is also one of the central clusters of the Finnish game industry. Key figures of the creative industries in Oulu: Nearly 1,000 companies Turnover of approximately EUR 200 million Approx. 2,000 employees About 100 new companies annually Life science Life science sector in Oulu consists of around 1,700 companies in the bio, health and welfare industries. The total revenue amounts to around EUR 700 million. In Oulu, there is world class competence in the next generation health technologies and the emerging bioeconomy. Oulu offers a world class ecosystem in Life science sector. Expertise arises from co-operation with research, public operators and private companies. ICT expertise found in the city is utilized in the development of Life science applications e.g. wireless biosensors and medtech devices. Oulu s medical technologies ecosystem is a multifaceted network consisting of the universities, public organizations like the city hospital and the VTT Technical Research Centre, and various health-tech manufacturers and biopharmaceutical companies. Active promotion of this health ecosystem is managed by the organization OuluHealth, which has formed a strong network between the city s key players in Life science and healthrelated sectors. Oulu is now preparing for a technological makeover, spearheaded by Business Oulu and Oulu University Hospital. The goal is to utilize expertise in the bio, health and wellness sectors to create a veritable boom of health and wellness know-how in Oulu. The creative industries offer new opportunities, perspectives and inspiration for other business sectors and the community around them. Some top international events are also organized in Oulu, such as the widelyknown Air Guitar World Championships

38 Located in Kontinkangas, near Oulu city centre, Oulu Health is a competence cluster of companies, professionals and research communities specializing in the fields of information and communications technology, biotechnology, health and wellness. Oulu Health represents a physical meeting place for the entire health ecosystem. The campus already houses more than a hundred organizations, including Oulu University Hospital, Oulu City Hospital, Oulu University Faculty of Medicine, Oulu University of Applied Sciences and a large number of companies. The competence cluster of Kontinkangas currently employs more than 8,000 people. Investments worth several billion euros are being planned for Kontinkangas. Oulu University Hospital alone has decided to invest 500 million euros over the next 20 years. Oulu has, for a couple of years now, been living an innovation boom in the bio, health, wellness and the ICT sectors. A number of promising enterprises have been created. Examples of innovations and products produced by the Life science sector in Oulu include the world s leading brand of heart rate monitors, the world s first production method for recombinant collagen, products for faster development and scaling of biotech production processes, selection of diagnostic tests and real-time online methods for improving food safety at point of production in food processing plants. Trade, Service and Travel The opening of the underground parking hall Kivisydän (Stone Heart) will develop the accessibility of the City Centre of Oulu, speed up the current investments and attract new trade companies to Oulu. The increase in population and purchase power combined with active economic development create a sustainable platform for the development of service and trade in the city. The current investment plans in the city centre are valued at a couple of hundred million euros in the next decade. Oulu is the 5th largest travel destination in Finland and the number of leisure travellers has already reached 60%. The city attracts tourists by the selection of shopping and services as well as its lively display of culture and events. Just a stone s throw away from the city centre is the Nallikari area, which is particularly well known as a summer destination amongst the international visitors. The new city plan enables investments of more than 100 million euros in hotels, holiday village and amusement park in the Nallikari area. Other investments in the travel sector are in Kuusamo, Syöte, Rokua Geopark and Kalajoki. Transport Oulu s location, right in the middle of Northern Europe s developing markets and its active business life, is excellent. Traffic and transport to and from Oulu works effortlessly. The city is the most significant logistics hub in Northern Scandinavia: it is a junction for road, railway, sea and air transport. Oulu Airport is the second busiest in Finland. The recently expanded and completely renewed airport serves over one million passengers annually. The regular domestic and international flights of several airlines connect Oulu with the rest of the world. Direct flight to Helsinki (Finnair, Norwegian) takes only 50 minutes. Arctic Airlink started to operate the route Oulu-Luleå-Tromssa in January Altogether Oulu Airport offers flight daily and over 100 flights per week. Oulu Port is one of the leading ports in the Bothnian Bay and ships visit to Oulu annually. The port has regular connections all over Europe. The annual amount of cargo shipped through Oulu is between 3 and 3.5 million tonnes. The most significant export product is paper, and the main import products are fuel and raw materials for the forest industry. Oulu Port is open all year round, and it is the biggest port in Northern Finland in terms of containers and unit traffic. Port of Oulu includes four separate harbour areas: Vihreäsaari oil and bulk docks, Nuottasaari docks, Oritkari docks and the Toppila docks

39 Railway transport of both goods and passengers between Oulu and everywhere in Finland functions efficiently. The modern Pendolino and Inter- City trains guarantee a pleasant and rapid journey. Oulu is also easy to access by road. In addition, Oulu has a high quality and fully functional terminal for combined goods transport. It is located in the logistics center for road, railway and sea traffic in the Oritkari area. Education and Research Oulu is a research hub with a capital R: the local Technical Research Centre of Finland (VTT) is the largest organization in Northern Europe involved in applied research. Research is also conducted at the university of Oulu, Oulu University of Applied Sciences and numerous research institutions such as Finnish Food Safety Authority Evira, the Finnish Geodetic Institute (FGI), MTT Agrifood Research Finland, the Finnish Forest Research Institute Metla, the Finnish Game and Fisheries Research Institute (FGFRI) and the Finnish Environment Institute SYKE. The educational offering is further complemented by vocational institutions and private education providers. Oulu University The University of Oulu is an international science university which creates innovation for the future, well-being, and knowledge through multidisciplinary research and education. Future innovation is about seeking, utilizing and applying new knowledge. The University of Oulu researches people and culture in a changing living environment, as well as opportunities that new technology provides for improving the well-being of people and the environment. The University of Oulu is a multidisciplinary expert in Northerness. Founded in 1958, the research and education community is students and 3000 employees strong, and one of the biggest and the most multidisciplinary universities in Finland. The ten faculties, the many departments and the specialized research units of the University of Oulu create the foundation for multiscientific research, innovation and training of experts for demanding professional tasks. The University of Oulu conducts scientific basic research in over 70 branches of science. Open-mindedly combining technical sciences, natural sciences and human sciences creates a unique foundation for new multidisciplinary research knowledge, innovation and education. The research areas of strength include four focus areas and four development areas. Focus areas: Biosciences and health Information technology Cultural identity and interaction Environment, natural resources and materials; Development areas Business and economy Steel research Research-based teacher education Mining and mineral field The research organizations of the focus and development areas are typically multidisciplinary, and they encourage researchers to make new scientific initiatives and discoveries. The University of Oulu conducts research in close cooperation with sector research institutions and corporations. Acting in the international scientific network is the foundation of renewal

40 Oulu University of Applied Sciences Oulu University of Applied Sciences has more than 30 programmes, in which theory and practice are in balance. University has an active role in research, both internationally and regionally. Oulu University of Applied Sciences works in close cooperation with regional business life. (Source: BusinessOulu) Oulu Region investment potential Industry Data centers and cloud services, Oulu 500 m Printed intelligence, Oulu 50 m SSAB Raahe, power plant and coal injection technology 208 m Valio/Pohjolan Maito, Oulu, dairy mill expansion 40 m Kotivara Oy, Oulu, food industry expansion 10 m Akzo Nobel Oy, Oulu, chemical industry 20 m Haapajärvi bio refinery m Stora Enso Oyj, Oulu, environment technology 14 m Lappwall Oy, Pyhäntä, expansionf of wood element factory 5 m Flexbright Oy, Oulu, production expansion 5 m Total: m Hydro power Pohjolan Voima Oy, Kollaja project 155 m Pyhäsalmi pump power plant 300 m Total: 455 m Wind power All regional projects m Nuclear power Fennovoima Oy, Pyhäjoki m Bio energy Oulun Energia, new power plant, bio fuel and technology 500 m Sievi biofuel plant 150 m Bio gas plant, recycling and filling, Oulu 10 m Total: 650 m Energy transfer networks Fingrid Oy 100 m Caruna Electricity 50 m Total: 150 m Mining industry Mustavaara mine and smelter Posio/Taivalkoski/Raahe 450 m Daragon Mining Oy, Kuusamo gold mine 120 m Belvedere Mining Oy, Hitura mine, open pit expansion 20 m Belvedere Mining Oy, Kopsa mine, start of gold production 20 m Nordic Mines Oy, Raahe gold mine reopening 15 m Total: 625 m 78 79

41 Trade Osuuskauppa Arina, Valkea shopping center, Oulu 150 m Ritaportti shopping center, Oulu 100 m Kaakkuri shopping center expansion, Oulu 45 m Zatelliitti shopping center, Kempele 375 m Raahen portti shopping center, Raahe 150 m Oulu city shopping centers (CUBE, Pallas, Casterninkulma etc.) 100 m Cor Grou p Oy, Wellbeing centers 100 m Office centers, Hiironen/Peltola, Oulu 50 m Retail park, Oulu 135 m Raksila shopping centers and arena expansion 150 m Ankkurinlahti, Liminka 3 m Total: m Transport infrastructure Seinäjoki-Oulu, railway project, phase m Ylivieska-Kokkola, second railway track 310 m Ylivieska-Iisalmi-Kajaani, railway electrification 90 m VT 4, Oulu-Kuivaniemi highway 116 m VT 22, Oulu-Kajaani highway 50 m VT 8, Pyhäjoki nuclear power plant transport connection 30 m Oulu and Ylivieska railway yards 46 m Oulu deep sea port and expansion 60 m Hailuoto bridge 64 m VT 4, Oulu-Jyväskylä highway 160 m VT 8, Oulu-Vaasa highway 143 m Total: m Tourism Nallikari tourism center expansion, Oulu (hotel, theme parks) 100 m Nallikari expansion second phase, Oulu 35 m Oulu city, Kauppatori Hotel project 80 m Oulu city, other hotel expansions (with Lapland Hotels Oy) 50 m Linnakangas tourism and recreation center, Kempele 30 m Oulu Zone, recreation center 20 m Other recreation and tourism center projects 20 m Total: 335 m Public investments Oulu University hospital 500 m Oulu University dentistry unit 10 m City of Oulu investments, underground parking etc. projects m Laguna project, Pyhäsalmi 600 m Total: m Oulu Region total: m 80 81

42 3.2.2 Development of the region by Timo Rautajoki City of Oulu has been going through big structural changes during last five years. City has been growing rapidly after 2010 especially two years ago when several neighboring municipalities joined Oulu. Today city has almost inhabitants and it is one of the biggest in the European High North. Only Murmansk and Arkhangelsk are bigger and Severodvinsk is as big as Oulu, but population there seems to continue decreasing and Oulu is growing further. Oulu was one of the biggest Nokia center in the whole world. Problems with mobile phones were visible in Oulu several years ago. Total exit of mobile phones planning and manufacturing left thousands of highly skilled people in Oulun without a job. But Nokia still remains in the city. New Nokia which was based on former Nokia Siemens Networks has been strong in Oulu for decades and the situation is still the same. Base for future growth remains strong. City has however been fighting back. According to Business Oulu, investments have started to run back to Oulu especially in ICT-sector. In 2014 nine foreign and three Finnish companies opened branch office or production in Oulu. Two of these were from Norway, China and USA and one from Germany, Taiwan and Italy. According to biggest Finnish Economic newspaper Kauppalehti Oulu Region has got during last two years almost as much venture capital than South Finland. Difficult structural change seems to turn slowly to success story. Investment potential is huge in the region compared with other parts of Finland. Speciality of the region seems to be trade sector with over 1.3 billion investment potential. That is clearly largest in the whole European High North. Arina cooperative is at the moment building enormous Valkea shopping center in the very city. Value of this project is 150 million. However, the trade sector has also got negative results in the city. Famous Finnish shopping giant Stockmann opened big center in Oulu some years ago. In the beginning of 2015 Stockmann told that Oulu center is unprofitable and they are closing it in Real problem is not Oulu, but Stockmann has generally had strong structural economic problems for many years. Also strong investment policy in Russia has strained the development of the company. Bare shopping center sales have turned down in all Stockmann centers also in Southern Finland. Ukraine crisis, collapse of Russian rouble and strong decrease of Russian tourists in Helsinki has pushed Stockman to act before total collapse. The growth of Oulu can be seen also in residential construction. People are moving from countryside to Oulu and also from different parts of Northern Finland. The value of new apartments and houses is estimated to be more than 3.7 billion. Residential investments are not listed in this yearbook. Pyhäjoki in Raahe, about 120 km south of Oulu, is today very important place in Finland. The nuclear power plant of Fennovoima Oy should be there ready in the first years of next decade. Project is very important for Finnish industry and importance is even bigger for Oulu Region. The Pyhäjoki project is huge. Total value of this investment is about 6-8 billion. Fennovoima changed two years ago the project structure and made agreement with Rosatom regarding reactor and other nuclear technology. Company succeeded in the new application process and the supplement to the valid Decision-In-Principle was accepted in parliament and the final financing of the project became ready when Finnish energy giant Fortum joined to Pyhäjoki project. Building and construction start is going to boost all possible investment plans in the region. Start of the investment boom in Oulu Region depends also on the long expected recovery of Finnish economy. City of Oulu is one of the target regions of Finnish Government to develop ICT and it is getting special subsidies for some years. This probably speeds up some projects

43 Main investment projects that start before 2020 Valkea shopping center by Arina in Oulu 150 m Dairy expansion by Valio in Oulu 40 m Power plant and coal injection in Raahe by SSAB 208 Data centers and cloud services in Oulu 500 m Regional wind energy projects m Pyhäjoki Nuclear power plant by Fennovoima m Ritaportti shopping center in Oulu 100 m Wellbeing centers by Cor Group in Oulu 100 m Nallikari tourism center expansion 100 m Other hotel projects like Lapland Hotels in Oulu 50 m Oulu Zone 20 m Seinäjoki-Oulu railway project second phase 344 m VT 8 Pyhäjoki nuclear power plant transport 30 m VT 4 Oulu-Kuivaniemi road 116 m Total: m 3.3 NORTH OF FINLAND - KAINUU REGION Airport Harbour Railway ARCTIC SEA Runner ups - projects that can start if growth is stronger than expected Oulu and Ylivieska railroad yards 46 m Expansion in Kaakkuri shopping center 45 m New power plant by Oulun Energia 500 m Kollaja project by Pohjolan Voima 155 m Mustavaara mine and smelter in Taivalkoski/Raahe 450 m norway sweden FINLAND russia Other mining (Hitura, Kopsa and Raahe gold mine) 55 m all these total: m All total: m 84 85

44 Kainuu is located in the Oulu province and it borders the regions of Northern Ostrobothnia, North Karelia and Northern Savonia. In the East it also borders Russia. The region consists of eight municipalities and two cities. The administrative capital is Kajaani. Municipalities of Kainuu: Hyrynsalmi, Kuhmo, Kajaani, Paltamo, Puolanka, Ristijärvi, Sotkamo, Suomussalmi, Vaala and Vuolijoki. The total population of the region is , Kajaani being the biggest city with nearly inhabitants. Land area is km 2 and population density 3,51 km 2. The town of Kajaani was founded by Count Per Brahe in The River Kajaaninjoki and the ruins of the historical Kajaani Castle are situated in heart of the town. Kajaani Castle celebrated its 400th anniversary in The turnover of companies within the technology industry of Finland has continued its growth during The same trend exists in the region of Kainuu. Currently there are more than 2,300 people employed in the regions ICT and metal industries. The economical development in Kainuu Region was favourable in the first years of the new millenium. The beginning of global financial crisis in the last months of year 2008 changed rapidly the situation. Biggest impact of the new recession has been the total exit of forest industry from the county. UPM company decided to close the mills in Kajaani. Kainuu Region started rapidly to prepare to this enormous structural change. Base from the new growth was found on new ideas. One of the most interesting projects have been the plans to establish data centers in the old premises of closed paper mill right in the center of Kajaani. Kajaani has been competing with two neighbors in the west: Luleå in Sweden and Oulu. Kajaani is a location that has existing infrastructure perfectly positioned for Data Center business so much so that the Finnish Government chose to locate its new Super Computer Data Center on a UPM site that used to house a paper mill. The Super Computer project is due to establish the world s 1 st zero-emissions Super Computer, utilising the local environment in terms of 100% non-mechanical cooling (water and/or air resources). The Finnish government is working with the Green Grid and others to open up and share best practice of design, build and operation to maximise energy efficiency, adhering to similar objectives as the Open Compute program. The transformation of use to a Data Centre has brought significant benefits to further investors to the region by establishing local expertise and easy routes to develop and commission data centers. The site benefits from the availability of significant power capacity (120MW on site renewable & 400MW diverse grid connectivity) and immediately available zoned greenfield land adjacent to the ex-paper mill site. The very secure, sustainable and extremely commercially attractive power and 50 hectares of zoned land spade ready in 4 weeks means the site is available today for Data Center development. The power contracts can be fixed for at least 7 years, providing certainty for the most obnoxious cost elements of running data centers and it is Carbon Neutral Green generation to boot. Furthermore the area benefits from excellent diverse fibre connectivity to the European international exchanges and a unique untapped fibre connection direct from site to the Russian market. As the world s data requirements continue to increase in terms of volume, speed and frequency there is a natural progression for the increased demand for data centers to facilitate the delivery of these expanding information services

