1 Pohjois-Suomen Yksikkö M 10.4/2006/2 Rovaniemi European Network of Mining Regions - Regional Study of Finland Katja Lalli, Markku Iljina and ENMR-working group with following partners: University of Oulu Regional Council of Lapland Council of Oulu Region Regional Council of North Karelia Joint Authority of Kainuu Region
2 ENMR-Regional Study of Finland Contents 1 BACKROUND 3 2 MINING AND EXPLORATION Mining Industry Exploration Junior financing Advanced mine developments Future 11 3 PRODUCTION VALUES Production values Distribution of the expenditures of mining projects of different scales 16 4 MINING AND SUSTAINABLE DEVELOPMENT Clusters Sosio-economic effects Land use issues and access to land Environment 21 References
3 ENMR-Regional Study of Finland GEOLOGICAL SURVEY OF FINLAND Authors Katja Lalli Markku Iljina DOCUMENTATION PAGE Date Type of report Project report Commissioned by European Network of Mining Regions Title of report European Network of Mining Regions - Regional Study of Finland Abstract The European Network of Mining Regions (ENMR) Interreg IIIC project is a joint initiative of European mining regions to improve co-operation and open discussion on subjects of joint interest. The Project consists of 20 partners from ten EU member states, namely Sweden, Finland, Spain, Portugal, United Kingdom, Slovakia, Italy, Greece, Germany and Poland. The main objective is to develop a roadmap for European mining regions. Each of the twenty partners is due to make a regional study of their own regions. This is the Regional Study of Finland compiled in co-operation with Regional Council of Lapland, Council of Oulu Region, Regional Council of North Karelia, Joint Authority of Kainuu and University of Oulu. Keywords ENMR, mining, exploration, clusters, population, education, employment. Geographical area Finland, Lapland, Oulu Region, North Karelia, Kainuu Map sheet - Other information - Report serial M10.4 Total pages 23 p appendices Language English Unit and section Northern Finland Office, 501 Signature/name Archive code M10.4/2006/2 Price Project code Signature/name Confidentiality Public Katja Lalli Markku Iljina
4 ENMR-Regional Study of Finland GEOLOGIAN TUTKIMUSKESKUS KUVAILULEHTI Päivämäärä Tekijät Katja Lalli Markku Iljina Raportin laji Hankeraportti Toimeksiantaja European Network of Mining Regions Raportin nimi European Network of Mining Regions Regional Study of Finland Tiivistelmä European Network of Mining Regions (ENMR) Interreg IIIC- hanke on Euroopan kaivosalueiden verkottumishanke, jonka tarkoituksena on lisätä alueiden välistä yhteistyötä ja toimia keskustelufoorumina alueita kiinnostavissa asioissa. Hankkeessa on osallisena 20 julkisen alan toimijaa kymmenestä EU- maasta, mukaan lukien Ruotsi, Suomi, Espanja, Portugali, Iso- Britannia, Slovakia, Italia, Kreikka, Saksa ja Puola. Hankeen päätavoite on kehittää kaivosalueille roadmap-asiakirja, joka on eräänlainen toimintaopas Eurooppalaisen kaivostoiminnan edistämiseksi. Jokaisen partnerin vastuulla on tehdä alueellinen taustaselvitys omasta alueestaan. Tämä dokumentti on Suomen alueellinen taustaselvitys, ja se on tehty yhteistyössä Lapin liiton, Pohjois- Pohjanmaan liiton, Pohjois-Karjalan liiton, Kainuun maakunta-kuntayhtymän ja Oulun yliopiston kanssa. Asiasanat (kohde, menetelmät jne.) ENMR, kaivostoiminta, malminetsintä, klusterit, väestönkehitys, koulutus, työllisyys Maantieteellinen alue (maa, lääni, kunta, kylä, esiintymä) Suomi, Lappi, Pohjois-Pohjanmaa, Kainuu, Pohjois-Karjala Karttalehdet Muut tiedot Arkistosarjan nimi M 10.4 Kokonaissivumäärä 21 s., 25 liitettä Kieli Englanti Yksikkö ja vastuualue Pohjois-Suomen yksikkö, 501 Arkistotunnus M 10.4/2006/2 Hinta Hanketunnus Julkisuus Julkinen Katja Lalli Markku Iljina
5 1 BACKROUND 3 The extractive industries is strongly clustered in Finland as well as in the whole Europe. In many regions the mining sector represents a major economic force with high influence to all sectors of society. Often mining regions have Objective 1 status. The industry produces some finished goods but mostly semi-finished products, which feed other industrial sectors. This magnifies the importance of the extractive industry. All mining regions in Europe are facing the same challenges: global financial markets, tightening competition and increasing number of new EU regulations. Therefore a need for closer interaction between the companies and the regional actors is important. The European