Västerbotten Investment Agency

The Nordic countries have recovered faster than other regions of the mining world from the financial crisis of 2008/09

november 5th, 2010

Already in 2010 exploration expenditure is back at and possibly exceeding the pre-crisis level and reaching towards 150 million euro. Sweden, Finland and Norway are vigorously defending their position as the Mining Centre of Europe. Over the last decade a total of some 1 200 million euro has been spent on exploration if also Greenland is included. As always in exploration results have come at intervals and sometimes at a speed which is not as fast as the investors want, but in the last years progress is swift. Most spectacular is the technologically groundbreaking Talvivaara project, a world class nickel mine. Several small but profitable gold mines have been started by foreign companies bringing new ideas and technologies.

Recently iron ore has come into focus reacting to the insaturable demand from China: Northern Iron, Northland Resources, Dannemora, Beowulf, Grängesberg and Nordic Iron are all pushing projects at various stages. But there are also some causes for concern. In the recent Swedish election campaign some parties declared that they would be prepared to stop uranium exploration and mining altogether. In both Sweden and Finland there are unresolved land use issues realting to both exploration and mining. In Norway exploration needs to be vitalised and trust in the mining sector to be rebuilt. In Sweden where health & safety issues earlier were highly prioritised, research and development in these areas have been cut almost to zero and also the enforcement of existing regulations has become more lax. On a more general level the dangerous misconception of ”peak metal”, the mistaken notion that metals are running out, has been spreading. So far these unscientfic and unfounded theories have not gained senior political support, but if they do the implications for the mining industry could be serious. All these issues need to be dealt with if the optimal benefits of the mining boom shall be reaped.

Given the present focus on raw materials supply in Brussells timing is perfect for governments and industry in the Nordic countries to take action and make sure their leadership is maintained and strengthened. Mining legislation in the three countries should be harmonised and made competitive without compromising the environment or socio-economic values. A European equivalent of the former US Bureau of Mines should be located to the Nordic countries and serve as a basis for intelligent and forward looking policy formulation. The geological surveys in the Nordic countries should cooperate more closely and avoid overlapping. The European relations to mineral rich developing countires should be reformulated to counter the strong Asian competition without falling back into colonial patterns. In this area the Nordic countries with experiences of an equitable development cooperation combined with the entire mining cluster, from researchers and equipment suppliers to regulators and underground workers, form a unique knowledge base for setting a winning strategy.

Magnus Ericsson
Senior partner Raw Materials Group
Professor at Luleå University of Technology

Raw Materials Group (RMG), set up in 1985, are pioneers in mining data compilation and analysis. Magnus is a co-founder of the company. He is responsible for advisory services, including corporate strategies and price forecasts particularly for iron ore and also the development of government mineral policies as well as market studies for the equipment supplier and service providers.

Published in Mines & Minerals #5 2010

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