45 The increase in demand is happening at the same time as the pressure on the World s electricity capacity and pricing, which are decreasing and increasing respectively. Furthermore the pressure of lowering the Carbon emissions from the electricity production is forcing organizations to look for sustainable renewable energy sources, ideally within geographically suitable areas for fiber connectivity to markets. There is a plethora of locations around the world stating that they have all the major points covered for the high level criteria to facilitate commercially, politically and environmentally sustainable data centers. Given the technology is now available to create zero mechanical cooling in all countries in Northern Europe and the expertise of staffing is easily sourced, the key siting criteria for most Data Center operators and users is based on the following and can take anything up to 5 years to identify and clarify before a data centre goes live: Power Secure, Available, Sustainable and competitively priced, preferably with long term contracts for TCO planning Land Available secure environmentally and geo-politically stable with planning approved Fiber Diverse routes within acceptable latency parameters to markets Tax Commercially and Politically sustainable combined with the ease of doing business The main objective for the Kajaani Data Centre Cluster is to enable the operational environment for the knowledge-intensive data center cluster in Kajaani and to ensure the regional multiplier effect. The project cooperates and networks with companies and institutions in the information technology field, creating visibility for the Kajaani data center. Kajaani DC Cluster will provide the operational framework for new companies, spinoffs, R&D operations and companies that are placing their operations in the data center. Cooperation with the local educational institutes is helping to build a curriculum for data center-specific education within the area and thus ensuring a skilled data center workforce in the area. Tourism is one of the key business areas determined in the regional programme. Kainuu already has plenty to offer for visitors: Vuokatti, Ukkohalla and Paljakka ski resorts, shimmering Lake Oulujärvi, the unspoilt nature of the whole region, various sports activities and cheerful cultural events, just to name a few attractions. In the following years, tourism in Kainuu will be developed further for example by: Developing individual tourist centres Drawing up tourist centre or tourist area-specific Master Plans Cooperating in marketing, particularly on an international level Increasing the level of know-how education & training Improving the accessibility of Kainuu transport connections (Source: Invest in Kainuu, Kainuun liitto) Kainuu Region investment potential Industry North European Biotech Oy, Cellunolix -etanol plant 40 m ICT sector investments 10 m Total: 50 m Mining industry Solidium/Talvivaara nickel mine, 500 m environmental investments and business continuity Sotkamo Silver Oy, Taivaljärvi silver mine 40 m Otanmäki mine Oy 450 m (Regional Council of Kainuu estimate) Total: 990 m 88 89

46 Wind power Loiste Energia/Taaleritehdas, Kivivaara-Peuravaara, Hyrynsalmi-Suomussalmi 150 m Otsotuuli, Teerivaara, Paltamo 100 m Otsotuuli, Kokkosuo, Kajaani 90 m Otsotuuli, Iso Tuomivaara, Hyrynsalmi 36 m TuuliSaimaa, Metsälamminkangas, Vaala 122 m Solidium/Talvivaara Mining Co., Talvivaara mining area, Kajaani-Sotkamo 90 m Otsotuuli and Prokon Wind Energy, Lumivaara, Hyrynsalmi 81 m Metsähallitus Laatumaa, Piiparinmäki-Murtomäki, Kajaani 95 m Total: 683 m Tourism Holiday Club Vuokatti expansion 45 m Sokos Hotel Vuokatti expansion 20 m Other sector investments, several operators 205 m Total: 270 m Public investments New central hospital, Kajaani 120 m Hauhola-Lehtikangas community center 24 m Other investments in education and culture sector 29 m Investments / Kajaani city center 15 m Small investments in social and health care (buildings) 19 m Bio Energy, Municipality of Suomussalmi 10 m Total: 217 m Transport infrastructure Vartius rail and border crossing construction, Kuhmo 12 m Raw wood terminals, Suomussalmi and Sotkamo 10 m Kontiomäki-Kajaani-Sukeva, rail construction (Kainuu) 15 m Kontiomäki-Suomussalmi, rail construction (Kainuu) 50 m Oulu-Kontiomäki-Vartius, rail construction (Kainuu) 38 m Vt 22 / Kt 89 Oulu-Kajaani-Vartius, road construction (Kainuu) 15 m Other important road construction investments 10 m Total: 150 m Kainuu Region total: bln Development of the region by Timo Rautajoki The mining industry investments in Sotkamo gave a powerful growth for Kainuu almost ten years ago. Talvivaara nickel mining project was the number one investment project in whole Finland. Global financial crisis had strong impact on nickel prices and after wet and rainy winter came more wet and rainy spring and summer. Rain continued in the fall and all the water gathered in the mine started to spill over. Worst of all was that rain spilled also production sewage waters to surrounding lakes and small rivers. Helsinki authorities noticed that new mine had created in Finnish scale a huge environmental problem that fortunately didn t turn to a catastrophe, because the damages happened inside the mining area. Winter has got a lot of wet snow and rain from the end of February. Situation in the Talvivaara mining area is still crucial

47 Talvivaara mining company has drifted to almost bankruptcy. State owned Solidium Oy has taken over the project and tries to solve all outcoming problems. Government has already decided to subside Talvivaara with almost 200 million. Main task for Solidium is to solve environmental problems and prevent more damages. Almost as important task is to find an international mining company to partner in mining company and then after successful recovery sell the share of Finnish state totally to new owner. So far rumour has it that at least two companies are interested in this. One is Nyrstar, a big mining company with origins from Belgium, which has previously been a customer of Talvivaara. Other interested company is Swedish mining giant Boliden. Resolving these issues and restoring the reputation on the international markets is a vital prerequisite for implementation of the proposed expansion plans. One reason for the problems has been new chemical technology used in the mining process. The extraction from mine has been put on big piles on the ground. After some months chemical process nickel could have extracted finally from the stone material. Rain has a certain role in this process and if it rains too much, the process stops. This has happened in Talvivaara and processes have been stopped, but some big piles still exist and restarting of process gives nickel worth of some billion. That is why the project will survive and is interesting from mining companies point of view. Other sectors experiencing development in Kainuu are tourism and other forms of energy production. Resolving Talvivaara s problems is also a key issue for tourism. Expansion investments exceeding 50 million euros are planned for Sotkamo which is only some tens of kilometers from the problematic mine. The focus for energy production is on wind power, and a number of wind power plans are in place for the region. Main investment projects that start before Continuation of Talvivaara mine 500 m 2. Cellunolix ethanol plant by North European Biotech Oy 40 m 3. ICT projects in Kajaani 10 m 4. Wind power projects 376 m 5. Sotkamo hotel expansion (Holiday Club and SOKOS) 65 m 6. New Central hospital in Kajaani 120 m Total: m Runner ups - projects that can start if growth is stronger than expected Taivaljärvi silver mine by Sotkamo Silver Oy 40 m Kainuu railway projects 103 m Total: 143 m All total: m Talvivaara has had an expansion plan called Overlord, which would be worth over a billion euros. At this moment the expansion seems to be impossible. It is almost tragicomic that the financing which is crucial for a company to survive is also some kind of investment and it is all the time growing. In addition to this massive survival project, the Taivaljärvi Silver Mine near Sotkamo is opening, which was listed on the Helsinki Stock Exchange in July By size, the project is significantly smaller than Talvivaara. The date of the implementation start is unknown, but project is still active

48 4. NORTH OF SWEDEN - NORRBOTTEN/SWEDISH LAPLAND 4.1 Norrbotten Norrbotten County (Norrbottens län) is a county in the North of Sweden. It borders to Västerbotten County and the Gulf of Bothnia. It also borders the counties of Nordland and Troms in Norway, and Lapland Province in Finland. Airport Harbour Railway ARCTIC SEA Norrbotten has some inhabitants, which represents three per cent of Sweden s population. There were people in this part of the country as far back as the Stone Age, years ago. Reindeer husbandry and the Sami culture are couple of thousand years old. The mountain area in Norrbotten, which is part of the Scandinavian mountain chain, is a near 100 km wide zone running from North to South. All of Sweden s mountains above 1800 meters are located in this area. Many of them are in the Sarek area and the Kebnekaise mountains, which are the two most extensive high mountain regions. norway sweden FINLAND russia The county railway network, both in a north-south direction and to Finland and further on eastwards is a vital link, both for goods traffic and passenger traffic. The Ore Railway between Luleå and Narvik in Northern Norway is one of the country s most important goods routes. Half Sweden s tonnage of railway freight is transported from Kiruna to Riksgränsen and on to Narvik in Norway. In Norrbotten County there are five airports with scheduled flights: Luleå Airport, the fifth busiest in Sweden, Arvidsjaur, Gällivare, Kiruna and Pajala. The county is crossed by a national road network, which links to Norway and Finland

49 The roads in Norrbotten are important also to link together this vast county. Nine per cent of Sweden s road network is in Norrbotten County, a region where the rate of car ownership is among the highest in Sweden. The harbour in Luleå is Sweden s leading bulk goods terminal. An effective ice-breaker service enables the ports of Piteå and Luleå to remain open all year round for the intensive shipping. The Port of Kalix is open to shipping during the ice-free period. Luleå University of Technology is Scandinavia s northernmost technical university, with world-class research and education The university today has more than 12,000 students, 1,400 employees, and an annual turnover of more than 1,000 million SEK. Cooperation with the surrounding community is one the university s characteristics. Luleå University of Technology is now widely known as a business university. Luleå University of Technology offers courses at basic, advanced and research level in engineering, business administration, social sciences, health, music, media, teaching and drama. The university recruits students from both in and outside Sweden. The university s regional remit includes cooperation with among others the municipalities in the region to offer customised education, not least through the campuses in Skellefteå, Piteå and Kiruna. Research is carried out at the university in close cooperation with companies that include Shell, Ericsson, Ford/Volvo, LKAB, Airbus, Volvo Aero and IBM, and with international partners such as Monash University in Australia and Stanford University in the US. The university s research has an annual turnover of more than 500 m SEK in six priority areas: mining technology and metallurgy, customised construction,mechanical engineering, process IT, product development and environmental engineering. Production of raw materials may be the main driver of Norrbotten s economy, but small and medium-sized enterprises are assuming a role of ever greater importance. The willingness of existing companies to invest has never been so high. LKAB mining is investing thousands of millions of SEK in Kiruna and Malmberget. Boliden AB mining is investing similar amounts in Aitik Copper Mine near Gällivare. The IKEA start-up in Haparanda is attracting retail chains to the area, and housing and hotels are under construction. Because of the geographical location, companies there have their customer base in both Sweden and Finland, and even in Norway and Russia. Testing operations in the inland municipalities of Arjeplog, Arvidsjaur, Gällivare, Kiruna and Älvsbyn are constantly growing. Multinational companies here test car components, aircraft and missiles. Polarbröd in Älvsbyn delivers frozen bread all over Sweden and also exports to European countries. Älvsbyhus is the largest manufacturer of prefabricated homes in the Nordic region. Polarica in Haparanda deals in berries and game meat for the European and world markets. Among Norrbotten companies, Polarica has been a pioneer in trade with Russia and the company has a production plant in Poland. Polaris Eyewear AB in Boden manufactures eyewear and has subsidiaries in England and Japan. Liko AB in Luleå is a world leader in patient lifts for the care sector. Luleå is northern Europe s main metallurgical development centre. SSAB is one of the world s leading producers of steel. Gestamp Hardtech supplies the European and North American automotive industries with collision protection components and Ferruform makes chassis components for trucks and buses. Research and skills development are creating new industries in the county. At Luleå university s School of Music in Piteå, the focus of the Acusticum Business Park is on music and media. Gällivare has concentrated on medical technology; Kalix and Pajala on computer technology and electronics. The basis of Boden s local economy has shifted from the public to the private sector. International space and environmental research is carried out in Kiruna

50 The Gross Regional Product (GRP) is the regional equivalent of the national yardstick - Gross National Product (GNP). GRP is the aggregate value of all goods and services produced in a region in a given year. GRP shows how great production is, reckoned in SEK. The average GRP for Sweden was 319,000 SEK per capita in This amount was given the index value 100. The index for Norrbotten County was 99, i.e. one per cent lower than the national average. The reason why Jokkmokk Municipality has such a high GRP is that some of Sweden s largest hydropower plants are in the municipality while the municipality has few inhabitants. The county has the second highest productivity after Stockholm County expressed as GRP per employee. In the years , industry annually invested an average of 6,800 SEK per inhabitant in Sweden. The biggest industrial investments were in Norrbotten County, at 36,000 SEK per inhabitant. Norrbotten County has roughly 2,340 import companies and about 890 export companies. Most of the export and import companies in Norrbotten County trade with other EU States. The county has a smaller proportion of export companies trading within the Nordic region than the average for Sweden. The harbours in Luleå and Piteå are open to shipping year round, thanks to the national icebreaker service, which assists vessels all along the coast of northern Sweden during the winter. In terms of tonnage, the port of Luleå is among Sweden s five largest, largely thanks to its handling of raw materials for the mining and steel industries. Piteå is a shipping port for wood and paper. Both harbours handle petroleum product imports. Forestry is of major economic importance to the development of Norrbotten County. Almost 40 per cent of the county is forested. More than half is owned by different forestry companies. In all, the forestry industry employs around 4,000 people in the county. The county has three pulp and paper industries: Smurfit Kappa Kraftliner AB and SCA Packaging Munksund AB, both in Piteå and Billerud Karlsborg AB in Kalix. The plants in Piteå manufacture brown and bleached kraft liner. The plant in Kalix manufactures bleached sulphate pulp, sack paper and kraft sack paper. The county s five largest sawmills all produce more than 70,000 cu m sawn and processed wood products annually. They are located in Kalix, Luleå and Piteå. There are 20 hydropower plants in Norrbotten County producing over 14 TWh of electricity. That represents 11 per cent of Sweden s total electricity production. The biggest power plants are on the two rivers Lilla Luleälv and Stora Luleälv. The county is self-sufficient in electricity and half of the electricity produced here is transmitted to other parts of the country. Investments in wind power have increased significantly in the county. In Piteå Municipality, major investments are being made in new plants which will produce approximately 12 TWh of electricity a year. The primary industries in the county are highly energy intensive and their energy consumption is 75 per cent of Norrbotten s total consumption. About 42 per cent of the supplied energy in the county comes from fossil fuels, while renewable fuels constitute 38 per cent of the total energy supply. For 2006, energy consumption in the county amounted to around 31 TWh. Luleå airport is Sweden s fifth largest airport with 20 arrivals and 20 departures daily (weekdays). Domestic destinations are Göteborg, Kiruna, Pajala, Stockholm, Sundsvall, Umeå och Östersund. International flights to London. Geographic position, good service and high level of safety make Luleå Airport an attractive airport for air cargo. The strategic location in the Barents region makes Luleå Airport interesting for the world s air freight carriers. Within the airport s geographic market region are the Norwegian fisheries and oil industry, world-leading engineering compa

51 nies in northern Sweden and Finland, and enormous gas, oil and mineral reserves in northwestern Russia. Kallax Cargo develops air cargo services at Luleå Airport in cooperation with LFV, forwarders and logistics companies in the Barents region. (Source: Facts about Norrbotten, Länstyrelsen i Norrbottens Län) Future Development of Norrbotten Business opportunities in Norrbotten are based on climate and raw material assets that are unique from an international standpoint. Great investments have already been made, but there is an enormous potential for business associated with investments that are also planned and secured for the next ten-year period. The Node Pole region in northern Sweden, close to the Arctic Circle, as Norrbotten calls itself, holds a combination of ideal inherent qualities for major data centers and high-tech industry. In northern Sweden, the electricity grid has an extremely high redundancy and capacity, which is vital for powering for instance data centers. Among the lowest electricity prices in Europe, 100% renewable hydropower and a highly developed infrastructure are three other aspects that make The Node Pole unique. The Node Pole is one of the most secure and stable places in the world geologically, politically, socially and digitally. Sweden has not been to war since 1814, the seismic activity is extraordinarily low, and the country is ranked as number one in Europe regarding technology readiness, ICT use and broadband quality. The region is well known for its higher education. Luleå University of Technology conducts research and innovation within diverse fields such as distance-spanning technology, long-term digital preservation and lower energy consumption of web technologies. In addition, Luleå Science Park, the University s next-door neighbor, is one of Sweden s fastest growing science parks. The region is already one of Scandinavia s leading skill centers in ICT Information and Communications Technology. The Node Pole is at the same latitude as Fairbanks, Alaska, USA, and is the coldest region in Sweden. The climate enables fresh air cooling all year round. Read more about how nature s combined forces can enable cost savings and more efficient cooling operations. Norbotten can also show results of promotion the Node Pole idea. Facebook has already opened first data center in Luleå and is preparing to build two more centers in the neighborhood. Cold, dark and sparsely populated Norrbotten converts the natural advantages to competitive advantages. The region s potential for cold climate testing, with strong collaboration between academia and industry. Main part of this activity is concentrating to Arvidsjaur region, west from Luleå. Norrbotten can provide the market s most energy-efficient solutions, and what s more, they are 100% green. The lowest energy costs, free low temperatures, good communications, attractive start-up locations and well-qualified personnel are also what Norrbotten has to offer. Svevind company is engaged in wind power in the north of Sweden, and its project in Markbygden, Piteå Municipality, has the potential to become one of the largest wind farm networks in Europe, and maybe even the world. Once fully developed in 2022, its accumulated production output is expected to reach 8 12 TWh. This is equivalent to one-third of Sweden s total hydro power production, and involves investment in the region of EUR 80 million. Several stakeholders have joined forces to realise the gigantic Markbygden wind power project in Piteå Municipality. A key player in the initiative is German company Enercon, which features among the world s largest wind turbine manufacturers. Enercon currently employs 60 staff in Piteå, a figure which is set to climb as the project continues to expand. Norrbotten is home to Europe s largest iron ore production with more new mines waiting in the wings. LKAB s underground mining operations are carried out using world beating technology. A century of high tech devel

52 opment has also led to a number of world beating products. Magnetite ore (the rock) is transformed into the worlds most eco-friendly iron ore pellets (the roll). Just over 40 years of age, Luleå University of Technology LTU is one of Sweden s youngest higher education institutions. The emergence and development of the university is closely linked with the region s extensive mining and mineral industry today, LTU is renowned as one of Europe s most comprehensive universities in the field. The mining sector is crucial for Norrbotten. LKAB has been carrying out mining operations in the region since the end of the 19th century. According to a recent survey, both directly and indirectly, through subcontractors as well as related industries, LKAB has contributed towards the creation of 54,000 jobs in the Cap of the North. SGU has been mapping the geology of Sweden for over 150 years. The national drill core archive, in Malå, is one of the world s largest, featuring over 3000 kilometres of drill cores from across the nation. The cores have been accumulated by the Government as well as private prospecting companies. (Source: Invest in Norrbotten) Norrbotten investment potential Industry SSAB, Luleå, blast furnance 200 m Facebook, Luleå Porsön, project m Facebook, Luleå Porsön, project m Total: m Mining industry LKAB finalizing iron mine expansion project m Hannans Reward/Rakkurijoki iron mine m Hannans Reward/Lannavaara iron mine m Hannans Reward/Pahtohavare gold-copper mine 500 m Jokkmokk Iron Mines AB, Kallak iron mine m Boliden AB, Laver copper mine m Pajala iron mining expansions 600 m Total: m Hydro power Vattenfall AB, power plant capacity upgrade Luleälv m Wind energy Piteå, Markbygden wind park m WPD Luleå 300 m WPD Kalix, Bergön 170 m Kraftö Vind AB, Piteå 140 m Kraftö Vind AB, Arvidsjaur 95 m Total: m Energy transfer network Norrbotten network 200 m Trade Barents Center, Haparanda 120 m Tourism/winter testing Arjeplog, car test climate center 560 m Railtest Nordic, Jörn/Arvidsjaur, trains testing center, Norrbotten side 150 m Träkronan hotell, Piteå 35 m Spaceport Sweden, Kiiruna space tourism 220 m Total: 965 m