Network of Mining Regions (ENMR) is a joint initiative of European mining regions to improve cooperation and open the discussion on subjects of joint interest. The Network started as an informal co-operation to discuss and exchange experiences on mining related subjects in EU. This informal collaboration resulted the Interreg IIIC funded ENMR Project, which started in January The ENMR Project consists of 20 partners from ten EU member states and is led by Georange in Sweden. The main purpose of the ENMR Project is to analyse the current state of the extractive industries in EU and to identify relevant future developments. The Roadmap for European Mining Regions will be compiled on the basis of these conclusions. This roadmap document is handed to European Commission at the end of the Project. The informal ENMR Network is an open forum and will continue after the ENMR Project has been finished. The work in the ENMR Project follows two lines. One line is interregional and international thematic work, for which three Thematic Working Groups has been established, namely Mining and Environment, Socio-economical Effects and Regional functions, Industry and Clustering. Each thematic working group is built up of five project partners. The other line of work is the regional studies. This Volume is the regional study of Finland compiled jointly by the six Finnish ENMR partners. In order to reach certain consistency among the domestic studies of each country the Lead Partner provided a template and the study presented here is built on that schema. The regional study of Finland covers the following regions: Lapland, Oulu Region, North Karelia and Kainuu (picture 1). One of the network activities is the Regional Workshop Meetings, which are organized in all partner regions. Till today four Regional Workshop Meetings has been arranged in Finland. All Finnish partners have been present including Geological Survey of Finland, University of Oulu, Regional Council of Lapland, Regional Council of North Karelia, Council of Oulu Region and Joint authority of Kainuu Region.
6 4 Picture 1: ENMR Partner Regions in Finland. 2 MINING AND EXPLORATION 2.1 Mining Industry Source: Mining Journal Special Publication Finland, Ministry of Trade and Industry, Country Supplement. Geologically Finland is located in the Fennoscandian Shield, which is the largest exposed area of Precambrian rocks in Europe. The bedrock is old, million years, and is similar to the well-known mining regions in Canada, South Africa, South America and Australia. Due to this geological background the extractive industries in Finland and also in Sweden is characterised by mining of metals and industrial rocks and minerals, as contrast to coal, salt and china clay mining in geologically younger parts of Europe. Europe is almost self-sufficient in producing many industrial minerals and aggregates. However, it is a significant net-importer of most metals and metallic ores. The EU metal mining sector accounts for some 3 % of world production and is located mainly in Sweden, Finland, Greece, Spain and Portugal. At the same time EU is consuming 20 % of World s metallic raw materials. This is not accord with the principles of sustainability, especially because there is potential and raw material available also in Europe. Finland is a significant producer of ore in EU. According World Mineral Production Finland is producing 55% of chromium, 42 % of cobalt metal, 1 % of copper (4 % refined copper), 0.5 % of gold and nearly 1 % of nickel in Europe. Sweden is also a big producer of iron, gold, copper, lead, zinc and silver. The biggest raw material producer in whole Europe is Russia. The metals and minerals are
7 5 used in every-day life for construction materials as well as steel, cars, computers, medicines, human and animal foodstuff, fertilisers etc. Finland has a long tradition in mining. Iron-ore mining commenced in 16 th century. Among oldest extracted minerals are also carbonate rocks, quartz and feldspars. Since that over 1000 different kind of quarries and mines have been in action, from which 270 metallic mines. The beginning of the modern extractive industries can be set in the opening of Outokumpu copper mine in The first legislation concerning mining is from 14 th century. The Finnish Mining Act was enacted in 1932 and has been revised in 1944, 1965 and at present the renewing of the law is taking place. Metallic mines have provided the raw