XII Mining conference ESTONIAN MINERAL POLICY

Case:

Raw materials and industry in Scandinavia Friday, May 3rd 2013 Pekka Suomela FinnMin

What’s up in Finland today?

• Mining industry is boomingAlso tomorrow?

• Need of human resources with qualityAnd we know that?

• Metals Industry in Finland• Dialogue with regulators and authorities• Expectations for the future are bright but

some clouds....

What FinnMin?

• FinnMin is a recognized representative of the Finnish metals and minerals mining industry

• The association's main objective is to promote the industry and to maintain its relations with National and European institutions at all levels

• FinnMin also fosters contacts with the mining community in Nordic countries and in Europe

Mining in Finland:

• 12 metal mines in operation in 2012• 31 active industrial mineral mines • Total turnover of the mining industry in

2011 was about 1,5 billion €

1.3.2010

I. To contribute to the increase of employment, economic growth and welfare through vital mineral sector

II. To find solutions to global challenges of raw-material chains through Finnish innovations

III. To decrease total environmental impacts of mining industry

Main targets for the Finnish mineral strategy

Long term trends in copper, nickel & uranium grades

7.10.2011 7

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1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

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Kansainvälisesti Suomimilj. € US $ milj.

Malminetsintäpanostus kansainvälisesti yhteensä sekä Suomessa 1995-2012

Suomi vasemmalla (lähde TEM)

kansainvälisesti oikealla asteikolla (lähde Metals Economics Group)

Lähde: Tukes 2013Kaivokset ja yhteiskunta:

18.3.2013, Ossi Leinonen, Terho Liikamaa 8

19501953

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MetallimalmitKarbonaattikaivoksetTeollisuusmineraalit ja muutYhteensä

Ore mining and mineral quarring 1950-2012 (milj. tn)

Lähde: Tukes 2013

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Sweden’s share of EU27’s total mine production of gold 2002–2011.

EU27 in redSweden in blueGold, tons

25 20 15 10 5 0

Operating in Nordic Regions

Low sovereign risk Long history of mining No mining royalties Low corporate tax rate (Sweden -

26.3% Finland - 24.5%) Major mining, smelting and mining

equipment industry Finland rated best country for mining

investment - ResourceStocks 2011 World Risk Survey

Pampalo Gold Mine - completed on schedule and in line with budget

Investment 20 M€ in line with the budget

Commercial production commenced Feb 2011 as scheduled

Currently employing 80 own + 30 contractors – 70 % locals

Plant Nov 9 2010Plant Feb 2, 2010

25th May 2011

Start Oct 22,2009

Plant Jan 11.2011

14

Strong focus on Health-Safety-Environment

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LTIFR

LTIFR= accident number / 1 000 000 working hour

Pampalo safety statistics - LTIFR

Endomines

Contractors

Total

Average LTIFR in Finnish mining industry was 25 for the period 2008-2011Own personnel 550 accident free daysContactors 200 days accident free days

Kittilä Mine: Areal View

Personnel

April 2012

Management 12

Senior Staff 51

Staff 72

Operators 305

Contractors 180

Agnico-Eagle Finland Oy Contractors Total

Geology 20 97 117Mine 179 23 202Mill 54 1 55Maintenance 93 4 97

Administration 73 32 105Projects 5 11 16Exploration 13 12 25AEF 3 0 3Total 440 180 620

Economic Impact on the Region

The economy of the Kittilä municipality is based on two pillars: 1. tourism Tourism provides ca. 1100 jobs for Kittilä residents 42 % of Kittilä’s total manpower resources In total 1800 jobs during high season

2. Kittilä mine Kittilä mine provides 600 jobs Approximately 50 % from Kittilä 22% of Kittilä’s total manpower resources

The unemployment rate in Kittilä is below 10 % on average - during high season 6 %

The Kittilä annual municipal tax income ca. EUR 4 million and equal amount to the state

Annual real estate tax paid by the Kittilä mine EUR 0.25 million

Annual royalty payment to the State will be ca. EUR 3 million

Corporation tax will be ca. EUR 15 - 20 million

Kittilä mine’s B 2012 turnover is over EUR 190 million – Tourism’s turnover is ca. EUR 200 million.

Kittilä Population

Kittilä Mine

Key task for the mineral policy:

How to improve business environment of mining industry in a global context ?

And at the same time take into account the needs and requirements of national, regional and local societies?

In case of Finland

with strong Nordic democratic traditions with high percentage of private land

ownership with high demands of environment protection

21

Special Inputs

Technology

Associated

services

Primary products

Related industries

Consumers

• Ores and concentrates

• Industrial minerals

• Aggregates• Natural stones

and stone products

• Mining machineries• Enrichment technology• Stone processing

machines• ICT • Environmental expertise

• Exploration and junior companies

• R&D and Education• Financing

• Excavation contractor

• Transport• Rock engineering• Design and

Architecture• Energy production• Residential services

• Location and Infra• Mineral resources• Geological data

• Basic metal industries

• Chemical industry• Construction

materials industry• Construction

Finnish mineral cluster

EUROPEAN UNION

VALUATION OF

Economic benefits Environmental impacts and Effects on prosperity

That result from mining activities- Working Paper 138 by PTT

I. Benefits are clearly greater than their adverse external impacts

II. Individual adverse experience by local people can be quite significant

III. Mining projects with their local characteristics are quite different

MINING POLICY and SOCIAL LICENCE

- times are changing

Pro mining

Media headlines in capital letters

Mining tax ?

Puolustusministeri Haglundin tapaaminen 2.8.2012

Thank you!

”Every mine is importantevery mine is different”

Pekka Suomela

FinnMin