53 Transport infrastructure Regional road projects 85 m Pajala-Svappavaara road 150 m Pajala-Svappavaara railway 400 m Kiruna-Narvik railway, bypass tracs Kiruna 90 m Kiruna-Narvik railway, second track Kiruna side m Norrbotniabanan railway Umeå-Luleå, Norrbotten side m Luleå sea port 55 m Total: m Norrbotten total: m Development of the region The economic development in the northernmost Sweden has been very rapid during last five years. Norrbotten in particular has entered a new age, thanks to mining industry investments. Government of Norrbotten published in January 2015 a survey made by Luleå Technical University about the role of Norrbotten in Swedish national economy. The region has been during last five years one of the most dynamic growth regions in Sweden. Between 2011 and 2013 about 15% of the industrial investments in Sweden were implemented in Norrbotten and the region was seventh biggest export region in the country. The investments for the next ten years are still expected to be around 20 billion euros. The mining company LKAB alone has responsible for investments totalling more than three billion euros into Kiruna, Malmberget and Svappavaara. The company has decided to double its iron production from the current 19 million tons a year to approximately 37 million tons. Even the town centres of Kiruna and Malmberget will have to be relocated to make way for the expansion of the mine. Recently the problems in global iron production has changed a little bit the situation. LKAB is finalizing investments during next five years and some plans are cancelled. Company has also told that they must lay off temporary some hundreds of employees if the situation is not getting better. The province will also have other large mines, including Kaunisvaara for the Pajala Municipality close to the Finnish border. Mining company Northland which is operating in Pajala has been a long time in big economical problems which have been leading the company to bankruptcy in the end of Pajala mine is at the moment closed. Bankruptcy administration is maintaining only the most important actions in the mine so that possible new owner could continue mining without any longer interruption. Pajala mine has still expansion plans, but implementation of those depends on much better times for mining sector and a lot bigger demand of iron in the world market. Two iron mine projects are also ongoing in the neighbouring areas of Kiruna, one of which is located close to the town of Jokkmokk. This project has had problems with indigenous people in the region. Saami community is against the mine and main reason for this has been problems with reindeer herding. Norrbotten County Government has also decided due this contradiction to resist the project. Final decision about the license for project is going to be made in Stockholm. One of the newest mining project is in Älvsby where Boliden has promising copper project. Latest published mining project is Lannavaara iron mine which is located north from Karesuando near Finnish border. The owner of this project is Hannans Reward and its subsidiary Scandinavian Resources. Project is also interesting from Lapland point of view. Company has told that one option for transporting the ore could be railway on Finnish side to Skibotn in Norway. This could speed up the western Arctic Railway project of Finland

54 Jokkmokk iron mine project problems are new in Sweden. Iron mining has more than one hundred years tradition in Norrbotten. Mining business has been very popular in Swedish society due to thousands of jobs with good salary. The confrontation between mining project and reindeer herding escalated in summer 2013 to small riots. Local Sami population states that mining is destroying the reindeer herding and mining company claims that both parties can live together. Problem is about to grow because most of the new deposits seem to be in the regions where Saami community in Sweden lives. Governor of Norrbotten, Mr. Sven-Erik Österberg was nominated to mediator to this new problem. Results of his work are sure worth of evaluation also in Finland. The largest investment sector is nevertheless wind power. A massive wind power park with over 1100 wind turbines is currently under construction for the Markbygden area west of the town of Piteå in the inland regions of Norrbotten. Hydropower investments are seen in the province by increasing the efficiency of the power plants along the Norrbotten rivers at a cost of over one and a half billion euros. The electricity distribution network is also being greatly expanded. Investments into the mining industry require functioning traffic connections. Together with the company, the requirements of LKAB have been met by updating the Kiruna track and rail yards. In the near future, the bypassing areas of the Kiruna Narvik track will be improved and over the next few years project continues. The construction of the second track was speeding up in July According to the report of swedish-norwegian working group double track between Kiruna and Narvik is necessary and profitable. Due to mountain region investment cost is high up to 2.5 billion. Swedish part of this is about 1.3 billion. The Swedish Government has made enormous investments into traffic for the mining industry. For instance, in September 2012, the government alliance decided on the construction of the Pajala Svappavaara road and an increase in the junction points with the ore track. According to the decision made, a massive 12.5 billion euros has been reserved for investing into the traffic requirements of the mining industry up to Most wanted railway project in the region, the Norrbotniabanan project seemed to be postponed to distant future, but it found resurrection after the parliamentary election in Sweden last year. New social democrat leaded minority government mentioned this railway project in the state budget for 2015 and promised to make start decision before Government was in serious political problems due to state budget and new parliament elections seemed to be inevitable. Swedish political showed once again that difficult political decisions can be made in the country and the budget was approved and government continues also with Norrbotniabanan. Latest news tell that government has decided to apply EUfinancing to project which is totally almost three billion. The Norrbotten forest industry has also made smaller investments on a continual basis. Some kind of industry are also big data centers that are planned to be build in Luleå. First center for Facebook is ready and in full use. Facebook has started second center project in 2014 and third is coming a couple of years later when number two is finished. According to Invest in Norrbotten there are also other same type of project in Luleå and Boden coming to implementation during following years. The biggest expectations for the future of the province lie with tourism. The big increase in tourism to Lapland has been noticed in Norrbotten, which has led to substantial investments made into marketing Swedish Lapland. As a result of intense national investment, the main attractions of tourism in the province, the Jukkasjärvi ice hotel and Kiruna space centre are expected to make a big appearance on the markets. Car testing is growing branch of business in Norrbotten and it supports tourism. Testing companies need accommodation, new hotels and even new airports. Arjeplog has been a leading car testing center in European High North. Due to climate change winter seasons are not so cold as before and they have become shorter. Arjeplog has a major plan to build year around open tunnel or huge climate hall for winter testing. In spite of this Test World Oy opened in Ivalo Lapland first climate hall in the world with 360 meters long track. Arjeplog plans are much bigger, but competition between Norrbotten and Lapland continues

55 Railtest Nordic is totally new innovative idea in Northern Sweden. An abandoned railway between Jörn in Västerbotten and Arvidsjaur in Norrbotten is 70 km long and according to the company suitable for train and locomotive testing especially in winter conditions. Total value of this investment is about 300 million. 4.2 NORTH OF SWEDEN - västerbotten Main investment projects that start before 2020 Finalizing the LKAB project m SSAB Luleå blast furnace 200 m Facebook 2 and 3 in Luleå m Airport Harbour Railway ARCTIC SEA Vattenfall AB hydro power projects m Wind power projects m Norrbotten energy networks 200 m Barents Center Haparanda 120 m Winter testing projects (Arjeplog,Jörn/Arvidsjaur) 710 m Regional road program 85 m Pajala-Svappavaara road 150 m Malmbanan bypass 90 m Norrbotniabanan m Luleå Sea port 55 m Total: m Runner ups - projects that can start if growth is stronger than expected Pajala- Svappavaara railway 400 m norway sweden FINLAND russia Kiruna-Narvik second track m Träkronan hotel Piteå 35 m Laver copper mine by Boliden m Total: m All total: m

56 Västerbotten has a population of around where 80% live along the coast and the remaining live in the sparsely populated interior and mountain areas. One can say that 70% of the population is concentrated to 20% of the total area. The population in the interior is concentrated to the chief city in each municipality and it has decreased significantly over the past 20 years. In sharp contrast, Umeå has been one of the most dynamic cities in Sweden with a population growth of 27% during the period of The other coastal municipalities have decreased in population. Västerbotten is a productive region with strong and diverse business sectors. It is at the forefront of R&D, has abundant natural resources and is an attractive location as a gateway to Northern Scandinavia and the Barents region. Companies locating in Västerbotten benefit from a strong entrepreneurial tradition, competitive costs for personnel, operations and facilities, an excellent infrastructure and a reliable, well-educated work force. The region offers readily available land and premises at affordable costs. Companies establishing businesses in Västerbotten may also apply for financial and employment incentives from the government. Västerbotten has experienced one of the highest GDP growth-rate of all Swedish provinces for the last six years, with an increase of 48% compared to the national average of 40%. A strong industrial culture, based on forestry, mining and pulp and paper, is making way for new high-tech industries, creative companies and a high-productivity manufacturing and processing sector. Since the region hosts most of Sweden s energy resources, there is also an active development of eco-friendly power and heating solutions. Västerbotten has a collaborative spirit with many established networks and consortiums, business incubators and cross border research and development. The region has three universities, Umeå University, including the world known Umeå Institute of Design, Luleå University of Technology and the Swedish University of Agricultural Sciences. The universities all offer inspiring environments for students, researches and scientists, whom are world leaders in many fields. The region s universities are constantly evolving and improving through regional, national and international cooperation with trade and industry, research institutes and authorities. The region s well-developed infrastructure with seven airports, deep sea ports, railroad communications, trucking service and an excellent road network with three European highways make it easy to travel and carry freight. Västerbotten also has a world-renowned development of both mobile and fiber-based broadband, and an extensive GSM and 3G network coverage. For example, Umeå has the fastest broadband connection in Europe. In Västerbotten, life is family-friendly with very high standard of living at an affordable level, whether you choose the city life or the countryside calm. There are sunny summers and snowy winters. Beautiful and unexploited nature and wildlife are just around the corner, and the opportunities for sports, entertainment, outdoor activities and culture are endless. Västerbotten has the lowest crime rate in the country. Streets are safe, and people are honest and helpful

57 More Västerbotten advantages: Low corporate taxes Lowest electricity prices in Sweden Energy tax in the province is only 66% of the normal Swedish rate Green and energy-saving solutions for a dependable power supply Gateway to Northern Scandinavia and the Barents region Access to world-class R&D Highly educated and skilled work force Low labour costs Low absence due to illness Most citizens speak fluent English Advanced users of new technology Highly sophisticated health care Good schools Snowy winters and sunny summers Low living costs Manufacturing industry The manufacturing industry in Västerbotten is a wide-ranging network of innovative and flexible companies with a joint capacity for, and experience of, extensive supply contracts. Based on the region s long traditions and strong clusters in forestry, mining and pulp and paper, several major manufacturing companies have evolved and reached a global market. Among the subcontractors, there are a large number of small and medium size engineering companies characterized by advanced technologies and successful collaborations. Thanks to a low staff turnover, many of the companies have been able to build unparalleled levels of competency over a long period of time. With a strong industrial culture and a strategic position as a gateway to Northern Europe and the Baltics, Västerbotten is a perfect place to start new manufacturing processes or find qualified partners, even for largescale projects. Suppliers and subcontractors cooperate with a mutual interest in developing the region, and are prepared to make the investments and modifications necessary to take on new types of products. The opportunities to recruit staff locally are excellent thanks to the many courses available at secondary school and university levels developed in close cooperation with the local trade and industry sector. The region also has a well-developed infrastructure adapted to the needs of heavy industry, including railway, deep-water ports and excellent roads. The roads have always played a significant role in the growth of the region and are still one of the most important means of transport for both goods and people. Västerbotten has a well-developed transport and communications infrastructure. Accessibility of the region by road is good. In fact, Västerbotten has Sweden s longest road system 10,000 kilometres of public roads to which can be added an expansive network of private roads. Forest industry With a long forestry tradition and a strong supply of raw material hectares of productive forest Västerbotten in north Sweden has generated exceptional craftsmanship as well as unrivaled know-how in large wooden constructions, solid wood frames and glulam products. World-class institutes like Luleå University of Technology, Umeå Institute of Design, the Swedish University of Agricultural Sciences and SP Trätek (the Swedish National Testing and Research Institute for wood technology) are constantly taking R&D to new heights in fields like wood and biofuel technology, wood physics, ultra structure, forest biotechnology and industrial design. Västerbotten also hosts the world s densest cluster of forestry machine manufacturers and developers, including the headquarters and production plant of Komatsu Forest in Umeå and an R&D center for intelligent off-road vehicles

58 Umeå Plant Science Center (UPSC), a centre of experimental plant biology, is the world leader in forest biotechnology and attracts hundreds of international scientists. Companies like SweTreeTechnologies provide technologies for improved productivity and performance properties of trees and wood fibers, creating new business opportunities for forestry, paper- and pulp industries as well as packaging and textile. With the forest biotechnology as an emerging market, Västerbotten offers an educated workforce and unique access to academic research through tech transfer establishment, as well as many forest research sites and strong links to the processed wood industry. Mining industry Sweden is by far the largest producer of iron ore and also number one for lead in the EU, the second largest silver, gold and zinc producer, and the third largest copper producer. Some of the most important ore deposits and interesting geological regions are found in the Skellefteå district in Västerbotten. Ever since the 1920 s, the mining and smelting company Boliden has been the major force behind the development of the mining industry in the mineral rich Skellefteå field. Today, Boliden is the third largest copper supplier and the third largest zinc supplier in Europe. The processing plant Rönnskär is one of the most efficient copper and zinc smelters in the world. Rönnskär is also a specialist in the recovery of base and precious metals from electronic scrap. Mining industry is growing rapidly. New mines open almost annually, and a significant number of new exploration permits have been granted. Yet, it is estimated that only 20% of the mineral assets in North Sweden have been exploited. Potential for new findings is still very good and there is a continuous establishment of new operators. Some of the current exploration and mining companies are New Boliden, Elgin Mining, Canada, Dragon Mining, Australia, Blackstone Ventures, Canada and Lapland Goldminers, Sweden. Thanks to the dominating role mining has played in trade and industry for centuries, mining infrastructure is well developed, with highly advanced mining and metallurgy R&D. Sophisticated technology with a high level of automatisation makes our mines among the most efficient and profitable in the world. The region is home to several competence centers and two universities with world-class research institutions. 90% of Sweden s academic and vocational units related to mining, metallurgy and geology are located within a radius of 130 kilometers. Both the Geological Survey of Sweden (SGU) and the Mining Inspectorate of Sweden are located in the region. SGU assists mineral explorers with exploration-related information and data. The world s largest collection of drill core, more than m from all over Sweden, is available for research free of charge! There are also a number of specialized companies linked to the mining industry, such as world-class manufacturers of mining equipment and machinery, mining software developers and drilling services companies. With an ever-growing industry there is a high demand for technical consultants and environmental expertise. As one of Europe s largest concentrations of mining and mine related industries, we aim to expand even further. The prospects for a profitable business establishment in Västerbotten have never looked better! Tourism With four full seasons each of them as beautiful as they are different the potential for tourism business to grow in Västerbotten, North Sweden, is practically unlimited. Travel and tourism is expected to double in Sweden by 2020 according to the Swedish National Strategy for Tourism which indicates a bright future for the travel industry. The northern parts of Sweden already attract visitors from all over the world and the growing interest has led to an increased need for high-quality accommodation and activities

59 In 2011, Sweden was ranked the 5th best country for tourism, according to the World Economic Forum The north of Sweden is of great interest to the global market and tourism is expected to grow by 100 percent by 2020, from SEK 252 billion to SEK 500 billion, according to Sweden s National Strategy for Tourism. The exotic north attracts visitors thanks to a unique blend of experiences and surroundings, beautiful and untouched nature, the northern lights and much more. Västerbotten, a central part of Northern Sweden, is experiencing rapidly growing international interest, and the opportunities to meet the demand are manifold. With investments in ski resort destinations, hotel and accommodation, real estate development, activity companies and medical tourism; anyone from large capital investors to small scale private companies can discover new markets and grow in Västerbotten. Transport The main axis runs along the coast (E4 motorway linking the South of Sweden and Finland). In an east-west direction the E 12 links the countries of Russia, Finland, Sweden and Norway. The main road in the western part, going in a north-south direction is the E45, starting in Gothenburg and ending in Karesuando. Västerbotten has four distinct seasons, each one with its own exceptional features widening the potential of the region and providing an extra advantage. But the potential of Västerbotten also resides in the people who live and work here. With a service minded attitude, pleasant manners and good language skills, they make the difference. But Västerbotten isn t all about nature. The cities offer shopping, excellent restaurants and various cultural activities. A unique cultural feature of northern Sweden is one of the few remaining indigenous people in Europe, the Sami. Their strong heritage influences the culture of the entire region of Västerbotten. Moreover, in 2014 Umeå will be the European Capital of Culture an honour that further reveals the viability of the region. Rail services are well established. The Swedish National Railway s main line to northern Sweden runs through Västerbotten, connecting the northern part of Sweden with Europe, along with several regional railway lines. Branch rail lines provide access to the main industrial sites. The Bothnia Line along the coast will significantly cut rail travel times, it will be opened for traffic in August The Bothnia Line is the biggest railway project of modern times in Sweden. It is a single-track railway being laid from the bridge over Ångermanälven, north of Kramfors airport, via Örnsköldsvik, Husum, Nordmaling, to Umeå