material base for Finland s metal industry, which at the present is the base of Finland s economy. Fe-Ti-V-mine at Otamäki (operating ) has been the kick-off for the Pori titanium pigment plant and Raahe iron-steel plant. Outokumpu copper mine ( ), Vihanti zinc mine ( ) and Kotalahti nickel mine ( ) have been the sources for processing and refining of copper and nickel concentrates at Pori, Kokkola and Harjavalta. Kemi chromite mine was the crucial factor for opening the stainless steel factory at Tornio. From mines mentioned above the Kemi mine is still open. The processing plants mentioned above (Pori, Kokkola and Harjavalta) are all working although relying on imported raw metals. (Mining Journal Special Publication of Finland, 2005) The culmination of metallic mining industry was in the 1970 s as 17 mines were in action. According Ministry of Trade and Industry in year 2004 there was only five active metallic mines namely: Pyhäsalmi Zn-Cu mine producing 1.3 million tonnes of ore, Kemi chromite mine producing 1.2 million tonnes of ore, Hitura Ni-Cu mine producing 658 thousand tonnes of ore, Pahtavaara Au mine producing 418 thousand tonnes of ore and Orivesi Au mine, which today is temporally closed. Combined ore production for metallic mines in Finland was 3.6 million tonnes in The location of mines can be seen in appendices 1, 2 and 3. The major industrial minerals mined in Finland are carbonates, apatite and talc. There are 34 mines producing industrial rocks and minerals in Finland, from these 17 for carbonate rocks. Significant processing plant for phosphorus fertilizers exists at Siilinjärvi, which gets its raw material from nearby apatite mine providing 9.6 million tonnes of apatite in a year. In eastern Finland there are many talc coating factories exploiting local talc deposits and processing plants for local soapstone. There are also several plants for refining local carbonate rocks to crushed limestone, quicklime and paper pigment products. The Ihalainen limestone mine at Lappeenranta produces also wollastonite as a by-product giving raw material for ceramics, plastics, elastomers, coatings, for example. Two carbonate quarries stand out from the others, namely Parainen (annual ore production 1.47 million tonnes) and Lappeenranta (annual ore production 1.59 million tonnes), which have been in action for over one hundred years. Total extraction of carbonate rocks in 2004 was 4,06 million tonnes, combined extraction of other industrial minerals like apatite, talc, quartz and feldspars 11.5 million tonnes and the extraction of soapstone 145 thousand tonnes (Ministry of Trade and
8 6 Industry, 2005). So the total extraction of industrial rocks and minerals rises to 15.7 million tonnes. This high volume of extraction has a significant socio-economic effect. Combined extraction of industrial rocks and minerals is five times bigger than extraction of metallic ores. 2.2 Exploration Source: Mining Journal Special Publication Finland, Ministry of Trade and Industry, Country Supplement. Prevailing conditions for ore exploration in Finland are good. This arises from good infrastructure, political and economical stability, qualified experts and contractors, clear mining and environmental legislation and positive common attitude. Extensive geological databases are also available for the exploration companies. The data is provided by the Geological Survey of Finland (GTK) and it is a result of exploration activities performed mainly by GTK, but also by Outokumpu, Rautaruukki and other older mining companies. The databases create also possibilities for modern computer-based modelling and interpretations. GTK is one of the largest national geological organizations is Europe. This provides substantial amount of different kind of expertises within the geology. The role of GTK in the exploration is to study new discoveries to the point that they will reach the threshold of private interest. All discoveries are tendered to the private sector through Ministry of Trade and Industry. In the old days state-run companies and institutes, like Outokumpu and GTK, performed exploration and mining activities in Finland. The change happened in 1994, when Finland implemented EEA agreement. Simultaneously Finnish companies reduced their actions and the land was opened up for the international exploration and mining companies. Due to this the number of claim reservations peaked in 1994 and the number of claims in At the moment there are about 60 companies operating in Finland, from which most can be considered international mining companies or foreign junior companies. In many advanced projects the companies are working in co-operation. The following companies have some kind of activities in Finland at the moment (according GTK s Exploration info): Company Agnico Eagle Mines Ltd Agricola Resources plc Anglo American Exploration BV Areva Belvedere Resources Ltd BHP Billiton World Exploration Björkdalsgruvan AB Commodity Gold Uranium Nickel Uranium Gold, zinc Base metals Gold
