Finland’s Minerals Strategy

Efficiently managed and sustainable utilisation of our mineral resources secures the long-term supply of raw materials at a national level, while creating the preconditions for stable regional development far into the future. Expertise in the minerals sector also enables Finland to effectively promote responsible and sustainable management of mineral resources within a global environment, as well as generating opportunities for new international business activities.

Pekka A. NurmiGeological Survey of Finland

Presentation Contents

• Mining sector in Finland 2011• The significance of minerals• Global challenges• Minerals policy in the EU• The Finnish minerals sector• The minerals sector as an opportunity for Finland• Action proposals• Mining in Finland• Green mining

Fennoscandian Shield - Good Potential within EU• Precambrian shield area similar

to Canada & Australia• Long mining tradition• Yet under-explored terrain• Potential for many commodities• Base metals, gold,

platinum metals, iron, high tech metals, diamonds, …

Composite Policy and Mineral Potential RankingFrazer Institute Mining Company Survey 2009/10

Why Finland?

• A mining-friendly country within the EU• Excellent geodata and infrastructure• A favourable and secure investment environment• Significant potential for new discoveries

Current projects 2011

GoldBase metalsDiamondsOther commodities

Mining companies:Agnico Eagle Mines Altona Mining Anglo AmericanBelwedere Dragon MiningEndominesFirst Quantum MineralsGold FieldsInmet MiningLappland GoldminersMondo MineralsNordic MinesNordkalkYara

Exploration companies:Akkerman Exploration B.VKarelian Diamond ResourcesMagnus MineralsMawson Resources Nortec Ventures Northland Resources Taranis Resources Tasman Resources

Active Exploration and Mine Development

Currently 4 new mines under construction

Talvivaara Nickel Mine • Talvivaara Mining Company Plc.

(est. 2004) listed in London and Helsinki

• The largest sulphide nickel deposits in EU

• Discovered by GTK in 1970s• Huge, low grade ore:

1540 Mt @ 0.22 % Ni, 0.50 % Zn, 0.13 % Cu, 0.02 % Co

• € 50 billion contained metals• Ore production 24 mill. tons/a (Ni

30,000 t)• Novel bio-heapleaching technology• 50+ year operation

Talvivaara’s Economic Impact

• Initial investment € 550 mill.• Goverment support € 54 mill.• Annual turn over € 450 mill. (based on

long term metal prices)• Plans to increase production by 50%• Employment: direct 430, indirect 2000• Improves the GDP and employment of

the region• Tax revenue of the Sotkamo

municipality will grow by 40%

Kittilä Mine

• Agnico-Eagle Mines Ltd.• Discovered by GTK in 1986• Resources 6 Moz(180 t)@ 4.5 g/t gold with excellent potential

• Production started January 2009• Initial investment € 115 mill.• Gold production 5000 kg/a with initial plans to double it

• Currently 590 employees

The significance of mineralsHousing

Travel and logistics

Consumer goods

Food production

New energy solutions

Novel technologies

Global challenges

Population growth• In 2010 ca. 7 billion and in 2030 ca. 8 billion

Urbanisation• In 2030 ca. 2/3 of population are

living in cities

Higher living standards and growth of consumption• Housing• Infrastructure and transportation• Agriculture • New energy technology• Information and Communications Technology

Global growth in GDP

Lähde: Handelsbanken, Capital markets 2010

“Population growth, higher living standards and technology development require more extensive and diverse mining activity.”

Copper mine production and population growth

Future scenarios*

Weight of answers in questionnaire that was made for invited stakeholdersand experts of the strategy process

* Based on World Economic Forum´s report:Mining & Metals, scenarios to 2030

Geopolitical landscapestable and ideologically convergent

Geopolitical landscapeunstable and ideologically divergent

Geo-economic landscapefree markets and open borders

Geo-economic landscapecontrolled markets and closed borders

Environmental outlookdecisive and ambitious

Environmental outlookreactive and incremental

Economic outlookstagnation and volatility

Economic outlookstrong cyclical growth

Minerals policy in the EU

• EU member countries consume 25–30% of metals produced globally.

• Metal production within EU is only about3% of global production.

• It is expected that European industries will, for a long time to come, remain vulnerableto disruptions in metal supply and to market volatility.

• The European Commission has taken measures to improve the long-term availability of raw materials through implementation of the Raw Material Initiative in 2008.

• Finnish government has expressed strong support

Minerals policy in the EU

Three pilars of the Raw Material Initiative:

(1) Ensure access to raw materials frominternational markets under the sameconditions as other industrial competitors.

(2) Set the right framework conditions within theEU in order to foster sustainable supplyof raw materials from European sources.

(3) Boost overall resource efficiency and promote recycling to reduce the EU’sconsumption of primary raw materials anddecrease the relative import dependence.