60 The Bothnia Line will link together a highly productive region, where a series of significant industrial locations are all situated along the Swedish coastline. This new link will mean efficient transport of freight and the halving of travelling times for passengers. The Bothnia Line will be able to cope with speeds of up to 250 km/hour. Inlandsbanan ( the inland railway ) runs from Kristinehamn in the south to Gällivare in the north a total distance of 1300 km. Shipping is important to the existing companies and those looking to invest in northern Sweden, particularly for the forest and mining industry (export and import of raw materials and products). In the Västerbotten province there are industrial seaports in Umeå, Skellefteå and Rundvik, together with smaller ports all along the coastline. The continuity of service is a major goal and year round accessibility is guaranteed by efficient ice breaking during the winter. Umeå Hamn is a year-round port which is located at the north of Sweden s fastest expanding part and is known for its high quality and a strong customer orientation with a high level of service. The port is located strategically at the natural shortest route across the northern Gulf of Bothnia. Geography provides the port with a natural harbour sheltered by the unique conditions in the winter. Despite being located far north in the northern Gulf of Bothnia s narrowest part with mostly northern winds the Umeå port as well as the other seaports along the coast are open all year round. The port of Skellefteå (Skellefteå Hamn) is one of the gateways for sea transport in Norrland. The port is located in Skelleftehamn, adjacent to the industries of Rönnskär and Kuusakoski. It is also strategically located close to sawmills, mines and engineering companies and acts as an important link between Norrland s industry and its assets: minerals, forests and energy. Many years of working with the region s industries have given Skellefteå Hamn a solid base of experience in the transportation of goods. The port has all the resources to serve as a gateway to the rest of the world. Skellefteå Hamn has excellent links with other transport systems including the national road and rail networks and air services. Another key advantage of Skellefteå for mixed consignments is its proximity to ports in northern Finland. Västerbotten has several airports in Umeå, Skellefteå, Lycksele, Vilhelmina, Storuman Hemavan and Arvidsjaur. All the regional airports have regular connections with Stockholm airport (Arlanda). Hemavan in the mountains has an airstrip for taxi-, charter- and private aeroplanes. (Source: Västerbotten Investment Agency) Västerbotten investment potential Industry SCA Obbola, new digester 60 m Kåge/Sävor saw mill technology 10 m Total: 70 m Mining industry Nickel Mountain AB, Rönnbäcken nickel mine 1.5 mrd Lappland Goldminers AB, Fäboliden gold mine 200 m Tertiary Mining, Storuman fluorspar mine 40 m Total: m Hydro power Vattenfall AB, modernization 100 m EON AB, technology upgrade 100 m Total: 200 m

61 Wind power Storuman wind park m Skogsmark wind park 900 m Blaiken wind park 550 m Vattenfall AB Fäboberget 715 m Nordisk Vindkraft AB Malå,Hovaberget, etc 310 m Nordisk Vindkraft AB, Lycksele 330 m Wpd Västerbotten 250 m Vattenfall AB Sorsele 550 m Fred Olsen Renewables, Botsmark 190 m Kraftö Vindkraft AB, Nordmaling 200 m Kraftö Vindkraft AB, Ava 105 m Kraftö Vindkraft AB, Täfteå 60 m Kraftö Vindkraft AB, Sorsele 280 m Total: m Energy transfer networks Svenska Kraftnät AB 300 m Tourism /winter testing Hemavan-Tärnaby, expansion 500 m Railtest Nordic, Jörn-Arvidsjaur, Västerbotten side testing center 100 m Skellefteå, new hotel 40 m Total: 640 m Transport infrastructure Umeå road projects 240 m Skellefteå road projects 200 m Storuman logistical center 225 m Norrbotniabanan railway Umeå-Luleå, Västerbotten region m Total: m Public investments Skellefteå Culture center 45 m Västerbotten total: m Development of the region The completion of the Botniabanan track has, among other things, improved the transportation connection and logistic status of business. During the next years, construction of the coastline track is expected to continue to Luleå in Norrbotten as the Norrbotniabanan project. The region has good logistical location and connections to Mo i Rana in Norway and Vaasa in Finland are increasing international transport in the future. Industry in Västerbotten is upgrading technology in forestry and forest industry. The biggest project for Västerbotten in recent years is the construction of the wind power park in the province. The construction of wind power parks is concentrated on Storuman municipality in the western part of the region. Investment potential in this branch of business was in 2014 about 3.7 billion. Now potential is almost double thanks to new projects in Sorsele and also other parts of Västerbotten

62 The area also has a mining industry and the opening of new mines is also expected in the next few years. The largest and most interesting mining investment project is the Rönnbäcken nickel deposit located in the Storuman municipality. The construction costs for the mine are estimated to increase to around 1.5 million euros. Sweden is traditional mining country, but today the discussion about nature, reindeers and mining has been increasing also in Västerbotten. Biggest obstacle for mining projects implementation start is the low conjuncture of mining industry and low global market prices. Tourism is a very important industry in the region. The Hemavan-Tärnaby downhill skiing centre is located in the western section of the province, mainly in the Storuman Municipality on the Norwegian border. This fell region resort has been constructed continuously over the past few years and it is expected to continue expansion. Winter testing is also present in Västerbotten. Railtest Nordic project in Jörn Västerbotten and Arvidsjaur in Norrbotten is big opening for this branch in the region. Ports of Umeå and Vaasa in Finland have opened cooperation under name of Nordic Logistic Corridor. New transport link is reaching in east to Republic of Karelia in Russian Federation and in west to ports of Mo i Rana and Mosjöen by the Atlantic Ocean in the southern parts of Nordland County in Northern Norway. Main investment projects that start before 2020 Industry investments in the region 70 m Hydro power projects in the region 200 m Wind power projects m Energy transfer network 300 m Railtest Nordic project 100 m Regional road projects 440 m Norrbotniabanan m Skellefteå Culture center and new hotel 85 m Total: m Runner ups - projects that can start if growth is stronger than expected Storuman logistic center 225 m Hemavan Tärnaby expansion 500 m Fäboliden gold mine by Lappland Goldminers AB 200 m Total: 925 m All total: m Norrbotniabanan is reinforcing this connection

63 5. NORTH OF NORWAY Airport Harbour Railway ARCTIC SEA 5.1 Finnmark, Troms, Nordland The Norwegian High North consists of three counties: Finnmark, Troms and Nordland. Population of Finnmark is and the total land area is square kilometres. Most of the population live along the coast. However, the indigenous people (Sami), about 10% of the population - have a special status with its institutions and live mainly in the inland. 5% of the population in Finnmark is of recent foreign origin and mainly from Russia and Finland. The Sami people constitute the majority in Finnmark s interior parts, while the fjord areas have been ethnically mixed for a long time. The Finnic Kven residents of Finnmark are largely descendants of Finnish immigrants who arrived in the area during the 19 th century or before from Finland, suffering from famine and war. norway sweden FINLAND russia 68º-70º North, Troms is a county in North Norway bordering Finnmark to the northeast and Nordland in the southwest. To the south is Norrbotten Län in Sweden and further southeast is a shorter border with Lapland Province in Finland. To the west is the Norwegian Sea (Atlantic Ocean). The entire county is located North of the Arctic Circle. The Gulf Stream running up the cost gives the county a temperate climate. Area is square kilometres. Troms county has a total of around inhabitants. Major cities and municipalities are Tromsø (71 295), Harstad (2640), Lenvik (11 345), Målselv (6 599) and Balsfjord (5 502). More than third of the county s population lives in the City of Tromsø. In Troms, three different cultures meet: Norwegian, Sami and Kven cultures. Approximately 10% of the population is of Sami heredity. Nordland is located along the northwestern coast of the Scandinavian peninsula and extends about 500 km from Nord-Trøndelag to Troms. From the county border in the North to the southern border the distance is about 600 kilometers. At the narrowest the county is only 6 kilometers wide from the coast to the Swedish border. Area is square kilometers

64 Population in Nordland is which of reside in Bodø and in Narvik cities. Nordland has population of about 3000 Sami people, of whom 8% are engaged in reindeer herding. Business in Finnmark The economy of Finnmark grows about just as much as in the country as a whole. As a result of this growth there is a lack of workers, notably in the building industry. Problems are biggest in the western part of the county. Finnmark is a big exporter of seafood, minerals and LNG gas. The value of all export seen under one was according to figures given by The Confederation of Norwegian Enterprise (NHO) of Finnmark 18 milliards of Norwegian crowns in Such figures put Finnmark at the first place in added value pr. county inhabitant. Finnmark is geographically situated close to rich energy resources while prospecting activities for oil and gas in the Barents Sea are being stepped up. Local economic entrepreneurs and scores of subcontractors are involved in this. At the same time work goes on with the development and production of wind and water based power stations. An own company was recently founded with the purpose to build and operate wind and water based power stations in Finnmark in cooperation with local power producing companies and Finnmark Estate Agency which is owner of the ground. Reindeer husbandry is intrinsic to Sámi culture and identity. In Finnmark more than persons are somehow associated with reindeer husbandry. A number that has been stable for a while, although the number of units as well as the number of reindeer has decreased. Finnmark is one of the most tantalizing destinations in Europe. After many years with a big flow of tourists during the summer season, winter tourism has increased after a lot of efforts were made by the tourism industry. But also the competence industry, consisting of many different types of economic activity, is on the increase in Finnmark. Firms busy with this are different from other types of economic activities as their main input factors are not dependent on raw materials, energy, machines or equipment. In such competence based firms the main input factor is competence as such. Living and working far north in our country has a lot of economic advantages. Some of these are aimed at private persons while other measures aim at companies in Finnmark or in the northern part of Troms county. The reason for this is that the Norwegian Parliament in 1990 ratified a special enterprise zone for Finnmark and North Troms. The measures for companies provide good framework conditions for both companies which already exist and for new ones. Most types of companies are exempted from Employers National Insurance Contribution and there is no tax on used electricity. Measures aiming at individuals give inhabitants of Finnmark advantages such as lower income taxes and annual reductions of student loans. This last mentioned measure is often considered the best existing private economy support. Annual reduction of one s student loan is given with up to Norwegian crowns a year. Calculations show that these different support measures taken together have a value of up to Norwegian crowns a year for a 4 persons household. Hammerfest Hammerfest is the host municipality for Statoil s LNG facility (Snøhvit) and ENI s regional and local office and operating organisation for the Goliat field. As a result of the introduction of petroleum activities in the Barents Sea, both national and international suppliers have opened offices in the region, opening the door to a number of new and interesting jobs. Since the final decision was reached to develop Snøhvit and until the time of writing, the region of Hammerfest has gained more than 1,000 new jobs and the town s population has risen by approx. 1,000 persons, with the highest rate of growth identified within the age group of 19 to 39 years

65 Polar Base is the main hub for oil-and gas-related activities in the Barents sea is located in Hammerfest, in Rypefjord, 5 km from Hammerfest centre.the Polarbase area is a powerhouse in Finnmark with varied industry and other mercantile companies. The supply business for the oil and gas industry plus service companies for other businesses are localized in Polar Base. A small part of the area is reserved for the fishing industry, cold storage, fish-processing plants, etc. Kirkenes Kirkenes town has a population (2012) of 3,444. When the neighbouring suburban villages the urban area reaches a total population of almost 8,000 people. The International Barents Secretariat is located in Kirkenes. One of its tasks is to create cross-border cultural, educational and business relations in the Barents Region. There is now substantial optimism in the town as a consequence of the increased petroleum-drilling activity in the Barents Sea. Kirkenes is the Norwegian Gateway to Russia. Border crossing station Storfjord/Borisogelbsk is just outside the town. Closest neighboring towns in Murmansk Region are industrial centers Nikel and Zapoljarnyi. Road to Murmansk is in excellent condition and the distance is only about 150 kilometers. Kirkenes port is the center of business in the Norwegian High North. The port is an important center for passenger traffic and the end point of Hurtigruten: regular, all-year traffic operations between Bergen and Kirkenes. Kirkenes port has ore transport (2,9 million tonnes), fish transport and service transport of oil and gas industry (total volume of other transport is tonnes. Deep-water channel and all-year ice-free transport service, ready-made plans and ongoing investments exist for developing the port for unit load transport and already made 2-3 billion crown investments are the basic factors in the future development plans of Kirkenes port. Business in Troms Principal industries are fishing and fisheries, agriculture, services, tourism and public service industries. The county is rich in resources and the location offers particular advantages, especially in the fields of fisheries and aquaculture, extraction of mineral resources, energy production and tourism. With the University of Tromsø and the colleges in Tromsø and Harstad the county has a considerable number of jobs within education and research particularly in the fields of science and medicine, particularly telemedicine. The Norwegian armed forces is a vital employer in Troms, having the seat of the 6th army division, Bardufoss Air Station, helicopter wings and radar stations in the county. The armed forces employ over 2,000 people in Central Troms. Agriculture In the south of the county there are areas with a long agricultural tradition. Farther north there are more and more instances of farms combining agriculture with other business activities. Much of Norway s goat s cheese is made from the milk of more than 20,000 dairy goats in the county. Traditional agriculture is being re-adjusted as farmers develop supplementary industries, such as tourism and the production of highclass niche products. Fisheries The population of Troms has harvested from the resources of the sea since time immemorial. A lot of the county s trade is still related to the sea. The number of fishermen has been reduced, however, due to larger and more efficient fishing fleets. It is also evident that many consumers are willing to pay more for the highest quality seafood

66 Industry Troms industry is mainly tied to the fishing industry and related industries. Within the field of fisheries and aquaculture, development, research and an increase in competence will be large-scale areas of commitment in years to come. New business The research in Tromsø plays a major role in the development of new business opportunities in the county. Competence and research have provided a breeding ground for development within fields such as marine biotechnology, information and communication technology, earth observation, satellite monitoring and space research. Marine biology is an area of commitment with a huge potential. Business and industry in Troms has gradually become more integrated within the global economy, due to the fact that these new industries are mostly export industries. Consequently, business and industry are ever more dependent on global markets and international business conditions. Transport by land, sea and air is well developed with Tromsø as the central point of the county s transport system. Troms is the main port to the Arctic waters. The multitude of islands and deep fjords presents great communicational challenges. Previously, the boat was the only alternative. Today, bridges and tunnels provide an increasing number of mainland connections. However, the terrain still presents major challenges because of factors such as the volume of snow and danger from landslides. Express boats and small aircraft cut down travel time to a minimum. Fast boats carry goods and passengers up and down the coast. The coastal steamer is also an important means of transport that links many coastal communities together. Hurtigruten line has become internationally very popular tourist attraction. The road network is well developed throughout the county. The county has no railway system. The closest railway station is situated in Narvik. The largest airports, Evenes at Harstad, Bardufoss and Tromsø, connect the county with the rest of Norway and the world beyond. Tromsø airport has a direct service to Murmansk and Archangel in north-west Russia. Tromsø is the biggest city in North Norway with over inhabitants. It is famous tourism center and now also developing to one of the business centers of Norwegian High North offshore activities. Aker Solutions has opened an engineering office in Tromsø in 2012 starting with 50 employees. Company has plans to expand the office up to 300 persons. The office will work with maintenance and modifications projects and field development projects in cooperation with other Aker Solutions offices in Norway. In future Aker Solutions office expansion is included in Nordområdesenter- project in the southern part of the city. Tromsø University, UIT The Arctic University of Norway is the northernmost university of the world. Its location on the edge of the Arctic implies a mission. The Arctic is of increasing global importance. Climate change, the exploitation of Arctic resources and environmental threats are topics of great public concern, and which the University of Tromsø takes special interest in. Harstad is another town in Troms county which is developing as a Norwegian High North business center. Statoil has decided to locate the Barents Sea operations center in the town which has about inhabitants. It s location is about 300 km south from Tromsø. Town is also planning to build a new base for offshore business called Nordlysparken within next five years. Business in Nordland Nordland is one of the country s largest export counties within raw materials and industry. Nordland is also the economic hub of Northern Norway. The industrial area of Helgeland concentrated in particular around Mosjøen and Mo is the main such area north of Dovre and the second biggest in Norway. The processing industries at Mo industrial park have a

67 combined annual turnover of around 3 billion Norwegian kroner. In total, Nordland s processing industry encompasses close to 20 businesses. In 2004 these firms exported goods to a value of around 9 billion kroner. The trade and industry in Nordland consist of metallurgical, cement and fertiliser industry, fisheries, fish-farming, agriculture, forestry and timber, services, tourism, assorted light industry and small shipyards. The sea also provides a living for the people of the region. Nordland has the country s largest fishing industry with more than 3,000 active fishermen (2006). Large quantities of fish are brought ashore with an export value of close to four billion Norwegian kroner. The enormous growth in fish farming has been a major addition to the trade in local natural resources. Nordland is the country s second biggest fish-farming region. City of Narvik in the northern part of Nordland County is one of the most important transport hubs in the High North. Iron ore products from LKAB are transported by train from Kiruna to Narvik and shipped via LKAB s own port facilities at Narvik. In the port all handling of pellets is done indoor in covered silos and ware houses. Nordland is Norway s largest producer and supplier of electrical power. The development of the Svartisen hydroelectric facility in the 1980s and 90s was at that time the biggest in the country. The quantity of available energy attracted several major industries to the area. Elkem and Hydro all have large production facilities in Nordland. Oil and gas have raised great expectations in Nordland. Reserves have been found in several fields that are still unopened to development. The oil industry brings together considerable knowledge and expertise. Nordland is connected to international markets by a network of air, rail, and ferries. Bodø is a communications hub for aeroplanes, trains, buses, the coastal express boat and fast-going ferries. Nordlanders are a people of ferries, and the famous Hurtigruten is also based in Nordland. Over the past few decades big investments have been made to improve infrastructure within the county. New roads and bridges bring people and the various parts of the county ever closer together. Twelve airports make Nordland still more accessible for those who live and work here. The new logistics structure also includes complete moderni zation of the Narvik ore port (project SILA), which was complet ed in the autumn of This includes construction of a whole new storage and discharging facility with 11 underground silos in Narvik. The Narvik ore port is free of ice all year round. In 2012 LKAB shipped about 18,6 Mt from the port in Narvik

68 New mining company Northland Resources is also shipping iron ore from the Narvik Port. Company uses already existing roads (150 km) and railway (226 km) from Kaunisvaara to the Port of Narvik. At the ice free Port of Narvik the Iron Ore Concentrate will be reloaded on Cape Size Vessels. On December 1, 2011 Northland received construction permit for a new iron ore terminal in Narvik, Norway. The terminal, which is expected to efficiently load vessels of up to 180,000 tonnes, will consist of a quay, an unloading facility for the railcars, a storage building and a ship loader. The first shipment from Port of Narvik took part 25 th of February (Sources: finnmark.no, Hammerfest kommune, Kirkenes näringshan) North of Norway investment potential Industry Aluminium smelter and plant, Hammerfest m DRI steel mill, Hammerfest m Gas power plant, Hammerfest 300 m Carbon black plant, Hammerfest 150 m Fishing industry investments 100 m Total: m Mining industry Sydvaranger Gruve AS, Kirkenes, iron mine expansion 300 m Nussir AS, Kvalsund, copper mine 350 m Arctic Gold, Bidjovaggen gold-copper mine reopening 70 m Total: 720 m Oil and gas Statoil & Co, Johan Castberg oil field m Statoil & Co, Veidnes oil terminal m Statoil, Aasta Hansteen gas field m Statoil & ENI Norge, Skarv, Skuld, Goliat-oil fields m Lundin Petroleum, Alta oil field m Lundin Petroleum, Gotha oil field m Kirkenes Oil terminal 300 m Sandnessjön base, Nordland 150 m Bröndre base, Nordland 150 m Nordlys project, Harstad 120 m Polarbase, Hammerfest 30 m Total: m Hydro power Finnmarken mountain plants and small power m Nordland and Troms projects m Total: m Wind power Statkraft Development AS m Varanger Kraft AS 700 m Statoil ASA Finnmark 850 m Norsk Miljökraft AS m Vindkraft Nord AS 350 m Nordkraft Vind AS 200 m Finnmark Kraft AS m Fred Olsen Renewables AS m Troms Kraft AS m Nord-Norsk Vindkraft AS m Nord-Norsk Havkraft AS m Total: m