9 Conroy Diamonds and Gold plc Endomines Oy Finn Nickel Ltd Gold Fields Arctic Platinum Oy (Gold Fields Ltd) Gondwana Investments S.A. Ilmari Exploration Oy (European Diamonds plc) Inco Ltd Juuan Dolomiittikalkki Oy Kaivosyhtiö Arctic Ametisti Oy Kalvinit Oy Karelian Diamond Resources plc (Conroy Diamonds and Gold plc) Karhu Mining Company Oy (European Diamonds plc) Karl Forsström AB Kemira Oy Keramia Oy (Tiileri Oy) Kuhmo Metals Oy (Vulcan Resources Ltd) Kylylahti Copper Oy (Vulcan Resources Ltd) Lapp Plats plc (Minmet plc) Mondo Minerals Oy (Omya) Nordic Diamonds Ltd Nordic Mines AB Nordkalk Oyj North American Palladium Ltd North Atlantic Natural Resources Ab Northern Lion Gold Oy Northland Resources Ab Nunnalahden Uuni Oy Omya Oy Outokumpu Mining Oy (Outokumpu Oyj) Outokumpu Chrome Oy (Outokumpu Oyj Oy Alwima Ltd (Dia Met Minerals Ltd) Oy SES Finland Ltd Paroc Oy Polar Mining Oy (Dragon Mining NL) Polar Stone Pyhäsalmi Mine Oy (Inmet Mining) Riddarhyttan Resources AB Scandinavian Gold Ltd ScanMining AB Gold SMA Saxo Mineral Oy Sunrise Diamonds plc Diamonds, gold Gold Nickel PGM Diamonds Diamonds Nickel Dolomite Amethyst Ilmenite Diamonds Diamonds Carbonate rocks Apatite Industrial minerals Nickel, copper Copper, cobalt, nickel Nickel, platinum Talc, calcite Diamonds Gold Carbonate rocks, wollastonite PGM Copper, nickel, gold, platinum Gold Gold Soapstone Carbonate rocks Nickel, copper Chromium Diamonds Gold Industrial rocks Gold Soapstone Zinc, copper Gold Nickel, PGM, gold Gold Quartz Diamonds 7
10 Svenska Platina AB SP Minerals Oy Tailtiu Oy (Taranis Resources Inc) Talc de Luzenac Talvivaara project Ltd Tertiary Minerals plc Tikema Oy TOM Exploration Oy Trans-International Mineral Exploration Ltd Troy Resources NL Tulikivi Oyj Copper, nickel, gold, platinum Quartz, feldspar Gold Talc Nickel, copper, zinc Gold, diamonds, tantalum Carbonate rocks PGM Gold Gold Soapstone 8 In Finland the expenditure in the exploration has been on the highest level in Europe in the whole 21 st century, about 40 million euros per year. Since 2002 exploration companies have even raised their investments in exploration due to increase in base metal prices. According the Finnish Mining Register there were 1342 claims in Finland in 20 th of April 2005 (excluding claims for gold panning). From these 790 are in the region of Lapland, 195 in Oulu Region, 88 in Kainuu and 90 in North Karelia (appendix 4). In Lapland the exploration is concentrated in metals, especially gold, PGE and nickel. In Oulu Region the most common exploration targets in addition to gold are other metals like zinc and copper, and also diamond. In Kainuu the most common exploration target is diamond together with industrial rocks and minerals like soapstone and talc. Gold is the most favourite metal in Kainuu. In North Karelia the most common target is again gold. The next common exploration target is soapstone. (Ministry of Trade and Industry , Mining Register). Certain areas in eastern Finland have been found to be critical for diamonds. Close-to-economic deposits are reported from Kuopio-Kaavi area. In addition to these discoveries, the geological similarity of eastern Finland with the Russian diamond fields on the other side of the border has boosted the exploration. Gold mineralization has been taken place during discrete episodes of crustal evolution of the Fennoskandian Shield. Dozens of orogenic gold deposits of different ages have been discovered in the greenstone belts in eastern and northern Finland. Today the most important of these is Pahtavaara gold mine; advanced mine developments include the Pampalo in the easternmost Finland and Suurikuusikko in northern Finland. The most significant gold occurrences in Southern Finland are Haveri, Orivesi and Jokisivu deposits. The last one has been announced to be opened together with the re-opening of the Orivesi mine.