The Finnish minerals sector

Finnish minerals sector in numbers

“Regardless of the location of an underground mine, 70–90% of the technology required by the mine originates from Finland and Sweden.”

Downstream use of mineral raw materials by Finnish industry

“Raw materials extracted in Finland are also refined in Finland.”

The minerals sector as an opportunity for Finland

Promoting domestic growth and prosperity

• The minerals sector has significant potential to further enhance its position as a vital foundation of the national economy.

• Continued development in thesector requires proactive support andcommitment from both the Finnish Government and other relevant public authorities.

• More knowledge on the resources is required and the relevance of the sector should be considered in land use planning and zonation at all levels of the decision making process.

• The expanding and rapidly diversifying Finnish minerals sector has an important role to play in supplying raw material supply both in Finland and elsewhere in the EU.

Solutions for global mineral chain challenges

• Sustained growth in the Finnish mining industry creates a favourable environment for maintaining technological leadership across the whole minerals sector.

• The global increase in consumption ofmineral raw materials, together with growing environmental challenges, offers considerable potential for business activities promoting sustainable utilisation of mineral resources.

• New value chains, technologies and services for both domestic and export markets.

Mitigating environmental impact

• Finland should take a proactive role in implementing the principles of sustainable development throughout the extractive minerals sector, ensuring that mining and processing is compliant with established best-practice guidelines.

• Increasing the proportion of raw materials produced sustainably in Finland represents a significant step towards meeting these objectives.

• Incentives for using environmentally benign raw materials, quality certification for materials and processes and the implementation of penalties through environmental taxes will be among the principal steering mechanisms for guiding reform in the sector.

Mining vision 2020

Volume of metallic ores mined

“Finland has significant known deposits of many critical metals and minerals andconsiderable potential for new discoveries.”

Critical raw materials (by the EU) in Finland

Very important:

ChromiumManganese NickelIronZincVanadium

Critical: Important:

SilverCopperLimestoneQuartzLitiumFeldsparTalcTitanium

CobaltNiobiumPlatinum group metals

Antimony

Graphite

Lantanoidit

Tantalum

Volframi

Magnesite

Molybdenum

TelluriumClay minerals

Minerals sector challenges

• Greater volatility in the demand for mineral resources.

• Deposits are of lower grade, or are located at greater depth.

• Decline in availability of aggregates in proximity to locations of greatest use.

• Extractive operations are limited by competing forms of land use and access.

• Permitting procedures become more complex, and processes become longer.

• Increasingly difficult to recruit expert consultants and skilled labour.

Minerals sector challenges

• New exploration and beneficiation technologies must be developed.

• Water and energy consumption must be decreased.• Emissions and waste need to be minimised. • Utilisation of by-products and replacement materials must

be enhanced. • Automation in the mining industry must be encouraged.• Health and safety issues and workplace atmosphere must

be improved.• Use of rehabilitated sites after mine closure needs to be

promoted.• The general acceptability and perception of the industry

must be improved.• Finnish ownership must be increased.

Priority research areas

• Invisible and intelligent mining• Innovative processes, automation and optimisation• Efficient use of materials, energy and water• Minimisation of emissions• Chemical/biological beneficiation processes• Geodata systems and multi-dimensional modeling• Innovative exploration technologies• High-tech metal exploration and beneficiation• Recycling, new and alternative materials• Environmental impact management and

measurement

Action proposals

Strengthening minerals policy

Securing the supply of raw materials

Reducing the environment impact of the minerals sector and increasing

its productivity

Strengthening R&D operations and expertise

Final results of the strategy process

• Promoting the transition to a minerals economy based on efficient use of material and energy resources throughout the entire cycle from extraction to production

• Discovery and and delineation of new mineral resources and development of appropriate and innovative extraction and beneficiation processes

• Minimizing adverse impacts from the minerals and mining sector through compliance with environmentally and socially sustainable objectives

• Improving safety issues and promote a healthy working environment

• Ensuring implementation of best-practice procedures and seeking long-term solutions for alternative land uses following mine closure

Green Mining - concept

Minerals sector Tekes-program themes

Green Mining

Intelligent and invisible mining

• Innovative processes and enabling technologies• Automation and process optimization• New chemical and biologically mediated processing technologies

New mineral resources

• Exploration technologies• Geodata management• Multidimensionalmodeling• Hightech-metalresources• Beneficiation and use of country rock and tailings

Materials and energy efficiency

Mitigating environmental impacts

Linked research networks

Finland´s Minerals Strategy

This report is available for downloading online mineraalistrategia.fi, or from the Geological Survey of Finland, telephone 020 550 2450 or email: julkaisumyynti@gtk.fi