69 Energy transfer networks Nordland network 350 m Ofoten-Hammerfest network 400 m Finnmarken network 600 m Statnett, other network projects m Total: m Tourism Målselv Fjellandsby ski center 500 m Other hotel and resort projects 300 m Total: 800 m Transport infrastructure Regional road projects 815 m Narvik port expansion m Other port and terminal projects 285 m Gimsöy airport 225 m Helgeland airport 225 m Grötnes airport, Hammerfest 300 m Narvik-Kiruna railway, second rail, Norwegian side m Arctic Railway, Norwegian side m Total: m Development of the region Norway is still number one area in European High North regarding investment plans and projects. Total costs of planned investments is more than 75 bln. That is about 20 billion more than last year. In spite of low oil prices, exploration is continuing with old speed in the Barents sea. Energy sector is constantly on the top of the investments list including offshore and onshore, wind power and hydro power. The fjords of the region are ideal for wind power, and hydro power, which is integral to the energy production framework for the entire nation, utilises the vast water resources of mountain lakes. At present, the electricity transmission network of northern Norway does not facilitate use of energy produced today and in the future in its own region. Consequently, the construction of new transmission networks is currently being planned for all three counties. Energy transfer investment potential is today clearly over 2 billion. Public investments Regional hospital and health care projects m North of Norway Total: M

70 There will also be substantial investments into the traffic network, as the terrain on North of Norway is extremely challenging. The only form of transport that is problem-free is seaborne transport. The internal freight transport in the area is primarily handled by road. One railway project is also proceeding in Northern Norway. Swedish-Norwegian working group recommended in its report to build second railtrack to Kiruna-Narvik railway. This is necessary due to the soon completed huge expansion project of LKAB. New production and increased transport requires also big, over one billion expansion project in the port of Narvik. The official national railroad network only runs as far as Bodø in the north, the administrative centre of Nordland County, and the Swedish rail network travels along the Kiruna ore haulage track to Narvik, from which freight has to be transported by road. Flight connections are vital for passenger traffic. The State is significantly subsidising regional flight connections. Norwegian authorities are also interested in cooperation with Finland in some road projects. If cargo transport is continuing to grow through Sweden to Kiruna and Narvik, some of the cargo could be unloaded in Kiruna and transported by car through Lapland to Tromsö, Alta, Hammerfest and Kirkenes. The previously closed iron mine in Kirkenes was reopened in 2009 and has been working fine. Plans for expansion were evaluated and expected. Now the situation has totally changed. Iron ore market prices are at the time very slow and the mining company in Kirkenes is in serious economic problems. Employees of the mine have reduced even their salaries to avoid the company to drift to total bankruptcy. The opening of a large copper mine is being planned for Kvalsund, close to Hammerfest, and at the same time preparations are being made for reopening of the former Finnish-owned Bidjovagge gold-copper mine near Kautokeino. The environmental impacts of the mining industry have also hit the headlines in North Norway, and the Sámi have questioned the opening of mines. Also the low price level of raw materials in the world market have been postponing the implementation of these projects. Bidjovagge seems to be postponed at least for a decade. Nussir AS which owns Kvalsund project is a very small company and needs to find major investor before the mine could be opened. Tourism in Norway has experienced a boom. The Hurtigruten cruises along Norway s coastline have been particularly popular. The route is also significant for the logistics for its own region and the increase in foreign passengers has caused a few problems. North Norway is also popular destination for international cruise business. Tourist resorts are also being built. Målselv municipality close to the City of Tromsø has been constructing a Norwegian version of a fell resort with its own Santa Claus Land. This project has not been successful, because the main company of the project was bankrupted in Anyhow the project is continuing with a little bit lower ambition level. City of Tromsø itself is investing a lot to tourism business. New hotels are reconstructed and planned all the time. Oil and gas projects have been the flagships of North Norway investment plans. In March 2014 ENI Norge is still finalizing the Goliat project, which has delayed from the original plan. The floating platform should have arrived in summer 2014 to Polar Base in Hammerfest to be finalized. Now this is expected to happen in summer of 2015 so two years later that was planned. Statoil announced in 2012 that two enormous projects will be implemented. The first to commence is the construction of the Aasta Hansteen gas field, located in the Norwegian Sea off the coast of Nordland. Gas is conducted southwards via a pipeline and further on to the network linking to Europe. This project is continuing as planned. The other project which should have been implemented is Skrugard/ Havis oil field, which by scale should be nearly three times the size of the Goliat project. Statoil published details on the construction of the future field s terminal for Veidnes, north of Honningsvåg and near the North Cape. A pipeline stretching 280 kilometres was planned to run from the field to the shore, where should be built big terminal with estimated to cost around million euros. This enormous oilfield was renamed to

71 Johan Castberg. Some months later in June 2013 Statoil announced to postpone this project. According to the announcement Statoil has continued to mature the resource base and development plans for the project. There are still uncertainties related to the resource estimate and investment level. Company named also decision of the Norwegian government to reduce uplift in the petroleum tax system, which reduces the attractiveness of future projects, particularly marginal fields and fields which require new infrastructure. This is why it is necessary to review the Johan Castberg project. This announcement happened only a few months before the parliament election in Norway. Some specialists assumed that Statoil tried to push the Government and postponing was a political stunt. Success of the Government was very bad in the parliament election in September New government with winning parties started in October All the time everyone has been expecting decision from the new government to abolish the harmful legislative amendment that postponed Johan Castberg project. Nothing happened and the discussion continued as long as Statoil announced to re-evaluate Johan Castberg project in From Statoil point of view the biggest problem has been that the possible pipeline from oilfield to Veidnes in Honningsvåg municipality is not anymore profitable. Statoil counted that government gives same size subsidies to pipeline like in Snow white project in the beginning of the 2000s. Without this subsidy the whole plan is probably not profitable. Taking the oil from Johan Castberg directly from the platform or platforms requires new plans and extra costs. With current low oil prices profitability seems to be even more questionable than ever. Profitability of oil wells and gas in Barents Sea has become controversial already after the success of shale gas and oil in the USA. Shtokmanovskoje is not realistic maybe for decades and the situation in North Norway begins to have resemblance with the Shtokman project if nothing happens and if the oil price stays long time at present low level. Representatives of Statoil have not given any dates in recent Arctic conferences when the planned projects like Johan Castberg could be implemented. Statoil directors confirm only that the company has come to the Arctic and they are going to stay there the next 40 years. If the Norwegian offshore projects are postponed long over 2020 the development in the region is going to slow down because they are the backbone of expected development programs like some made by SINTEF research institute has issued. In a preliminary strategy is described on how North Norway can be industrialised based on Barents Sea gas and raw materials from neighboring regions. If projects are not implemented the strategy is postponed to 2030 or even behind. The significance of Hammerfest as an offshore centre has not suffered because of the aforementioned decisions. ENI Norge established its own northern centre in the city and Aker Solutions continues to develop its service base activities in the city, as well as investing into the development of underwater technologies. Snow white gas field is still producing gas to Melköya LNG-plant. Probably Statoil is going to invest in Snow white to increase gas production. Pipeline is there ready and does not need any investments. Other town that continues to grow is Kirkenes. Statoil has entered into agreement with Rosneft for further exploration of the so-called border agreement area. For the first time, this will shift the focus of offshore projects on a practical level in the direction of East Finnmark. Kirkenes is here natural base for actions and the Kirkenes Port has enormous development possibilities. Ukraine crisis has had impact on this cooperation. Norway was more than 20 years leading country in the business of Murmansk region. Now it looks like that Norway is withdrawing from Kola Peninsula. Natural explanation for this decreasing national interest was the de facto closing of Shtokmanovskoje Gas field project. Statoil was a stockholder in Shtokman Development AG together with Gazprom and Total. Ukraine crisis and decision of Norway to join to EU sanctions has been speeding this process. DnB bank of Norway owned former Montshe

72 bank in Murmansk. DnB pulled out from Murmansk earlier in 2014 and Sparebank Nord Norge followed with big losses in January Norwegian business development organisation SIVA is also closing business centers in Murmansk. From Finnish point of view this is not welcome development. Norway and Norwegian companies are needed as partners in Murmansk Region. Norway is a promised land for strategies and major development plans. With good financing possibilities most of the strategies can also be implemented. In November 2015 Northern Norway gathered to Tromsø to participate to big conference named Agenda Nord Norge. The result of this conference was published in the beginning of 2015 by the name Nord-Norge i verdensklasse- en mulighetsstudie. It is a very good report regarding the future development of Northern Norway. It has also an estimation about the investment potential of the region. With huge housing and apartment building programs the potential rises up to billion. Up to 2022 this housing investment is about 11.7 billion. Using the same branches of business evaluation as in this yearbook the investment potential is following: Oil and gas m Transport infrastructure m Electric power m Public investments total m Trade m Industry 70 m Fishing and fish industry 76 m In total all of this: m Main investment projects that start before 2020 Fishing industry investments 100 m Aasta Hansteen gasfield m North Norway offshore bases with Nordlys project 450 m Regional hydro power m Regional wind power m Energy transfer networks m Some hotel and tourism center projects 300 m Regional road projects 815 m Narvik port expansion m Kiruna-Narvik railroad second track m Regional hospital and health care projects m Total: m Runner ups - projects that can start if growth is stronger than expected Kvalsund copper mine by Nussir AS 350 m Johan Castberg oil field m Grötnes airport in Hammerfest 300 m Total: m All total: m This report and evaluation is worth of deeper analysis. There are some differences compared with Norwegian and Finnish point of view and they can be seen below

73 6. NORTHWEST RUSSIA Airport Harbour Railway ARCTIC SEA 6.1 Murmansk Region Murmansk Region is situated in the North-West of European Russia and it is one of the strategic areas of the country in the North-Western Federal District. The Region borders with the Republic of Karelia in the southwest and with Finland and Norway in the west and north-west. The Murmansk Region is one of the few Russian regions to share the border with the European Union and NATO countries. The strategic importance of the Murmansk Region is based on enormous raw material resources and also military political importance. The Region is the base for Northern Navy ensuring defence capacity of the northern frontier. Headquarters of the Navy is located in Severomorsk about 20 km north of Murmansk. Murmansk port is open all year round and it is the biggest Russian port situated to the north of the Arctic Circle. The products of Kola Peninsula mining industry is shipped to the world market from Murmansk. Nuclear icebreakers have ensured year-round Arctic navigation. norway sweden FINLAND russia The Region occupies an important geopolitical position in relation to regions with a developed industry connected to it with land, sea and air routes. The location close to the border, significant exporting capabilities and available transport links establish good conditions for enhanced cooperation with other countries. The Murmansk Region is an active member of the international Barents Euro-Arctic cooperation. As of early 2012, the Region includes 12 urban okrugs (Murmansk is the regional capital), 5 municipal districts and 23 settlements, 13 of them urban and 10 of them rural. Population of the Region has decreased in 20 years from 1.2 million inhabitants to less than inhabitants. People have moved back to their home regions or to cities like St. Petersburg and Moscow. The population density is 5.4 / sq. km. Population has concentrated in cities where live almost 93% of the inhabitants. Rural areas have only 7% of

74 population. Nationalities are (2002): Russians are the majority in Murmansk Region with 85.%, Ukrainians 6.4% and other nationalities 8.4% are minority. Sami people are living in Lovozero area and total population of Sami is less than 2000 people. The total amount of inhabitants in the Murmansk Region was in The biggest towns are Murmansk ( inhabitants), Apatity ( inhabitants), Severomorsk ( inhabitants) and Monchegorsk ( inhabitants). Business community Mining industry is the backbone of Kola Peninsula economy. In the Murmansk Region, there are over 60 large deposits of various raw minerals where 30 types of useful minerals are extracted. Most deposits of the minerals are of national significance, and of international significance as far as apatite, nepheline and cyanide ores and rare metals are concerned. The economic specialisation of the region includes extraction and processing of ferrous and nonferrous metal ores, industrial production of copper, nickel, cobalt, semi-fabricated precious metals products, primary aluminium and apatite concentrate that is a raw product for phosphate fertilisers. The share of the Kola land of the total Russian production is 45% in nickel, 11 % iron-ore concentrate and 7% of refined copper. The Region is the only producer of apatite, nepheline and baddeleyite concentrates (100% are produced in the Murmansk Region). Main industrial companies JSC Kolskaya GMK is a single complex for extraction of sulphide copper and JSC ores and production of precious metals. Company is a division of Norilsk Nickel located in the Murmansk Region. Most important mines of Kola GMK are in Zapoljarnyi, Pechenga area and smelters in Nikel and in Monchegorsk which is the headquarters of the company. JSC Apatit extracts and processes apatite and nepheline ores of the Khibiny deposits which are part of the largest and richest deposits in the world as well as the basis of phosphorous raw materials in Russia. JSC Apatit is part of Fosagro company. JSC SZFK (North West Phosphorous Company) is new industrial company in the Murmansk Region. It opened the first mine in Rutshij Olenij near the town of Kirovsk two years ago. The company belongs to Akron group JSC Kovdorsky GOK develops the Kovdor deposit and produces iron-ore, apatite and baddeleyite concentrates. It is part of EuroChem company. Kovdor is near Finnish border and the company has been interested about the Sokli mine deposit on Finnish side only 54 km from the town of Kovdor. JSC Olkon extracts banded iron formations and sells high-quality ironore concentrate. It is a part of Severstal company which is the second biggest steel company in the world. KAZ-RUSAL, a branch of United Company RUSAL, the biggest aluminium company in the world. KAZ smelts aluminium from aluminium oxide delivered there. The smelter and the plant are in the town of Kandalaksha. The major production facilities were built decades ago, and the enterprises currently aim at deep-level mining and underground mineral extraction which requires upgrading and expanding the mining industrial infrastructure. Change of policy in investment strategies Shtokmanovskoje gas field project was prioritized in every development strategy of the Murmansk Region for over 10 years. In 2013 the implementation of the vast project seemed to been postponed to 2030 or later. This influenced to the policy of Regional Administration which decided to support the development of existing industrial companies

75 Investment projects for replacement of decreasing yield at the existing deposits and for new regional production types are being currently implemented in the Murmansk Region. These are the projects of building mining and processing plants on the basis of the Oleniy Ruchei apatite and nepheline ore deposits, the Fyodorova Tundra platinoid deposits and the Sopcheogorskoye chromite deposit. The construction project for the Oleniy Ruchei mining and processing plant is prioritised in the North-Western Federal District. A distinctive feature of the new mining and processing plant will be an integrated extraction of useful component from the ore. The overall investment provides for RUB 30 bln and 3000 jobs. The capacity of the facility is one million tonnes of apatite concentrate a year after commissioning the 1st stage of the plant that took place in July last year and increasing the capacity of the processing factory to 2 m tonnes after commissioning the 2nd stage of the plant. State-of-the-art energy-saving materials are used on the compound of the mining-and-processing plant which makes it possible to improve energy/ output ratio in the difficult conditions of the far north. In order to reduce adverse environmental impacts, modern waterworks have been built: the enterprise will use a closed water circulation technology to protect bodies of water from contamination. A storage facility for tailings using eco-friendly state-of-the-art pollution control is under construction. Over 60 contractors from various regions of the country are involved in the construction. The project is being implemented within a public-private partnership including investment in social projects for reconstruction of the school, culture centre and residential buildings in the Koashva settlement in the amount of RUB 30 m. Coordination board on development of investment and innovative activities in the Murmansk region (established on ) has assigned a strategic and priority status for the investment project «Construction of the ore-dressing and processing enterprise on the base of apatitenepheline deposit «Oleniy ruchey» and adopted a decision to provide state measures for the project implementation. On the 18th of November 2013 Governor of the Murmansk region and CJSC «North-West phosphorus company» have signed agreement on state support of the investment activity on the territory of the Murmansk region during the implementation of the strategy priority project «Construction of the ore-dressing and processing enterprise on the base of apatite-nepheline deposit «Oleniy ruchey». State support measures concern the tax concession on property, lowered rate on income tax during 5 years. Industrial development of the apatite and stafellite ore deposit to replace the depleting amount of apatite concentrate is a priority task of the Kovdor mining and processing plant modernisation. The project provides for reconstruction of the existing JSC Kovdorsky GOK industrial facilities on the basis of the complex for processing of technological deposit sands and the apatite and baddeleyite factory of the processing complex to build a new processing complex for apatite and stafellite ores. The project implementation will ensure increased amount of iron-ore, apatite and baddeleyite concentrate production by more than 900 thousand tonnes a year. The amount of processed ores from the main open mine will increase by 2 m tonnes