11 9 Platinum exploration is almost exclusively confined to layered mafic intrusions. The Tornio-Näränkävaara Belt crossing southern Lapland and northern Oulu Region contains more than two thirds of the layered intrusions in Finland. This zone hosts the world-class chromite deposit at the base of the Kemi Intrusion. The Koillismaa Complex has been exploited for vanadium and is still explored for nickel and platinum. The Portimo Complex including Suhanko area is in the central part of this zone. Mafic intrusions host also deposits of nickel, like Keivitsa in Northern Finland. The world market price of nickel has been rising, and so has the interest for exploration of this metal. Important nickel sulphide reserves are contained also in black schists, like Talvivaara in Eastern Finland, and orogenic greenstone belts. 2.3 Junior financing Source: Country Supplement Most of the exploration companies active in Finland are foreign junior companies, which get their financing from stock markets of London, Stockholm, Canada and Australia. These companies usually have expertise on one field in which they have focused, like diamond, gold or nickel, and they purchase all the services needed from local contractors. Several major mining companies have also invested on exploration. These companies get their financing from their own in-house cash flow. Getting venture capital for the exploration and mining in Finland has been difficult, and the investments made so far are minor and inadequate for systematic exploration. In order to enhance this Finnish Industry Investment Ltd has been developing a Fennoscandian Mining Fund. The aim has been to get 75 M euros investment engagements for exploration of metallic ores and industrial minerals in Finland, Sweden, Norway, Greenland and NW-Russia from both institutional investors and private sources. In addition to the Fund, more venture capital would be needed. One long-term challenge for financing mining and exploration in Finland is to provide a stock exchange list for the companies working on the sector. The government has traditionally supported exploration and opening of mines via Ministry of Trade and Industry. This support can be several million euros for one project. After joining to European Union, the procedures needed to be harmonized and made accordant with the European standard. Therefore this direct support given by the Ministry of Trade and Industry was finished and all financial support was transferred to the control of the national Employment and Economic Development Centre (TE-Centre). This decision was not favourable for mining sector, since there is no appropriate expertise in TE-centres. Public financing from EU is also possible through regional authorities. TEKES (National Technology Agency of Finland) is granting loans and support for innovative mining projects. (Vartiainen et al, 2005).
12 2.4 Advanced mine developments 10 The most advanced gold exploration project is the Suurikuusikko Project, tenure owned by Swedish company Riddarhyttan Resources AB. Gold mineralized zones occur within mafic volcanics, along north-south trending shear zone. In July 2005 Riddarhyttan Resources delineated a new estimate for the total mineral resources in Central Suurikuusikko as 2.5 Mt (measured) grading 6.2 grams of gold per tonne, 9.3 Mt (indicated) grading 5.1 grams of gold per tonne and 12.5 Mt (inferred) grading 4.2 grams of gold per tonne using 2.0 g/t as cut off. Since 1998 Riddarhyttan Resources has spent more than 17 million euros on exploration and development in this area. At the moment Agnico-Eagle Mines Limited from Canada has announced a public offer to the shareholders of Riddarhyttan Resources for all outstanding shares. Another advanced project is the layered intrusion related Cu-Ni-PGE deposit at Suhanko (PGE= Platinum Group Elements, like platinum and palladium). The South African company Gold Fields Limited has tenure for three mining concession and claim areas covering 305 km2. Exploration has focused on mineralization in thee layered intrusions, namely Suhanko, Konttijärvi and Narkaus. The Suhanko intrusion contains the Ahmavaara deposit, in which Cu-Ni-PGE mineralization is associated with sulphides and occurs in pyroxenite and gabbro layers at the base of the intrusion. The resources currently amount to Mt at an average grade of 2.33 grams of PGE+Au ore per tonne, with 0,19% of copper and 0.09% of nickel. In year 2004 Gold Fields used 4.99 million euros on exploration on the area. If the mine would be opened, it could become the biggest mining sector employer in Finland and would require a workforce of around 500. Gold Fields Limited has just announced an option deal with North American Palladium to look for the feasibility of the deposits. The Talvivaara deposits comprise two different polymetallic orebodies, Kuusilampi and Kolmisoppi. The mineral reserves have been delineated at 340 million tonnes of ore, containing 0,27 % of nickel, 0.56% of zinc, 0.14% of copper and 0.02% of cobalt. 