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Northern Finland as a
Solution for the Minerals Crisis
Import Dependency as a Problem in the EU
The Minerals Strategy of Finland was published three years
ago and it stressed the fact that the member states of the
European Union consume 25-30 % of the World´s metals
production, but produce primarily only 3%. Disturbances in
supply conditions of raw materials create a remarkable risk
for the EU. To tackle the risk, the European Commission (EC)
launched a Raw Materials Initiative in 2008 and initiated
the program of European Innovation Partnership (EIP) on
Raw Materials in the beginning of 2013.
The overall objective of the EIP on Raw Materials is to
contribute to the 2020 objectives of the EU´s Industrial Po-
licy – increasing the share of industry to 20 % of GDP – and
the objectives of ”Resource Efficient Europe”, by ensuring
the sustainable supply of raw materials to the European
economy. This will be achieved by reducing import depen-
dency and promoting production and exports by improving
supply conditions from the EU, diversifying raw materials
sourcing and improving resource efficiency (including re-
cycling), and finding alternative raw materials. Achieving the
objectives also requires Europe to be at the forefront in raw
materials sector and mitigating the related negative environ-
mental, social and health impacts.
The EC has identified 14 raw materials that are critical for
the European economy. These raw materials either suffer
from a high risk of supply shortage or their economic signi-
ficance is higher than that of other raw materials. In many
cases their production is concentrated to a few countries
and they are characterised by low substitutability and low
recycling rates. Such raw materials are for instance cobalt
(production in the Democratic Republic of Congo: 41%),
niobium (production in Brazil: 92%), Platinum Group Metals
(PGM) (production in South Africa: 79%) and Rare Earth Me-
tals (REM) (production in China: 97%). In addition, the EC
has listed some important raw materials, which are used in
great quantity by the European industry (e.g. chromium and
nickel), but the production is low. For example the consump-
tion of nickel has increased remarkably due to the urbaniza-
tion of China and India
A number of concrete targets should be achieved by the
EIP on Raw Materials by 2020. These include up to ten inno-
vative pilot actions on exploration, mining, processing, and
recycling for innovative production of raw materials and sub-
stitutes for at least three applications of critical and scarce
raw materials. Further, a target is to create framework con-
ditions for primary raw materials that would provide a stable
and competitive supply from EU sources and facilitate its
public acceptance and framework conditions for enhanced
efficiency in materials use and in waste prevention, re-use
and recycling, and raw materials efficient product design. In
addition to VTT, a number of Finnish companies, research
organizations and industry organizations are represented in
the EIP.
Finland as an Attractive Destination for Mining Investments
Northern and Eastern Finland and can play a pivotal role
in solving the European minerals crisis. The Fennoscandian
Shield, which consists of Northern parts Finland, Sweden,
and Norway, and the Kola Peninsula, is one of the most at-
tractive destinations in the World for exploration and mining
investment. Finland was ranked 2nd in the World on the Po-
licy Potential Index of the Canadian Fraser Institute´s 2011-
2012 survey. This is thanks to good infrastructure, skilled
and well-educated labour, and comprehensive geoscientific
databases. Resource stocks World Risk Survey 2012 ranks
Finland 1st followed by Sweden and Canada.
Northern Finland as an Eldorado of the Mining Boom?
There are 52 mines operating in Finland, with 12 producing
metallic ores and concentrates. According to the Geological
Survey of Finland, the known remaining reserves for some
of the key minerals are (as per end of 2012) 4.0 Mt Cu,
11 Mt Zn, 5.4 Mt Ni, and 0.47 Mt Co. Finland is number
one in Europe in the production of gold, chromium, nickel,
and cobalt. Over the last few years several new mining in-
vestments have been initiated in Northern Finland financed
primarily by foreign companies. These include the gold mine
of Canadian Agnico Eagle Mines Ltd in Kittilä, and the Ke-
vitsa Ni-Cu-PGM mine of First Quantum Ltd in Sodankylä.
The Pahtavaara gold mine of Lapland Goldminers AB is loca-
ted in Sodankylä as well. The Finnish mining and metallurgy
company Outokumpu Oyj has recently doubled the chromite
ore output in the Kemi mine and also the ferrochromium
production in Tornio. Outokumpu is by far the biggest FeCr
producer in Europe. The Finnish Talvivaara Mining Company
plc in Sotkamo is the biggest producer of nickel and cobalt
in Europe.
There are more than 30 companies carrying out explo-
ration in Finland. Some of the most promising exploration
projects are the Suhanko Pd-Pt-Ni deposit of Gold Fields Ltd
close to Rovaniemi and the Sakatti Cu-Ni-PGM deposit of
Anglo American plc in Sodankylä. Northland Resources AB
is evaluating the Fe-Cu-Au deposit of Hannukainen in Ko-
lari and Mawson Resources Ltd the Rompas Au-U deposit
between Rovaniemi and Ylitornio. Yara International ASA
is considering opening the Sokli mine in Savukoski in the
coming years. Sokli is an apatite deposit with some of the
critical metals.
The role of the Northern Finland is undisputed in trying
to find solutions for the minerals crisis of EU. At the same
time, the impacts of the growing mining industry on the lo-
cal socio-environmental conditions have to be taken into
account. Industrial investments are low in Finland at the
moment, but the mining industry has shown some positi-
ve trends in the past few years. The investments in the mi-
ning sector were 1.3 BEUR in 2008-2011 and will be over
3 BEUR in 2012-2017 according to the latest evaluations.
It has been estimated that the mining sector would employ
5000 people in 2015, which means with multiplier impact
about 10 000 – 15 000 jobs. The growth of the mining sec-
tor has also given rise to conflicting interests between rein-
deer farming, tourism and the mines. It is clear that explicit
rules and practices are needed for these industries to create
synergies and co-exist and at the end to achieve their social
licence to operate.
Juho Mäkinen works as Senior Advisor and
Olli Salmi as Research Professor at
VTT Technical Research Centre of Finland