76 On the 18 th of November 2013 Governor of the Murmansk region and CJSC «North-West phosphorus company» have signed agreements on state support of the investment activity on the territory of the Murmansk region during the implementation of the strategy priority projects «Modernization of production capacity of the JSC «Kovdorsky GOK»» and «Apatite-staffel ore-dressing complex». State support measures concern the tax concession on property, lowered rate on income tax during 3 years. Fishing industry Fishery is one of the traditional economic sectors of the Murmansk Region and plays an important part in the socio economic specialisation of the region. Murmansk Region fishermen account for 16% of the overall Russian catch. About 90% of fish is processed immediately at sea. Tourism There are 100 active tourism companies in the Murmansk region, 34 of the being orientated at domestic tourism. The main attractions of the Kola Peninsula are sport fishing, alpine skiing and cruises to the North Pole. More than 20 companies are active in organising sport and amateur fishing. There are about a hundred of bodies of water allocated for use by those companies. 78 of these bodies of water are Atlantic salmon rivers. Atlantic salmon fishing traditionally takes place in the most popular rivers: Ponoi, Varzina, Rynda, Karlovka, Yokanga, Varzuga, Umba and Kola. An increasing number of smaller salmon rivers have become available for sport and amateur fishing. Wild Atlantic salmon has become a sort of tourist brand name of the Murmansk Region. The sector is based upon the fisheries fleet and the onshore complex that includes port facilities, onshore fish-processing enterprises and shipyard companies. Total of 141 organisations employing about 7.4 thousand people are active in fishing, fish farming, processing and tinning fish products and seafood in the Murmansk Region. 105 organisations are active in industrial and coastal fishing. About 600 thousand tonnes of aquatic bioresources are harvested each year. The annual amount of fish production is 500 thousand tonnes, 60% of the production going to the Russian domestic market. At the end of 2012, the Murmansk Region took the first place of all Russian federal entities in the amount of shipped fish production over RUB 30 bn. The Strategy of Murmansk Region Socioeconomic Development until 2025 prioritises a comprehensive upgrade of fisheries and aquaculture sector development

77 The town of Kirovsk is a centre for alpine skiing and other active outdoor tourism. There are three alpine skiing complexes in the town. The Bolshoi Vudyavr complex is the highest not only in the Khibiny Mountains but also for the whole north-western Russia. The elevation difference is 550 metres. A distinctive feature of the resort is its wide European-standard FIS-certified pistes suitable for both professional alpine skiers and beginners. The Region is the only place where it is possible to go to the North Pole aboard a nuclear icebreaker. Two-week tours are very popular with enthusiasts of exotic tourism worldwide. The most popular routes include tours to Svalbard and Franz Josef Land where one can see walruses, seals and whales, visit picturesque harbours with bird colonies and where polar bears sometimes come to the icebreaker surrounded with ice. Transport Murmansk is the only port in European Russia with an open access to major oceanic routes. Port of Murmansk has direct access to the Northern Sea Route, that links the Atlantic to the Pacific through the arctic waters and provides access to natural resources of the Far North, Siberia and the Far East. The Murmansk Region located at the junction of transnational routes and having reliable sea, railway, road and air links with industrial Russian regions can surely be called a northern gateway of Russia. There are three seaports in the Murmansk Region. The main port of the Region is the Murmansk Port located in the Kola Bay. It is also the core port of the Arctic Basin as far as transporting goods to the Far North and far abroad is concerned. The necessary infrastructure for receiving, servicing and repairing vessels is in place in the Murmansk port. It is a base for Russian shipping companies, the emergency and rescue fleet and the unique fleet of nuclear icebreakers which arrange piloting ships along the routes of the Northern Sea Route. The Murmansk seaport is one of the ten biggest Russian ports in the amount of cargo transhipment. It is the only port in the country capable of receiving vessels of up to 300 thousand tonnes deadweight any time of the year due to non-freezing deep water area of the Kola inlet. Cargoes going through the Murmansk port include general cargoes, liquid cargoes as well as containers, fish and fish products. The total cargo turnover is above 25 m tonnes a year. Coal prevails in the overall amount of transhipped goods. The coal is handled in terminals of JSC Murmansk Commercial Seaport, the biggest stevedore company of the Murmansk Region. The company also successfully handles apatite and iron-ore concentrates, non-ferrous metals, manganese ore, containers and other cargoes

78 Two ports Kandalaksha and Vitino are located in the southern part of the Kola Peninsula in the water area of the Kandalaksha Bay. The Kandalaksha port specialises in transhipment of bulk and general cargoes, and the Vitino port is orientated at transhipment of oil products. The total cargo turnover of the Kandalaksha Bay ports is over 4.5 m tonnes. The Murmansk Region is of significant interest for tourists from around the globe. The vessels of the FSUE Atomflot icebreakers fleet provide tourist cruises to the North Pole, islands and archipelagos of the Central Arctic. The Arctic Harbour project is being implemented in the framework of preparation to the 100-year anniversary of Murmansk in order to build the needed infrastructure for receiving and servicing cruise ship and ferries, create a regular ferry link with Norway and increase the number of foreign cruise vessels entering the port. Development the regional port infrastructure is closely connected with development of the railway transport infrastructure. The general railway transport is a leading element of the regional transport system. It takes up a considerable share of the cargo and passenger transport market. Total length of railways in the Murmansk region is about 870 kilometres. A reconstruction of passenger transport infrastructure facilities and creation of a single transfer complex uniting the sea, railway and bus passenger terminals are planned to be carried out in Murmansk in the future. There are two operational airports on the Kola Peninsula providing services for aircraft and passengers and handling of luggage, post and cargoes: in Murmansk and Apatity. There are also landing grounds for local airlines. Up to 550 thousand passengers pass through the Murmansk Airport each year. The reconstruction of the runway, apron and lighting has been finalised by now. Reconstruction of the passenger terminal, cargo terminal and engineering networks of the maintenance zone is planned finalised by Murmansk Transport Hub The project of Complex Development of the Murmansk Transport Hub is the main transport infrastructure development project in the region.the project is being implemented within the sub-programme Development of Transport Services Export of the federal targeted programme Development of The Russian Transport System ( ) with the aim of increasing competitiveness and further development of the regional transport infrastructure. In the project implementation, a year-round marine hub will be created for processing container liquid cargoes and transhipment of coal and mineral fertilisers. It will be integrated into the North South international transport corridor. The project provides for development of the Kola inlet water area, the sea, rail and road transport infrastructure development as well as logistics and warehouse infrastructure development. In the framework of the new project, it is planned to build a new branch line and a cargo terminal on the western shore of the Kola Bay, reconstruct the existing coal terminal and build a container terminal, a logistics centre and a distribution zone on the eastern shore of the Kola Bay. The project is being implemented in a private-public partnership, the total funding being over RUB 130 bn. The state funds the construction of an auxiliary utility infrastructure for investment projects to be implemented by private investors. The project, when implemented, will increase the Murmansk port cargo turnover to 70 m tonnes. The Northern Sea Route underlies the Arctic transport system of Russia and the importance of Murmansk Transport Hub. It ensures economic integration of the Arctic territories both with developed areas of Russia and with other countries, gives access to major petroleum deposits and aquatic bioresources of the Arctic zone and to other strategic raw materials

79 The presence of a powerful nuclear icebreakers fleet predetermines the use of the Northern Sea Route for transnational transit between the countries of North-West Europe and the Pacific areas (Japan, China, the USA and Canada) and its integration into the global transport system as an independent Eurasian transport corridor with year-round transport of export cargoes. FSUE Atomflot where an integrated icebreaker technology complex for the Russian federation civil nuclear fleet is based provides icebreaker pilotage for vessels along the Northern Sea Route, for exploration, scientific and research activities in the arctic seas and for emergency and rescue operations in the ice. (Source: Murmansk Regional Government, Ministry of Economic Development of the Murmansk Region) Future development of the Murmansk Region Murmansk Regional Government has published a new forecast of the regional development to According to the forecast for the period up to 2030 is projected to create new kinds of economic (industrial) activities, such as mining and quarrying of energy resources and oil refining; new form x s products: LPG, petroleum products, processing of chromite ore, platinum group metal ores; creation of a modern large transport and logistics center, including modernization of existing and creation of new port facilities to initiate the operation I special port economic zone, construction refinery and a plant to liquefy natural gas. Main investments of the region are following: commissioning of the ore processing plant on the basis of deposits of apatite- nepheline ores Deer creek (Rutshij Olenij, JSC SZFK); implementation of integrated development of the Murmansk Transport Hub; creating e transport hub based on train, bus arrangement with adjacent areas, airport network, road approaches to Marinas, building on ore processing plant based on deposits of platinum group metals Fedorova-Tundra ; building on ore processing plant on the basis of chromite deposits Sopcheozerskoe ; building and on the modernization of the mining and mineral processing I production of vermiculite, phlogopite and pegmatite in Kovdor; beginning of the active phase of implementation of integrated mastering I Shtokman field, including the construction of a liquefied natural gas plant and pipeline; building on the Kola Nuclear Power Plant - 2; building of the refinery on the Kola Peninsula; construction of wind farms; building and reconstruction of power grid energy system I Murmansk region (the National Rate (modernization and construction of boilers in the Murmansk region); building on North PES in Long Bay of the Barents Sea, the substation North and the combined heat and power in Kovdor; building on Ships nuclear icebreaker fleet implementation of the project and the Russian Lapland. For transportation of goods for export, including production and refinery plant to liquefy natural gas will be used mainly by sea. Provides for the formation of active open space for international exchanges, tourism development, the use of transit potential of the Northern Sea Route, which will contribute to upgrade the nuclear icebreaker fleet

80 The forecast includes also the Shtokman Gas field which seems to be postponed up to There is also a plan to renew the power grid system of Murmansk Region. Especially the city of Murmansk has been suffering of the limited power transfer from Kola Nuclear Power Plant. Cross regional product is going to increase from the level of October 2013 totally 2.1 times higher. GRP growth will be achieved mainly the growth of the economy conditioned m positive dynamics of investment and consumer demand, preserving state support areas of social and economic development. Industrial production is forecasted to grow in the same time frame totally 3.2 times higher. The mining industry is leading this production growth. Implementation of major investment projects aimed at creating new jobs, diversify the economy, defining the growth of entrepreneurial activity, the development of social and infrastructure will create the foundation for the region to attract migrant workers, to keep out-migration of working age population and, accordingly, reduce the rate of decline in population of the region Murmansk Region investment potential Industry CJSC Ruski Losos, fish arming plant 110 m Norilsk Nickel, Montshegorsk, nickel refinery center m Norilsk Nickel, Montshegorsk, cobalt plant technology 50 m Norilsk Nickel, Montshegorsk, mini metallurgigal plant 20 m Montshegorsk Industrial Park 150 m Total: m Mining industry JSC Kovdorsky GOK, mining and processing technology 190 m OAO Pana/Barrick Gold, Fedorova Tundra, platinium mine m JSC Akron/SZFK, Olenyi ruchej, Kirovsk, mine expansion 600 m JSC Akron/SZFK, Kirovsk, processing plant m Norilsk Nickel, Grmyakha titanium mine 600 m Norilsk Nickel, Vuruchaivench copper-nickel mine 600 m Norilsk Nickel, Sopcheozerskojen chromium mine 500 m Arcmineral Service MC, Afrikanda titanium project 200 m Sevredmet, Revda, mining technology 45 m Total: m Oil and gas CJSC Sintez Petroleum, Lavna Murmansk, oil refinery 800 m OAO NK Rosneft, Rosljakovo, shipyard, terminal, base 400 m Total: m Hydro power JSC Leningradskaja GAES/JSC Rusgidro, todal power plant 160 m TGK-1, Kola power plants modernization 850 m Total: m Wind power Windlife-Energy BV, Tumanny wind park 320 m Nuclear power Rosatom, KAES-2, Polarnye Zori, 2 new reactors m

81 Tourism Kirovsk and Polarnye Zori winter sport centers 20 m Kirovsk gondol lift 20 m Vudjavrchorri winter sport center 26 m Lovtsori skiing slope 20 m Russian Lapland, Revda 30 m Apatity and Nikel hotel repair 6 m Other projects 19 m Total: 141 m Transport infrastructure Murmansk Transport Hub m Murmansk railway and bus stations 75 m Murmansk port cruising terminal 125 m KIP/MMPP Liinahamari port project m Other projects 30 m Total: m Public investments Murmansk central heating plant m Nikel, Montshegorsk ja Zapoljarnyi heating centers 60 m Apatiitti-Kirovsk heating pipe 75 m Vascular disease hospital Murmansk 31 m Murmansk hospital for children 110 m Culture and sport 12 m Water supply 38 m Waste management 30 m Energy 13 m Polarnye Zori greenhouse center 25 m Other projects 18 m Total: 1612 m Development of the region Everything was looking nice with the future expectations in Murmansk region still a little bit than one year ago. Escalation of Ukraine crisis has made the future quite uncertain regarding all strategies and development plans. Sanctions and counter sanctions have changed the volume of business. Even the start of new European union cross border program ENI seems to be uncertain. According to the representatives of EU commision the start could happen earliest in the beginning of 2017 but if the sanction discussion returns to these programs the implementation can be even cancelled for political reasons. Finland stopped this discussion in 2014 and opinion is still the same. All options, however, must be evaluated in the situation like we have today in Europe. Murmansk Region has been during the last 30 years an area of giant investment plans and visions. Mikhail Gorbachev himself gave speed in October 1987 to all visions in his speech in the city of Murmansk. After that Soviet Union has collapsed and having suffered from negative migration for a couple of decades, the Murmansk region has gradually managed to balance its economy and the wellbeing of the area has improved. The Kola Peninsula is strongly dependent on two factors: the non-ferrous metallurgy industry of the region and Military Forces of Russian Federation. Metallurgy industry due to the global process of raw materials, has fared well over recent years. The salary levels of people living in the region have clearly increased in industry as well as with civil servants and soldiers. Also military section has had revival in the Region after hard times in the first decade after the collapse of the Soviet Union. Salaries have been raised according to federal policies. A raise in living standards can clearly be noticed in Lapland due to the dramatic increase in the bor- Murmansk Region total: m

82 der crossings by Russians at the Raja-Jooseppi and Salla border crossing points. The figures for the border crossings for 2013 were expected to have increased by over fifty percent from approximately two hundred thousand to somewhere between 300, ,000. On the national level, the number of border crossings is still minimal, but the increase from the just over one hundred thousand visitors in the early 2000s has been enormous. Low value of Russian rouble has turned these numbers down with about 20% in 2014 and from the statistics of the first months of 2015 this is further continuing. Visa freedom belonged to the great expectations in the European High North in spite of all political obstacles risen during past one year. Negotiations between the EU and Russian Federation proceeded so well that year 2018 was mentioned as the time when passengers don t any more need visas in travelling between the Schengen area and Russian Federation. This would have meant explosion in the border crossings also in the High North and would have stimulated also cross border business. European union has decided to stop the visa freedom talks with Russia as one of the sanctions if Russia is not withdrawing from its political positions in Ukraine. This has brought much tension in all relations with the EU and Russia. The damage is not yet definitive, but the real solutions in solving the Ukraine crisis must be found soon. Arctic cooperation has so far been outside the current political crisis. In European High North the growth of tension is a fact. Russian Federation is increasing military power in Kola Peninsula. The military significance of Arctic regions was mentioned in the new Arctic Strategy of Russia in February 2013 but the speed has been growing within last months. Kola Peninsula has been ad is still one of the most important military areas in Russian Federation. Northern fleet, nuclear submarines, arctic brigade in Pechenga and air force in Monchegorsk belong to the backbone of Russian Army. Old military base in Alakurtti about 65 km from Finnish border has been opened again. First news told that a radio intelligence unit with about 3000 soldiers with their families are coming to this small border town. Today a motorized arctic brigade is moving in with about 7000 soldiers and with not so many family members. Old Alakurtti airport is rebuilt to the total length of 4500 meters. It is still unknown if town of Alakurtti is still open for foreign visitors. Salla-Kandalaksha road is finalized later this year. Road passes Alakurtti with some kilometers so the base is not disturbing traffic. Situation on Norwegian Russian border could be different. Pechenga and Sputnik bases are very important for Russian Army. During Soviet time road from Nikel to Murmansk was closed for foreign visitors. Even a new road was built for the needs of Norwegian border crossings from Nikel to Rajajooseppi-Lotta-Murmansk road. Hopefully this is not happening this time. The uncertainty regarding the fate of the Shtokman gas field has also put pressures on the Murmansk regional administration. Project is postponed, but anyhow Barents Sea is not completely forgotten. Gazprom finally opened the Prirazlomnye oil field to production. Rosneft has many agreements for cooperation in the Barents Sea. First with Statoil about the exploration of the new border area between the two nations. Rosneft has also agreed cooperation with the Italian ENI for working with oil and gas in the Barents Sea. A little bit further out in the Kara Sea, Rosneft is commencing cooperation with the American Exxon Mobil. All these projects are suffering of Ukraine crisis and the sanctions. Oil technology is classified as products belonging to sanctions list

83 Today the main project of the Murmansk region is the Murmansk Transport Hub, which entails the renewal and expansion of the city port. Now the Transport Hub is one of the key projects in the Region. Construction work is expected to started in September First operations belong to new railway line from Murmashi to Lavna river. According to the news in the beginning of March 2014 Companies Stroygazkonsulting and Story-Trest have been approved to take part in a tender on the construction railway line along the western shore of the Kola Bay. Norilsk Nickel is the biggest taxpayer of the Kola Peninsula as well as being a key player. The company planned to renew the Monchegorsk smelting plant and start to refine nickel which has been extracted in Norilsk. Norilsk Nickel accepted new strategy in May According to this strategy company is closing nickel refinery in Norilsk and upgrading nickel production in Monchegorsk and refinery is becoming a significant part of Polar Division production chain. New strategy names Monchegorsk to Nickel Refinery Center of the company. The production of cobalt has also increased in Norilsk Nickel Kola Division. The company concentrates its mining operations to the town of Zapolyarny located in the Pechengsky District. As far as concerns Pechenga, Norilsk Nickel also has plans to modify its smelting of nickel to refine metals recovered from the new Gremyakha Mine, e.g. titanium. The company is also involved in the planned chrome mine project to the west of Monchegorsk together with Severnaya Khromovaya Kompaniya. The mining industry of Kola Peninsula has been making some substantial investments into the Murmansk region. The high prices for raw materials on the global markets did provide a welcome boost for these projects. Companies expanding their operations include at least the Olenegorsk Mining and Concentration Works (OAO Olkon) owned by Severstal, and the fertiliser company SZFK owned by Akron that saw the inauguration of its million ton-producing Oleniy Ruchey apatite mine on 24 July Furthermore, the Apatite Group, which has recently resolved its longstanding contract dispute with Akron, is renewing step by step its technologies and planning to open a new mine in the Kirovsky District. The first international player is also entering the Kola Peninsula. The Canadian owned Barrick Gold Company has long time been planning the opening of its palladium/platinum mine together with Russian Investor company OAO Pana at Fedorova Tundra located in the centre of the region. Likewise, the Kovdorslyuda mineral mine in the town of Kovdor has been expanding its production. Finnish enterprises have also expressed an interest in the mining industry and its required technologies during last years. The Finnish companies already involved in the projects include at least Metso, Pöyry, Ahma insinöörit Oy, Firotec Oy and Paakkola Conveyors Oy. The Kovdor mining and processing facility owned by chemical industry giant Eurochem was interested in the Sokli Project of Yara Suomi Oy, but left the project in February 2013 for technological reasons. The company needs new raw materials for its operations during the course of this decade. Its plans are to reprocess the mine waste and potentially open a new mine at Vuorijärvi close to Alakurtti and the border of Finland which is a long perspective project. Total value of mining industry investments seems to be growing in Murmansk Region. JSC Acron and its subsidiary JSC SZFK opened new mine in December 2012 in Kirovsk. This Ruchej Olenyi mine is operating well and company is planning to expand the mine and build refinery plant. Total value of these investment plans is almost two billion. Tourism has long been the focus of development schemes of the Murmansk Regional Administration. Despite efforts, breakthroughs have yet to be achieved. The region has a lack of sufficiently high standard accommodation facilities, and even though the Khibiny Mountains have the possibilities for the construction of a high standard ski resort, the projects have not really taken off. Economic development of Murmansk Region depends on the long awaited solution to Ukraine crisis and return to less tensed relations with EU and USA. Offshore industry still exists in the region. Gazprom is not any more leading company, because Rosneft has replaced it. Company is