82% of mineral reserve is in measured and indicated classes. The orebodies are well suited for open-pit excavation due to very thin overburden and favourable resource geometry. Mining and ore processing techniques are being tested in-situ demonstration trial during 2005 and If the financing will be organized, the construction of the mine is anticipated to start in The Australian-based junior explorer Dragon Mining NL is aiming to establish several gold production centres based on Outokumpu s former assets. The Vammala Production Centre is located in Southern Finland and includes Vammala processing plant, the Orivesi gold mine, the Jokisivu Project and several claim tenures in gold-bearing Tampere Shist Belt and adjacent areas. As of early 2005, total Orivesi resources stood at 658,000 tonnes at an in-situ grade of 9.8 g/t gold. The Pampalo is located in Eastern Finland and includes the Pampalo gold deposits and other gold occurrences in the surrounding greenstone belt. Pampalo Project is fully permitted for underground mining, milling and flotation plant. Mineralization in Pampalo is hosted by three plunging ore shoots, which have been drilled in detail down to the 340-
13 metre level and to a lesser degree to the metre level. (Mining Journal Special Publication of Finland, 2005). 2.5 Future Extractive industry in Finland is at top of the world regarding skills and technology due to R&D over decades. The main issues have been improving the ore extraction and processing methods in order to get more optimal, costeffective and environmentally sustainable methods. The extractive industries is spending to research and technical development more than average of other industrial sectors if exploration expenditure is included. The future of the mining industry depends on the existence of new exploitable deposits to replace the closing mines. The success of the exploration activities is depending on possibilities (access to land), know-how and finance. The government has assured that the prerequisite of exploration and mining will be improved. Potential lies in bedrock, and possibilities for new deposits to be found and new mines to be opened has geological grounds. Mineral reserves in some mines will last for decades, in metallic mines this concerns only the Kemi mine with ore reserves for years. 3 PRODUCTION VALUES 3.1 Production values Source: Statistics Finland. This chapter depicts production values and related things brought up by regions, industrial sectors etc. Data is collected by regions (nuts 3). If there is only one actor per region, values are removed due to data protection. Pulp, paper and paper products industries are used as a reference industry for the mining and metal industries. In appendix 5 are the production values for whole Finland and in appendices 6-10 are the relevant diagrams. In following diagrams (pictures 2-13) is collected few key figures from all Finnish Partner Region considering five essential industrial sectors as a whole. To the diagrams have been included metal, forest and chemical industries, non-metallic mineral production and mining and quarrying. Services, trade or transportation has not been handled in this context, nor has food, clothing or energy industries. In these diagrams the forest industry includes both manufacturing of pulp and paper and mechanical forestry. Also metal industry contains everything from refining metals to machinery. Metal industry is the dominant industrial sector in the whole Finland in production, in value add, as employer and also in export. There are, however, differences between the regions. When drawing a line dividing Finland into east-
