Nordic Mining Star

Harry Sandström, Programme Director of Mining Finland, talks to CEO Insight of how the Nordic European country – source of much of the world’s mining technology – now appears on the radars of the world’s most discerning mining investors. With a geological profile and other attributes that are impossible to ignore, this jurisdiction’s star is inexorably rising.

 CEO Insight: What would you describe as the key elements in terms of Finland’s infrastructure, as well as its fiscal, legal, governance and social credentials, and how do these cumulatively work to make it a highly compelling prospect for foreign investors?

Harry Sandström: Finland has excellent infrastructure compared to most mining countries, with companies finding very little road construction is required to access sites, extremely reliable power supplies and excellent ITC. Meanwhile, feedback from the companies is that the legal and regulatory situation is quite tight but predictable.

We must, however, accept that concerns around the social and environmental impacts of mining are increasing. In this respect, each case is unique – it depends where it is located, what commodities are being mined, and which stakeholders are involved. In some cases, permissions and licences may take some time, particularly if the proposed site is close to a critically protected environment. Yet, importantly, it remains a predictable process, with companies factoring in the appeals, hearings and obligatory discussions into their timescales.

CEO: Have you seen any evidence of investors overlooking Finland in favour of jurisdictions with less stringent environmental criteria?

HS: No, I don’t think so. Everywhere in the world you have delays. The main issue is the geological potential.

CEO: In terms of comparison with Finland’s Nordic brothers. What distinguishing characteristics elevate you above the likes of Sweden?

HS: Finland has a bit more potential in terms of nickel deposits and also cobalt, which is important for the battery industry.  Concerning the legal and regulatory framework, in Finland all the licences and permits are issued by the mining authority, TUKES (www.tukes.fi) rather than the regional government, which may offer its opinion, but is powerless to affect the outcome. This distinguishes Finland and constitutes a fairer system for the mining industry.

“We have a number of new investors and partners, especially in the form of exploration and project development companies, which have not previously been active in Finland.”

CEO: What is the nature of Finland’s partnerships with low and middle income countries where mining is still the main economic driver? 

HS: Finland has partner programs in parts of the world where we try to facilitate the networking of our technology companies, with one such region being Southern Africa.

It is important to note there is no hidden agenda here. Rather, we recognise the countries’ aims and objectives to develop mining and their own business ecosystems, and so we offer ourselves as constructive partners.

CEO: Which recent Finnish breakthroughs and innovations to enhance mining particularly stand out, whether in relation to increased automation, ore sorting, mechanised cutting, soda leaching or renewable energy?

HS: Finnish ores are quite low grade and take a lot of processing. This has forced mining companies active here to develop innovative technologies to do so cost-effectively, in the process allocating large resources to building academic and research organisations. In this way, it has been a key factor and the basis for the international development of the Finnish mining sector.

It is startling to note that some 80% of today’s underground mining machinery across the world emanates from Finnish or Swedish mining technology companies.  Meanwhile, Finland has programmes stretching back to the 1990s regarding the automation and optimisation of mining processes, which has helped the country be able to claim some of the most productive underground mines in the world.

CEO: Is the focus on courting new investors or working with existing ones?

HS: We have a number of new investors and partners, especially in the form of exploration and project development companies, which have not previously been active in Finland. As ever, most of these hail from Australia and Canada, but there is also increasing interest from Europe, which is encouraging. The widespread electrification of cars and machinery will happen sooner or later, and then we will start to see totally new investors, which is likely to include those from downstream industries.

CEO: Do you have a measure of success?

HS: There is no exact figure we are working towards.  Traditionally, the investment level into metal mining has been quite moderate, peaking in 2008 at close to €1bn, and now standing at between €200m and €400m. Strategically, our aim is for more diversified investment, which is directed more towards greenfield exploration or project development.

Globally, Finland’s mining profile is now much higher, with interested parties increasingly aware of the geological potential, regardless of where we are in the economic cycle.

CEO:Do you believe the public and private sectors are working in harmony to help realise mining’s potential to be an integral driver of the Finnish economy?

HS: Directly, the mining industry contributes €1.5bn annually to the Finnish economy, but the services and technology associated with it means we can multiply that by at least ten. Meanwhile, if you add the downstream industries dependent on those raw materials, the figure is far higher still, while the huge growth in battery production to feed the electrification revolution is sure to mean mining’s star will rise further.

As to public-private relations, these are exceedingly good. The advantage of a small population is that parties generally know each other and have experience of working across both sectors.

CEO: Do you sense a change in focus across the mining fraternity in Finland with batteries and electrification being the buzzwords of the moment?

HS: We have put more efforts into assessing the potential of cobalt-nickel in the country, as there is likely to be a deficiency of supply in the near future, a situation we are well placed to remedy.

However, as electrification continues, we need more of all metals, not just those related to batteries.

CEO: Is the mining investment process driven by electrification likely to yield different types of investors?

HS: Yes, as downstream players are concerned about access to raw materials and to ensure security of supply they will be interested to invest in that first part of the value chain around raw materials and chemicals.

Yet, the investment process takes as long as it takes, regardless of where the metals are being used, for securing permits and developing the appropriate technology takes time.

CEO: Is there optimism concerning prospects around precious and base metals?

HS: Very much so.  Anglo American, for example, have earmarked a project in northern Finland, that is both high grade and where all the figures published to date look wonderful. Moreover, this new find was discovered after very systematic geological interpretation and exploration that targeted very carefully and dropped out anything that didn’t meet the criteria.

CEO: What were the key takeaways from the team of analysts’ recent visit to Finland?

HS: While they are global mining experts, this traditionally equates to Canada and Australia, and so they were not fully aware of all that Finland has to offer. In addition, a lot of them came from Europe, which is great for Finland, as we are looking to court our nearer neighbours, and the analyst team have been very prolific in terms of reporting and writing articles.

CEO:In terms of the Geological Survey of Finland (GTK) offering advice to attract investors, what form does that take, if any?

HS:  GTK is a government organisation providing services to the private sector, especially in the form of interpretation, where we closely cooperate with companies both new and established.  While we don’t suggest which investments to back, as part of a policy of neutrality, we advise interested parties to come to GTK first to look at data sets, test the ground, then thereafter cooperate with our network of private companies working across a range of specialities in the mining arena. If an investor has two or three targets, we can assist in interpretation, but it is their decision which horse to back.

CEO: How do you see things evolving over the next decade? 

HS:  It looks very positive, while marked less by such extreme growth. Diversification will be the key narrative, due to the growth of the battery sector influencing things.

Meanwhile, changing attitudes will also begin to make an impact, as the mining industry gets closer to the consumer. People are increasingly environmentally aware and caring more about the provenance of things, including where their raw materials come from. The mining industry is responding, and so I think we will start to see the attitude to it changing from those currently opposed to the practice.

For more information: www.miningfinland.com