MINING PROJECTS AND THE EMPLOYMENT AND ECONOMY, MINING LEGISLATION IN FINLAND

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1 MINING PROJECTS AND THE EMPLOYMENT AND ECONOMY, MINING LEGISLATION IN FINLAND Haparanda Alpo Kuparinen Head of Mineral Policy Division Ministry of Employment and the Economy Finland

2 Why Explore in Fennoscandia / Finland?

3 Fennoscandian Shield EU s Major Prospective Region Similar to Canada, Australia Under-explored terrain with significant potential Au, PGE, Ni, Cu, Zn, diamonds, etc. Excellent geodata and infrastructure Secure and favorable investment environment GTK

4 Exploration Companies in Finland in 2007 (Finnish companies in blue) Company Commodity Agnico Eagles (Riddarhyttan/Suurikulta) Agricola Resources Plc Uranium Akkerman Exploration Ni, PGM Anglo American Plc. Ni Belvedere Resources Limited, copper BHP Billiton World Exploration Cu, Ni Cogema / Areva Uranium Dragon Mining (Polar Mining Oy) Endomines Oy (+Nordic Mines AB) Fields Arctic Platinum PGM Gondwana Investments S.A. Diamonds Ilmari Exploration Oy (European Diamonds) Diamonds Karelian Diamond Resources Plc (Conroy) Diamonds Karhu Mining Company Oy (European DiamondDiamonds Kuhmo Metals (Vulcan + Dragon) Ni, PGM Kylylahti Copper (Vulcan + Dragon) Cu, Ni, Co, Au Mondo Minerals Oy Talc Nordic Diamonds Limited Diamonds Nordic Mines AB North American Ab Northern Lion Corp. Oy Nordic Diamonds Finland Diamonds Pyhäsalmi Mine Oy (Inmet) Zinc, copper Scandinavian Ltd. ScanMining Ab Sunrice Diamonds Plc (Tertiary Minerals Ltd) Diamonds Suomen Nikkeli Oy Nickel Talc de Luzenac Talc Talvivaara Kaivosprojekti Oy Ni, Zn, Cu Tertiary Limited TOM Exploration Oy PGM 15 years ago exploration by domestic companies and GTK (Geological Survey of Finland)

5 Exploration licences Diamond PGE Base metals Industrial minerals Lähde: KTM

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8 Advanced mine projects in 2007 Nickel / platinum Other Punasuo, talc; Mondo Minerals Hyvelä, Ni Laivakangas, Au Nordic Mines Kälviä, ilmenite Kaustinen, Li Mäntymäki, Ni Orivesi, Au Jokisivu, Au Suurikuusikko, Au (>3 Moz gold) Agnico-Eagle Mines Särkiniemi, Ni Keivitsa, Ni-PGM (207 Mt) Scandinavian Minerals Ltd Suhanko, PGM-Ni (>14 Moz Pd+Pt) North American Palladium Talvivaara, Ni (318 Mt) Talvivaara Mining Corp. Alanen, talc, Luzenac Suomi Oy Kylylahti Cu-Co-Au Pampalo, Au Valkeisenranta, Ni Niinimäki, Ni Hyypiänmäki, carbonate rock

9 ECONOMIC IMPACTS OF MINES Increase of economic activity in the whole economy and on the region Diversification of economic structure; subcontracting, demand of sevices Employment in the constructing time; hundreds or thousends of manyears Increase of costant direct employment; different skills of mininig personel Increase of constant indirect employment is often 3-4 times direct employment Increase of national and local tax revenues Improvement of technology in exploration, mining and costruction of mining machinery and equipment

10 ECONOMIC IMPACTS; case Talvivaara (based on study by University of Helsinki) Total investment ~ 550 M Quarring 15 M tons/year; raising the Finnish national quarring from 4 to 20 M tons/year Increase of regional GDP annually by 1.4% in Cumulative increase of regional GDP by 32.4% in Increase of direct employment by 400 persons Increase of total employment by persons Decrease of regional unemployment by 2,0-2,5 %-units Increase of municipal taxes by 9,5 M = 40 % of present tax incomes of Sotkamo municipality

11 The policy of Finnish government to support mining industry the Finnish government is regarding the mining industry as very important for the economy of the whole country but especially for the rural and high unemployment areas for these reasons the government in September 2008 made a principal decision to support mining industry conditions of the support: the project shall be of such magnitude and long term duration that its impacts in terms of national economy, regional economy and employment are significant financing shall be based on the project s positive socioeconomic and financial cost-benefit ratio

12 Forms of government support direct budget financing of infrastructure investments serving opening of new mines (electricity, water, sewage pipelines etc, research tunnels); some M /project funding of mine investments by public financial institutes; loans and guarantees (Finnvera) and capital financing (Finnish Industry Investment Ltd ); some or tens of M financing of transport infrastructure investments needed for opening new mines (railroads, roads, harbors) the models and forms of support is reviewed by a working group, DL ; up to hundreds of M contribution of several levels and forms of education and training of staff required for the mines

13 RENEWAL OF THE MINING LEGISLATION Overall reform of the Mining Act from 1965 is currently underway The proposal by a working group given in Oct 2008 About 100 statements from administration and interest organisations have been given Further preparation in the Ministry of Employment and the Economy in the first half of 2009 Proposal by the government to the parliament in autumn 2009 The Act passed by parliament in 2010 The new Mining Act into force at the beginning of 2011

14 TARGETS OF THE NEW ACT To ensure with modern legislation the preconditions for mining and exploration in a socially, economically and ecologically sustainable manner To find a balance between different competing private and public interests

15 ISSUES TO BE TAKEN INTO ACCOUNT Environment protection Citizen s fundamental rights Landowner s rights Municipalitie s possibilities to influence decision making

16 WHAT WILL CHANGE? no major changes to the application processes in the applications some more information is required in the exploration and mining licenses some more conditions will be given regulations for finishing exploration and closing down mines will be extended the ministry will not any longer be in charge of mining authority functions. This task will be transferred to another government organisation

17 Import dependence of the European Union (Noetstaller, 2000)

18 EUROPEAN RAW MATERIAL POLICY The Eu commission has given a communication on raw materials policy in Oct 2008 Main weight in the communication is on EU trade policy issues Measures encouraging exploration and mining industry in the EU area will also be considered because of the good mineral potentiality in Finland and Sweden this intiative for new EU policy is for both countries very important The Swedish chairmanship in 2009 gives possibility to drive this initiative into practice

19 MORE INFORMATION ON THE LINKS på svenska and in English / kaivoslakiuudistuksesta ruotsiksi