14 12 ern and western sections, then the western part of the Finland would be more dependent on metal industry. In the western area there are few big metallurgical plants and a lot of engineering workshops. In eastern half the production values and exportation figures of forest industry are bigger, for example in regions of North Karelia and Kainuu. In Kainuu and North Karelia the great importance of industrial rocks and minerals can also been seen in depicted figures. Lapland, gross production 2003 C Mining and quarrying Forest Industry Picture 2: Gross production values for Lapland in year Data is from Statistics Finland Chemical Industry 26 Non-metallic Mineral Products Metal Industry Oulu Region, gross production 2003 C Mining and quarrying Picture 3: Gross production values for Oulu Region in year Forest Industry Chemical Industry 26 Non-metallic Mineral Products Metal Industry North Karelia, gross production 2003 C Mining and quarrying Forest Industry Picture 4: Gross production values for North Karelia in year Chemical Industry 26 Non-metallic Mineral Products Metal Industry
15 13 Kainuu, gross production 2003 C Mining and quarrying Forest Industry Picture 5: Gross production values for Kainuu in year Chemical Industry 26 Non-metallic Mineral Products Metal Industry Lapland-Exportation 2003 C Mining and quarrying Forest Industry Picture 6: Exportation values for the main industrial sectors in Lapland in year Chemical Industry 26 Non-metallic Mineral Products Metal Industry Oulu Region-Exportation 2003 C Mining and quarrying Forest Industry Picture 7: Exportation values for the main industrial sectors in Oulu Region in year Chemical Industry 26 Non-metallic Mineral Products Metal Industry
16 14 North Karelia-Exportation 2003 C Mining and quarrying Forest Industry Chemical Industry 26 Non-metallic Mineral Products Metal Industry Picture 8: Exportation values for the main industrial sectors in North Karelia in year Kainuu-Exportation 2003 C Mining and quarrying Forest Industry Picture 9: Exportation values for the main industrial sectors in Kainuu in year Chemical Industry 26 Non-metallic Mineral Products Metal Industry Lapland-employees 2003 C Mining and quarrying Forest Industry Picture 10: Number of employees in five main industrial sectors in Lapland in year Chemical Industry 26 Non-metallic Mineral Products Metal Industry
17 15 Oulu Region-employees 2003 C Mining and quarrying Forest Industry Picture 11: Number of employees in five main industrial sectors in Oulu Region in year Chemical Industry 26 Non-metallic Mineral Products Metal Industry North Karelia-employees 2003 C Mining and quarrying Forest Industry Picture 12: Number of employees in five main industrial sectors in North Karelia in Chemical Industry 26 Non-metallic Mineral Products Metal Industry Kainuu-employees 2003 C Mining and quarrying Forest Industry Picture 13: Number of employees in five major industrial sectors in Kainuu in Chemical Industry 26 Non-metallic Mineral Products Metal Industry
18 Distribution of the expenditures of mining projects of different scales The following chapter describes the estimated investment distribution in small and big mining projects. The estimations are provided by Outokumpu Mining Oy (Country Supplement, 2005) Small scale mine means an underground and a big scale mine open-pit in the presented estimation (pictures 14 and 15). The examples include all expenses, like investment and operating costs according to Finnish cost level and the profit with interest rate of 15 %. The government will get the financial support given for the opening of a mine back in reasonable time as taxes. To this value must be added the fact that a mine probably has a positive effect to local economy as an important employer and this way reduces the public expenses. From the estimates can also be seen that the proportion of domestic work, services and material in a mine is high. At its most the incomes going abroad are only percents. Distribution of cash flow, % Typical small mining project Owners 11 % Staff 9 % Services etc 23 % Taxes 23 % Energy 5 % Machines and materials (domestic) 20 % Machines and materials (import) 9 % Picture 14: Distribution of cash flow for a small underground gold mine (Outokumpu Mining). Estimated investment costs are M, sales > M /year and employment persons. Distribution of cash flow, % Typical big mining project Services etc 12 % Owners 9 % Staff 5 % Taxes 14 % Energy 9 % Machines and materials (import) 17 % Machines and materials (domestic) 34 % Picture 15: Distribution of cash flow for a large open pit (Outokumpu Mining). Estimated investment costs are M, sales > 100 M /year and employment persons.