84 going to open offshore base in Roslyakovo. Oil and gas technology is on the sanction lists and promising cooperation with foreign partners is postponed to distant future. This might mean also change in Russian offshore strategy. Former prime minister of Russian Federation Yevgeny Primakov made a significant speech in Moscow at Mercury club In his speech Primakov talked also about Arctic offshore. According to Rossiyskaya Gazeta Primakov said that the profitability of extracting oil on the Arctic shelf is guaranteed only at a price of $ a barrel. Should we then, in such conditions, force extractions from the shelf of the Arctic Ocean? Shouldn t Russia, even with all the importance that this region has for the country, take a break from exploring arctic oil and gas deposits? Our competitors have already taken such a break. The U.S. drilled its last well in the Arctic shelf in 2003, and Canada in Yevgeny Primakov had his 85th birthday in the end of October Both, president Vladimir Putin and minister of foreign affairs Sergey Lavrov congratulated him and praised his career both as prime minister and foreign minister. This brought once again the Primakov Doctrine to world political debate. Main investment projects that start before Norilsk Nickel projects in Monchegorsk m 2. Mining technology projects by JSC Kovdorsky GOK 190 m 3. Roslyakovo base by Rosneft 400 m 4. TGK-1 hydro power projects 850 m 5. Tourism projects of Murmansk Region 141 m 6. Murmansk Transport Hub m Total: m Runner ups - projects that can start if growth is stronger than expected Expansion of Ruchej Oleni mine of SZFK in Kirovsk 600 m Murmansk City railway and bus stations 75 m Total: 675 m All total: m Primakov Doctrine consists his idea in 1996 as minister of foreign affairs of Russian Federation to build a Eurasian counterbalance USA-led Trans Atlantic alliance proposing closer cooperation between Russia, China and the Middle East. This old policy was also essential part of his Mercury club speech: Russia would like to normalize relations with the U.S. and Europe, but it would be unreasonable to ignore the increasing significance of China and other countries that are part of the Asia-Pacific Economic Cooperation organization (APEC). Certain countries often frighten us by saying that Russia will be only a raw material supplier to China. With all its opportunities, Russia cannot and will not ever be anyone s raw material supplier

85 6.2 NORTHWEST RUSSIA - ARKHANGELSK REGION Arkhangelsk Region belongs to the northern part of North West Russia. It has 3000 km coast by the White Sea, Barents Sea and Kara Sea. The region includes the Nenets autonomous district, the Novaya Zemlya and the Franz Josef Archipelago. Total area of the region is square kilometers. Airport Harbour Railway ARCTIC SEA Population in Arkhangelsk region is which is 0.8% of Russia s population. The population density is 2,2 per sq. km. and 74 % of the inhabitants live in cities and 26% live in rural areas. Ethnic groups are: Russian 94.2%, Ukrainians 2.tä1%, Nenets 0.6% and other nationalities 3.1%. City of Arkhangelsk is the capital of the region and it has inhabitants. Other bigger cities are Severodvinsk in the neighborhood of Arkhangelsk with inhabitants, Kotlas with inhabitants, Novodvinsk with inhabitants, Koryazhma with inhabitants and Onega with inhabitants. Industrial production Industry is the key factor of Arkhangelsk Region economy. Main branches of business are forest industry and machine building industry. The Arkhangelsk region ranks eighth in Russia and second in the North-western Federal District in the volume of forest resources. Total square of commercial forests is 22 mln. hectares, timber reserves 2,8 billions m3. Timber reserves of the Arkhangelsk region are recognized to be of high quality. Total forest reserves include 82% of coniferous forests and 18% deciduous forests. Available cutting area is 48% of the total forest area. norway sweden FINLAND russia The region produces 30% of Russia s exported sawn material and 25% of paper and cellulose exports. Forestry, wood processing and pulp & paper are very important sectors of the economy contributing over 40% to the regional production volume. Woodcutting in 2002 totaled 8 million cub meters (80 million cub feet), but 23 million cub meters can potentially be cut. According to regional administration, there are over 200 wood cut

86 ting enterprises in the region and some 30 wood processing companies. According to expert estimates, regional enterprises produce million cub meters of sawn timber, plywood, glued blanks, fireproof plywood slabs and other wood products, approximately half of volume being exported. There are also furniture manufactures. One of the most successful is Aquatechnika. An impediment to increased production is poor road infrastructure, especially bad access to forests. Modernization and productivity enhancement on existing sawmills are the priorities for development of logging and wood processing sectors. Active processing and trading companies include Arkhangelsk Plywood Plant, Dvinosplav JSC, Primorsky Sawmill, Onega Sawmills, Solombala Sawing and Woodworking Combine, Timber Mill N3 and Timbex. The three pulp & paper manufacturing facilities in the region are Kotlas (part of St. Petersburg-based Ilim Group), Arkhangelsk (part of Titan holding), and Solombala mills. In average, their output totals 728,000 tons of pulp, 320,000 tons of paper and 674,000 tons of cardboard. The mills have their own logging capabilities and cut a significant share of needed timber themselves. For example, Kotlas pulp & paper mill has 16 logging companies, which are using Timberjack logging machines. Products include sulfate pulp, cardboard, coniferous sulfite bleached cellulose, offset printing and bag paper, Kraftliner, foliage sulfate bleached cellulose etc. Arkhangelsk pulp & paper mill is part of Titan Holding with nearly 25,000 employees. Titan produces 35% of Russia s cardboard. Its logging companies cut two million cub meters of timber every year (25% of logging in the region). A strong machine-building industry has developed in the Arkhangelsk region and it is specialized in shipbuilding. Shipbuilding is an important part of the regional economics because of high competence and unique production assets. The largest enterprises of this sector are «Sevmash» and «Zvezdochka» which create near 90 % of proceeds of the sector. These companies are constructing and repairing nuclear and diesel submarines, oil and gas platforms, ship vessels and others. The unique Russian center for construction, repairing and utilization of nuclear power submarines was founded here. The enterprises have facilities and technologies for construction of oil and gas platforms and necessary unique competence for implementation of the project of construction of floating nuclear thermal power station. There is an infrastructure for preparation of specialists for machine-building sector. Today in Arkhangelsk region there are two higher educational establishments which train such specialists: Arkhangelsk State Technical University and Sevmashvtuz which is a branch of the St.-Petersburg Marine Technical University. Sevmash has build an offshore ice-resistant platform for Prirazlomnaya oil field in the Pechora Sea. The total cost of the project was $1 billion. Sevmash is also a contractor of several oil companies to manufacture sea shelf platforms for oil and gas development in Sakhalin. Zvezdoychka has a contract from the Finnish shipbuilding company, Azipod, to supply screw propellers for civil ships. The company is also Norway s contractor to build bearing structures for tidal electrical power stations. Zvezdyochka has experience in designing and manufacturing of floating bridge piers, pontoons, pontoon bridges of different length, ships, fishing trawlers, jack-up drilling rigs for exploration and exploitation of oil and gas offshore wells in the Russian Arctic. However, attraction of investment is difficult due to the fact that the enterprise is still government property and is engaged in Russian military programs. Transport Advantageous geographical position of the Arkhangelsk region gives important role in the transport system of the North-western Federal District and Russia. The region has a considerable transit potential. Arkhangelsk is the most optimal transport junction for cargo transfer between Europe and Asia. Nowadays two transport corridors go through Arkhangelsk: Northern Sea Route and International Euro-Asian transport Corridor: North-South

87 Sea transport plays the major role in international trade of Arkhangelsk Region, as well as in supplying some settlements along the seashore and on the islands. The main ports are located in Arkhangelsk Narjan-Mar, Onega and Mezen. The seaport in Arkhangelsk has 124 berths and is able to handle all types of cargo including timber, cellulose, containers, oil, metal, etc. Vessels with 9.2 meters depth can use the port. The port has also container terminal, the only in Russia s European North (Russia s regions west of the Urals), where over TEUs can be stored simultaneously. The owner of the Arkhangelsk Commercial Sea Port is Norilsk Nickel. In case implementation of the project of construction of the railroad Syktyvkar-Perm (Belkomur) the Arkhangelsk region will get a shortest access to the regions of the Urals and the railroad Transsib which will open supplementary advantages for cargo transit. The main railway goes from Arkhangelsk through Vologda and Yaroslavl to Moscow. There is a rail link between Arkhangelsk and Murmansk. No fast and short rail, river or road link exists between Arkhangelsk Region with eastern parts of Russia. East-West railway connection is problematic in Arkhangelsk Region. The Belkomur project is improving the situation, but the investment is very expensive. Only railroad connection from east to west runs in the south of the region, from Komi Republic through Kotlas in Arkhangelsk Region to Pudozh in Karelia Republic. Talagi airport in the city of Arkhangelsk is the main civil airport. Also international flights to Tromsö, Norway are two times a week. There were also flights to Rovaniemi, Finland and Luleå Sweden, but they were ended about 10 years ago. There are regular flights to Moscow, St. Petersburg and some other Russian cities, carried out by Nordavia, local air company owned today by Norilsk Nickel. Other companies flying to Arkhangelsk are Aeroflot, Rossija and Utair. There are also small airports in many regional cities as well as several military airports. The flight time from St. Petersburg to Arkhangelsk is 80 minutes. The flight time from Arkhangelsk to Moscow is slightly longer. Future Development of Arkhangelsk Region The Government of the Arkhangelsk region has assumed some measures to increase investment attraction of the region. 1. The regional law «On state policy of the Arkhangelsk region in the sphere of the investment activity» has been adopted. This law will establish uniform standards and rules for organization of investment activity in the region. It is the basis of investment legislation of the region. 2. The regional law «On tax benefits for investment activity on the territory of the Arkhangelsk region» has been adopted. According to this law, new companies registered on the territory of the Arkhangelsk region in the form of legal entities are given corporate income tax benefits for that part of the tax, which goes to the regional budget, and property tax benefits in case of implementation of large investment projects. At present amendments simplifying the procedure of providing facilities to big investors are worked out and will be introduced in regional Assembly of deputies. 3. The Procedure of support of investment projects, implementing and planning for implementation on the territory of Arkhangelsk region has been adopted. It establishes uniform universal procedure of investors and applicants support with cooperation with executive authority of the Arkhangelsk region within implementation or preparation for implementation of investment projects. 4. Committee of investment policy under the Governor of Arkhangelsk region has been created and functions today. It is created for solving any problems of investors with which they meet during implementation of investment projects. 5. The investment portal of the Arkhangelsk region ( ru) has been created in Internet and it functions today. It is created to provide investors with on-line access to information about investment proposals and production areas which are perspective for implementation of projects. (Source: Arkhangelsk Region Administration)

88 The goal of the Regional Government: to construct a new deep-sea harbour to the North of Arkhangelsk with a direct and independent access to the World Ocean, to meet the demands of Russian and foreign shippers for extra harbour facilities. Location north-eastern part of the Dry Sea bay in the Dvina gulf. The construction of a new deep-sea harbour in the port will make it possible to provide: independent departure of large vessels to any foreign harbour of the world; intensification of the economic activity in the northeastern region of the European part of Russia; solutions for many challenges related to the oil and gas developments on the Arctic shelf, operation of production units, development of coastal shipping; establishment of industrial facilities for the processing of hydrocarbons in the North of Russia; significant improvement of the investment attraction of the Arkhangelsk Region; development of industrial, innovation, technical, living, entertaining, cultural and service facilities near the harbour; 9000 new work places in the Arkhangelsk Region; extra taxes to the federal budget about 400 mln. rub., to the regional budget about 800 mln. rub., to the local budget about 280 mln. rub. The project has been considered and approved by the Federal Agency «Rosmorrechflot» in the Ministry of Transport of the Russian Federation. There is a positive resolution from the FSU «Directorate of State Contracting Authority for Marine Transport Development Programs». The Ministry of Regional Development of the Russian Federation has included the project in the Conception of long-term social and economic development of the Russian Federation: «to provide, among other things, operation of the Northern Sea Route and involve huge mineral and natural resources of the northern Russian areas». The development of the deep-sea harbour in the Arkhangelsk sea port is in close connection with the implementation of the Belkomur project (the White Sea Komi Republic the Urals), i.e. construction of the railroad Solikamsk Gajny Syktyvkar Arkhangelsk (1155 km long). The Belkomur project is included in the «Strategy of the Railroad Development of Russia up to 2030», which is approved by the RF Government on June 17, 2008 and will be implemented on the basis of private and public partnership. The project goal is: to get rid of infrastructural dead ends, to provide access to the mineral resources which are not in use at present, to make a new short transit route connecting the Urals and Siberia with the northern Russian harbours. Total length of the railroad 1252 km On August 7, 2009 Belkomur project was approved by the Investment Commission for selection of projects claiming to get budgetary allocations from the Investment Fund of the Russian Federation. The Belkomur project and the Deep-sea harbour «Severny» in the Arkhangelsk sea port are included in the «Integrated program for industrial and infrastructural development of the Komi Republic, the Perm Krai and the Arkhangelsk Region». The Memorandum about joint implementation of the program was signed in June 2007 by the Heads of participating regions. However, the project is especially relevant for shippers only if it is implemented simultaneously with the construction of the new deep-sea harbour in the Arkhangelsk sea port, thus providing the best transshipment and logistic scheme (the shortest railroad, cheap and efficient modern harbour giving convenient access to the Northern Atlantic) aimed at the development of relations between the Russian Federation and its business partners in the European Union, Northern and Southern America, Central and Southeastern Asia

89 Basic advantages of the Belkomur railroad construction are: A shorter route for cargo delivery from the Urals to the Arkhangelsk and Murmansk harbours A solution for the problem of dead-end railroad junctions on the territories of three regions of the Russian Federation Involvement of unreachable natural resources in the economic life, development of uncultivated areas. Arkhangelsk region has a developed machine-building complex with a great potential which creates attracting conditions for investments. The main engine of regional machine-building is shipbuilding enterprises. JSC PO Sevmash is the largest shipbuilding complex in Russia. At present it is the only shipyard in Russia where nuclear submarines are built. The shipyard was founded in 1939 and it has employees. The yard performs the following works: construction of submarines and surface ships and vessels with nuclear power installations construction of vessels, pontoons, barges, and other floating facilities of different classes and functions construction of oil and gas offshore ice-resistant jack-up platforms design, manufacturing and testing of the equipment for production, transportation and processing of oil and gas JSC SC Zvezdochka is a leading Russian shipyard specialized in repairing and re-equipping of submarines, surface vessels and ships of any class and function. In recent years the yard has mastered construction of vessels, fishing trawlers, jack-up drilling rigs for oil and gas production on the Russian Arctic shelf. The yard was founded in 1954 and it has employees. The yard performs the following works: repairing and upgrading of nuclear submarines and surface vessels manufacturing of marine equipment and facilities for oil and gas production civil shipbuilding manufacturing of industrial and technological products for mechanical engineering, metallurgical, oil and gas, and other industries utilization of nuclear submarines and surface ships manufacturing of propellers faceting of diamonds, manufacturing of jewelry. Arkhangelsk region is one of the leading timber-industrial regions in Russia. Total area of forest land is 29.1 mln. hectares, including commercial forests 21.6 mln. hectares (74%). Arkhangelsk region ranks second in the North-western Federal District of the Russian Federation in terms of timber reserves. Total reserves of forest forming species are 2.5 bln. cubic meters, including old-growth and over-mature forests 1.7 bln. cubic meters (65,3 %), coniferous forest 2.1 bln. cubic meters. Timber reserves available for commercial use and processing are 1.8 bln. cubic meters. Coniferous trees in reserves 83.0 % (of which fir-trees are 70 %), soft-wooded broadleaved 17%. Annual allowable calculated cutting area in the region is 22 mln. cubic meters, including coniferous forest 16.7 mln. cubic meters. Maximum possible volume of harvesting, with tending of forest, is 5.3 mln. cubic meters. Vast timber reserves make possible to develop manufacturing of fiberboards and furniture, as well as construction of wooden houses, manufacturing of different things of wood and wood wastes, including alternative fuels

90 Key regional timber-industrial enterprises are: Pulp-and-Paper Mills: Filial of JSC Ilim Group in Koryazhma (Kotlas PPM) JSC Arkhangelsk PPM JSC Solombala PPM Large Wood-working Factories: JSC Timber Plant No25 JSC Onega Wood-working Plant JSC Solombala Wood-working Plant JSC Timber Plant No 3 JSC Timber Plant No2 JSC Arkhangelsk Wood-working Plant No 3 JSC Arkhangelsk Plywood Manufacturing Plant The priority Investment Projects for Development of Forests in the Arkhangelsk Region are: Upgrade of manufacturing facilities for production of cardboard and white paper (Filial of JSC Ilim Group in Koryazhma). Volume of investments: 9900 mln. rubles. Renovation of manufacturing facilities for production of cardboard at JSC Arkhangelsk PPM. Volume of investments: mln. rubles. Upgrade of wood-working facilities owned by Solombalales Holding and establishment of objects of forest infrastructure. Volume of investments: 2718 mln. rubles. Construction a wood-working plant in Arkhangelsk with production capacity 95 thousand cubic meters of laminated veneer lumber and planed elements for carcass house-building per year ( KharviSever- Les ltd.) Volume of investments: mln. rubles. Establishment of a wood-working complex on the basis of Ustjyansky Forestry Enterprise. Volume of investments: 800 mln. rubles. Establishment of manufacture of oriented strand boards (OSB). Volume of investments: 7158,4 mln. rubles. Regional construction complex is presented by construction, installation and specialized organizations, which are capable to provide whole range of construction and repair works, companies producing construction materials, engineering and survey organizations. The potential of the construction complex in the Arkhangelsk region is rather high. Construction companies have qualified personnel, high-capacity machines and equipment and can construct facilities of any complexity level: from multi-storey blocks of flats and industrial buildings to complex out-of-class bridges and hydro technical structures. Engineering organizations employ highly qualified specialists who use advanced technologies for design and upto-date materials for construction. There are factories in the region producing construction structures and materials. They manufacture whole range of steel and reinforced concrete structures for industrial and civil construction, supplying sufficient amount of them for all the regional construction projects. Their production capacities allow increasing the volume of manufactured construction materials more than three times. The region has considerable mineral and raw material resources which make it possible to develop long-term strategic planning within this industrial sector. The development of the mineral resources complex of the Arkhangelsk region is firstly connected with such minerals as diamonds, bauxites, various building materials and underground waters. The largest diamond-field area in Europe is explored in the Arkhangelsk region (18% of reserves of Russian Federation). This is implication for development of faceting manufacture. On the territory of the region there are possibilities for developing of basalt extraction (reserves near 4,6 bln. tones), and also manufacture of crushed chippings and paving tiles. On the territory of the region there are deposits of limestones, which is convenient for organization of cement plant with production capacity of more than 1,8 mln. tons. There are also clay deposits which give opportunity for creation of brick manufacture

91 Arkhangelsk region has a potential for develop oil-and-gas fields on the shelf of the Arctic seas, including the greatest gas distillate deposit Shtokman. The Arkhangelsk region can offer the following. Local companies can be involved as suppliers of materials, goods and services. Distribution centre and integrated logistic base for the project development can be located on the territory of the region. Background: well-developed infrastructure of the Arkhangelsk seaport, vacant production sites, reserves in energy supplying capacity and upcoming gasification, proximity to the large industrial centers of the country. Shipyards of Severodvinsk with their potential can construct offshore and subsea facilities: drilling rigs, supplier vessels on the turn-key basis, specialized oil and gas equipment. In cooperation with foreign partners these plants can manufacture templates, manifolds, subsea completion equipment, etc. Mobilization of local construction companies for participation in projects can be used. Local qualified personnel and potential of educational establishments can be used to train oil and gas specialists for the project. At present regional companies are already involved in servicing huge oil and gas projects in the Arctic and Siberia, and Arkhangelsk transportation hub is the largest transshipment base for such supplies. (Source: Arkhangelsk Region Government, Economic and Investment potential) Arkhangelsk Region investment potential Industry JSC Onezshki PPM, sawmill expansion 65 m JSC New Timber technologies, wood processing plant 250 m ZAO Peterkom. Karpogoryn wood board plant 150 m Saw mills Arkhangelsk/Bereznik 50 m JSC HarviSeverLes, Arkhangelsk, wood processing technology 25 m Solombales, new production technology 70 m Arkhangelsk PPM, Novodvinsk, card board mill 125 m Savinsk furniture plant 35 m Krasnaja Kuzhetsan ship yard 20 m JSC Velskaya, food industry 200 m OOO Veliskiy Kombikormoviy Zavod, food industry 60 m Ilim Paper, Kotlas Koryazhma, recovery boiler 25 m Total: m Mining industry Alrosa/JSC Severalmaz, Lomonosovin diamond field expansion 500 m Arkhangelsk-Geoldobycha/Lukoil, Verkhotinsky diamond field m Total: m Hydro power JSC Malaya Mesen, Mezenskaja tidal power plant 250 m Bio energy JSC Ustyanskaya, pellet plant 45 m JSC Club Wildlife, Letne-Zolotskie project 30 m Municipa bio fuel projects 110 m TGK-2/Huadian, CHPP-plant Arkhangelsk 350 m TGK-2/Huadian, CHPP-plant Severodvinsk 350 m Total: 885 m

92 Transport infrastructure Belkomur railway, Solikamsk-Syktyvkar-Arkangeli m JSC Onega Sea Port, new deep sea port project m Arkhangelsk deep sea port Sever 700 m JSC RZD, Arkhangelsk railway terminal and logistics center 300 m Highway Kyanda-Letnyaya Zolotitza 100 m Total: m Arkhangelsk region total: m Development of the region Ukraine crisis has its effects also in Arkhangelsk Region. Effect could be even positive because the region has strong military industry. Companies Sevmash and Zvezdochka are world famous in building military ships and nuclear submarines. Increasing tension in world politics could be seen in these factories and shipyards. Located on the eastern edge of the European High North area, the Arkhangelsk region almost completely differs from the Murmansk region, even though it too is located along the Northeast Passage, or the Northern Sea Route. Arkhangelsk is an old Russian town and all activities in the Region have much longer history than Murmansk Region which is mostly product of Soviet Union period. Arkhangelsk has an abundance of forestry industry and the oil industry is located in its northern part, in the Nenets Autonomous Okrug. Severodvinsk, close to the city of Arkhangelsk, has shipbuilding yards and a mechanical engineering industry. Geographically, the region is closer to Moscow than Murmansk. The city of Arkhangelsk competes with Murmansk for which city will succeed in becoming the operative centre of Russia s Arctic and northern regions. Both are potential main port locations for the Northern Sea Route (Northeast Passage), although Murmansk has a year-round deep harbour and Arkhangelsk has not. However, in regard to the Northern Sea Route, the Russian Government decided that its administrative centres are located in Moscow and Arkhangelsk, so the competition continues. NSR Center in Arkhangelsk was officially opened in June The Arkhangelsk region has a number of mega-class investment plans. The investments associated with the renewal of the forestry industry technology in the region appear have been the most probable to be implemented. Koryazhma mill of Ilim Paper opened new paper mill in 2014 and is now continuing technology upgrading with new recovery boiler. There are also things happening in the mining industry. Subsidiary of Alrosa, JSC Severalmaz is expanding the diamond field and a totally new diamond field project is in Verkhotinsky. Subsidiary of Lukoil company, Arkhangelsk-Geoldobycha is a billion euro project. However and without a doubt the main project in the region is still the so-called Belkomur railway connection which, when completed, will connect the city of Perm in the Ural Mountains with the Komi Republic and the Arkhangelsk Port. It is an enormous investment that includes the construction of a new track in the Arkhangelsk region from Karpogory to Vendinga in the Republic of Komi. This rail track will also assist with development in the forestry industry, as the region has expansive forest resources

93 Norilsk Nickel owns the seaport of Arkhangelsk and for the future increasing Northern Sea Route transport must be build more port capacity, especially deep sea port. Port Sever is planned for construction on the coast of the White Sea in the estuary of the northern Dvina River. The current port is located along the Dvina River, but shallow channel depths are its constant headache. Furthermore, the channels have to be continuously dredged due to the flow of the river. According to experts the ownership of Norilsk Nickel creates also problems. Company only allows the use of the best piers for its own ships, thereby complicating the development of the existing port. A deep harbour would enhance the importance of Arkhangelsk along the Northern Sea Route, but icebreakers still will be needed to enable year-round functioning. Arkhangelsk also has significant development plans for air traffic.the main airport for Nordavia that services Aeroflot s northern routes is the Talagi Airport in Arkhangelsk. Nordavia belongs also to Norilsk Nickel. The airline used to fly international routes from Arkhangelsk via Murmansk to Tromsø, and it used to operate services to Rovaniemi and Luleå. Now this Tromsø line is closed both for economic and political reasons. In spite of all this Talagi Airport has a significant investment plan to become a type of northern hub for Russian air traffic, which would somewhat ease the immense pressure put on the Moscow airports of Sheremetyevo, Domodedovo and Vnukovo. Arkhangelsk Region has got also a significant Chinese partner Huadian to build two bio energy plants. Agreement regarding cooperation was signed in Sochi Investment Forum in the end of September 2014 by president Vladimir Putin and his Chinese colleague Xi Jinping. Main investment projects that start before 2020 Recovery boiler Ilim Group Koryazhma 25 m JSC Severalmaz Lomonosov diamond field expansion 500 m Arkhangelsk-Geldobycha Verhotinsky diamond field m TGK-2/Huadian CHPP plant Arkhangelsk 350 m TGK-2/Huadian CHPP plant Severodvinsk 350 m Deep Sea port Sever in Arkhangelsk 700 m Total: m Runner ups - projects that can start if growth is stronger than expected Sawmill projects in the region 460 m PPM Novodvinsk cardboard mill 125 m Total: 585 m All total: m Forest industry and forestry are the most important branches of business in Arkhangelsk Region. Strongest actor is Ilim Group which had also a significant paper mill investment in Koryazhma mill in Kotlas. Governor Igor Orlov asked in 2013 Ilim Group to make Arkhangelsk Region Forest Sector Development Strategy to

94 7. SUMMARY AND CONCLUSIONS Economic crises have slowed down the investment process in the European High North. This could be seen already in Crisis in Ukraine was just about to escalate when previous edition of this yearbook was published. Today we know the EU and US sanctions and counter sanctions by Russian Federation. This is also decreasing economic cooperation and business in the High North. Economic growth is globally slower than a couple of years ago. Raw material prices are still on low level due to decreased global demand. Mining investments have been postponed and some of them are turned down. Extremely low oil price compared with prices in is one factor in postponing the offshore projects in Barents Sea. Shale oil and gas have been casting shadows of doubt on the profitability of Arctic offshore. International exploring cooperation regarding oil and gas in Barents sea has stopped. Even strong Norway is silent about new oil and gas project starts. Nothing seems to be happening, but exploration continues by western companies and the future investment potential is growing. There is a huge rise in the European High North investment potential compared with last year. In 2014 total potential was m and now in 2015 total of m. North of Norway is once again number one of the regions regarding investment potential with m. Number two is Oulu Region with m and number three Murmansk Region with m. Former number two Norrbotten is now fourth with m. Then are coming Lapland with m, Arkhangelsk Region with m and Västerbotten with m. Last is the smallest region Kainuu, now proudly with m. Biggest potential growth has been in North of Norway with about 20 billion. Number two is Oulu Region with almost 10 billion growth. Third is Lapland with more than 5 billion growth and Murmansk and Arkhangelsk Region are dealing fourth position with almost 5 billion growth. Then comes Västerbotten slightly under North West Russian regions, Norrbotten with about two billion growth and Kainuu Region with almost 1.5 billion. Investment projects to start within next five year are worth total of m and if the growth is stronger than expected m. So the effect of more dynamic growth is 23.3 billion. Number one region is of course North of Norway with more than 16 billion investments. In the dynamic growth scenario the sum is double with 32 billion. Number two is Oulu Region with 11.7 billion and in the growth scenario just under 13 billion. Number three is Norrbotten with 11.5 billion and growth adds it to almost 14 billion. Then are Västerbotten 5.6 billion ( growth bln ), Murmansk Region 4.8 bln (5.5 bln ), Arkhangelsk Region 2.9 bln (3.5 bln ), Lapland 2.3 bln (4.2 bln ) and Kainuu Region 1.1 bln (1.2 bln ). Wind power seems to be number one branch of business, but in dynamic growth scenario oil and gas grows more, even up to 20 bln. Transport infrastructure is next, then nuclear power and mining industry. Bio energy and trade are only branches under one million investments. Biggest potential growth in dynamic version is in oil and gas, number two is transport infrastructure and then mining industry. Smallest growth is in trade and nuclear power and public investments are as big in both scenarios. The regions and investments North of Norway is as expected number one region in investment potential. Oil and gas projects have the biggest potential. Wind energy is also important branch of business regarding investments. Total sum of more than 16 billion is huge, but wind energy boom is rather slow in the region. Next five years bring more and more energy transfer network projects

95 Offshore projects seem to be postponed up to 2020 if the global economic growth start to boom and raise oil prices over 100 USD barrel prices. Public financing is driving the investment boom. Health care and hospital projects are proceeding together with transport infrastructure and electricity grid. Boom is not at the moment so strong as it seemed to be, but in no way business possibilities could become smaller. Northern Norway is still worth of observing. Oulu Region is number two in investment potential. City of Oulu is rapidly growing in challenging structural change situation. It may take some time, but Oulu is coming back. Number one investment project is Fennovoima Oy nuclear power plant project in Pyhäjoki some 120 km south from Oulu. It is also biggest single project coming under implementation in the whole European High North. Total amount of wind power projects is surprisingly big in Oulu Region. Low-lying coastal region is ideal for wind parks. Oulu is hunting data centers like neighbour city Luleå on the other side of the Bothnian Gulf. So far there has not been bigger success, but Oulu is ideal location for centers with suitable climate and globally high class ITC-community. Murmansk Region is in a very special situation. Everybody expected that offshore is going to be number one business in Economic and political crises have postponed oil and gas projects to future. Shtokman gas field project probably comes back latest on 2030 s but other businesses are driving the development. Mining industry is neither in a good economic situation. Big part of the extracted ore is going to domestic industry in other parts of Russia, so demand is more stabile. Mining technology is the key to economic cooperation with Murmansk Region up to Norrbotten in northern Sweden is developing steadily and investment potential is constantly high. Biggest investment is coming to final stage. LKAB mining project in Kiruna, Svappavaara and Gällivare is ready in 2020 or right after it. Opening of new iron mines is very challenging at the moment with extremely low market prices. Pajala mine is today closed, but it will be reopened within some years. New mining projects are mostly in Saami regions or in close neighborhood. This could create some conflict situations that must be solved quickly. The next investment boom in Norrbotten happens in transport infrastructure. Huge new railway project Norrbotniabanan and construction of second track to Kiruna-Narvik railway are totally more than 5 billion. Wind power projects are proceeding steadily and business potential in the region is still very good. Investment potential of Lapland has been growing from last year. At the moment Sokli mining project is about to start. Finnish government has decided to finance roads to this 1.5 billion project. Mining company Yara is making final decision latest in summer When this project starts the investment boom returns to Lapland. Follow up for Sokli project is not coming very soon. More tight regulation and prolonged permission and license times have been weakening the competitiveness of Lapland in foreign direct investments. Almost unbearable energy taxation with sulphur emission control in Baltic Sea are about to suffocate business development in Finnish High North. Slow and indefinite political decision making is also obstacle for more dynamic investment development. Lapland is number four in potential, but second last in investments before Only the smallest region Kainuu is after Lapland. If growth is stronger than expected, tourism investments probably start to move up. Transport connections are problematic and if existing projects don t start it can create a new obstacle. The three regions with smallest investment potential are Arkhangelsk Region, Västerbotten and Kainuu Region. However we must remember that globally each region has huge potential. Västerbotten seems to invest in wind power during the next five years. Mining investment projects are very interesting, but global demand must grow before implementation starts. Tourism has great potential and it is very interesting to see what happens with winter testing for trains in Jörn/Arvidsjaur project

96 Main business in Arkhangelsk Region is forest industry and forestry. This gives base also to very interesting new bio energy projects with Chinese investor. Diamond fields have good potential, but the investment boom starts when Belkomur project comes to implementation. 8. MAPS and STATISTICS 8.1 European High North investment potential projects Kainuu Region is very small compared with other European High North projects. There is however no need to combine to e.g. Oulu Region as it was during old administration. Investment potential over 2 billion is huge. Mining is number one in good and bad. Talvivaara damages must be repaired and best way to do it is to find new mining company and continue production. 8.2 Industry projects

97 8.3 Mining industry projects 8.5 Trade projects 8.4 Energy projects 8.6 Tourism projects

98 8.7 Transport infrastructure projects 8.9 European High North investment potential 2015 by regions Region million Lapland Oulu region Kainuu region 2360 Norrbotten Västerbotten North of norway Murmansk region Arkhangelsk region Total Public investments 8.10 European High North investment potential 2015 by branches of business Branch of business million Industry Mining industry Oil and gas Hydro power 7720 Wind power Nuclear power Bio energy 1755 Energy transfer networks 3270 Trande 1578 Tourism 5211 Transport connections Public investments 6384 Total

99 8.11 Main investment projects that start before 2020 by regions Region/ million Normal Growth + Lapland Oulu Region Kainuu Region Norrbotten Västerbotten Northern Norway Murmansk Region Arkhangelsk Region Total Main investment projects that start before 2020 by branches of business Branch of business/ million Normal Growth + Industry Mining industry Oil and gas Hydro power Wind power Nuclear power Bio energy Energy transfer networks Trade Tourism Transport infrastructure Public investments Total European High North investment potential by regions and branches of business Regions and branches of business/million Lapland Oulu Region Kainuu Region Norrbotten Västerbotten Northern Norway Murmansk Arkhangelsk Industry Mining industry Oil and gas Hydro power Wind power Nuclear power Bio energy Energy transfer networks Trade Tourism Transport infrastructure Public investments Total

100 References and sources of information Arkhangelsk Region: en.dvinainvest.ru Murmansk Region: Ministry of Economic Development of Murmansk Region North of Norway: Agenda Nord-Norge North of Sweden: NHO Norrbotten Invest in Norrbotten Västerbotten Investment Agency Kainuu Region: Invest in Kainuu Oulu Region: BusinessOulu Oulu Chamber of Commerce Lapland: Lapland Chamber of Commerce PROMOTING BUSINESS IN THE NEW NORTH Lapland Chamber of Commerce (est. 1939) mission is to create success in the North. Representing views and opinions of trade and industry the Chamber is working on better business environment, offering business related services and building networks in order to maintain and enhance business competitiveness. International cooperation and networking plays an active role of the Chamber activities in the European High North not forgetting the worldwide context. Members of the Chamber include a variety of companies from big industrial companies to SME s from different industries and branches of business, municipalities and other business related services. We are open for cooperation and see that each new contact is a chance of new business opportunities. Please don t hesitate to contact us for more information. LAPLAND CHAMBER OF COMMERCE

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