19 17 4 MINING AND SUSTAINABLE DEVELOPMENT 4.1 Clusters Source: Ministry of Trade and Industry, Mining Register; Finnish Association of Mining and Metallurgical Engineers, membership register. One part of the regional study was to find out the companies with connections to mining industry. In Finland the main sources for this data has been the membership registers of the Finnish Association of Mining and Metallurgical Engineers and the Association of Finnish Extractive Resources Industry. From these membership registers those companies found from Finnish Trade Register as well as 26 major foreign mining companies were accepted. In addition to this the list contains educational institutes and research centres connected to mining. As a result we have a list of 443 companies or actors in business (appendices 11 and 12). Most of them are domiciled in Helsinki area. The extractive industries is a substantial part of Finnish economy. In 2003 mining and quarrying employed 4570 people, which is 1.05 % of all industrial workers and 0.18 % of the whole workforce (C in classification of Eurostat including peat, metals, minerals, rocks, sand and gravel). According Ericsson et al (2002) the extractive industries consists of five major sectors, namely metal mining, industrial minerals, dimensional stones, aggregates and mining equipment and services. These sectors employed in persons, which make 0.34% of whole workforce (Statistics Finland, 2005). These industries produce mostly semi-finished products, which feed other industrial sectors; base metals, fabricated metals, chemicals like dyes and pigments, inorganic chemicals, fertilisers, rubber and plastic and non-metallic mineral products. In year 2003 these down-stream industries employed people, which makes 3.45 % of all workers and 20.2 % of all industry workers. (Statistic Finland, 2005) Association of Finnish Extractive Resources Industry was established in 1999 to promote co-operation and supervise the interests of members. At the time extractive industries were defined as a cluster, which includes besides mining companies also machinery, supply, contracting, consulting and research/education centres. Hence all the actors on the sector are represented. At the moment there are 28 members in the association, and all significant companies domiciled in Finland and working in mining sector are on the list. At present the mining industry represents really high technology. In Finland the mining of the lower grade ore deposits has required developing of effective mining and ore processing technologies. This on the other hand has been the basis for the high-grade mining equipment industry with great importance in Finland. Aggregates sector produces sand, gravel, crushed rock, concrete and asphalt mainly for the road and house-building. This sector comprises over 400 companies with an average of four employees per company. Aggregate producers
20 18 are spread all over the Finland and are mainly local small and medium-sized enterprises. The economic succession is highly dependable on ups and downs of the building sector. Unlike mining and quarrying, which is supervised by Ministry of Trade and Industry, the aggregates is supervised by Ministry of Environment. 4.2 Sosio-economic effects Population Source: Statistic Finland Data is collected by subregions (nuts 4): On the four ENMR Partner Regions Lapland is divided into 6 subregions with total of inhabitants in year 2004, Oulu Region is divided into 7 subregions with total of inhabitants. Kainuu is divided into 2 subregions with total of inhabitants and North Karelia is divided into 3 subregions with total of inhabitants (appendices 13-17). As the total population of Finland in 2004 was people, the Partner Regions have only 15.6 % of population although these regions cover 54 % of the Finland. The average population density on these four areas is 4.5 persons/km 2, whereas the population density of Finland is 17.1 persons/km 2. So area is quite sparsely populated, with few bigger population centres. In these four regions there are 88 municipalities. From these 23 are cities, so 65 are rural municipalities. The biggest city and the biggest growth centre is Oulu with its inhabitants. In addition to Oulu, there are two over people cities and four over people cities in the area concern. According the data collected 45% of the population lives in these cities. 55% lives in rural municipalities and smaller ( inhabitants) towns. During the population of Partner Regions has been decreasing by persons from to inhabitants. At the same time the population is aging. This is mainly due to migration of young people to bigger growth centres of southern Finland. During this time the largest population centre, Oulu Region, is the only one having positive population development with 17 % growth of population. Cities with people have generally slightly negative population development. These cities are important governmental, service, educational or industrial centres. In some medium sized cities ( people) the negative trend has been turned to slightly positive in the years The loss of people is biggest in remote rural areas, where opportunities for education and employment are scarce (appendix 16). In these areas the proportional share of older people is also the biggest. The situation is most difficult for areas, where the economy is mainly based on primary production. The areas, which are depending on tourism, have had better development trends in employment and aging (appendices 23-24). For these reasons the effect of mining industry and exploration is crucial for the most remote areas. According population forecast the population will continue to diminish reaching at In Oulu Region the population continues to grow until 2030, but will turn negative beyond that. In other regions the population decreases evenly. The migration is the most important factor in the population development at the moment. After 2010