Tapojarvi, year 2022

future

CEO’s review

While reading last year’s report, I felt that the streak of unusual years is never-ending. The year 2022 began with the prolonged impact of COVID-19 and the start of the horrific crisis in Ukraine. Tapojärvi, too, has felt the impact. We faced difficult times when mines and steel mills were forced to cut costs following the energy crisis.

In late 2022, the situation escalated and we had to reduce personnel by launching extensive co-determination negotiations. We were able to find work at other sites for short periods of time. Once again, the Tapojärvi team proved outstanding by showing great resilience and flexibility under these challenging circumstances.

In Italy, we achieved our environmental goals, although we are lagging behind our economic targets. Our CE marked slag products will enter the market in 2023, making our investment in the industrial circular economy profitable in the near future.

As I am writing this, the first quarter of 2023 is coming to an end. Keeping a close eye on the economy and reviewing our efficiency continue to play a key role.

The founder of the company, Esko Tapojärvi, taught us to make economically sound but bold decisions. This advice will help us overcome these difficult times.

Esko Tapojärvi 4 October 1933 – 27 February 2023

TAPOJÄRVI IN BRIEF

Tapojärvi is a Finnish family business with a history dating back nearly 70 years. We specialise in mining and mill services and circular economy solutions.

Tapojärvi operates as part of an industrial-scale circular economy, constantly processing millions of tonnes of industrial by-products and innovating new solutions for the mining industry.

Tapojärvi’s mill and mining services reduce the burden put on the climate and save virgin natural resources.

It is important to us to produce environmentally sustainable products and services. Sustainability and safety are at the heart of Tapojärvi’s operations.

Tapojärvi consists of a total of seven companies. The following

FOUNDED IN

1955

are group companies: Tapojärvi Oy, Tapojarvi Italia S.r.l, Tapojärvi Sverige Ab and Hannukainen Mining Oy. Tapojärven Kiinteistöt Oy is an affiliated company that builds and manages real property.

Sustainability and safety at the heart of operations

Recurso Oy is a fleet management company that works in close cooperation with Tapojärvi Oy. It buys, sells and rents machines for the use of Tapojärvi Oy and its subsidiaries. This annual report focuses on the activities of our Group members.

In 2022, Tapojärvi operated in six mines and three steel mills in Finland, Sweden and Italy.

We own three concentrators, two of which produce services at the Outokumpu Tornio mill. The third concentrator operates at Acciai Spesiali’s mill in Terni, Italy.

Tapojärvi also has dozens of ongoing collaborative projects focusing on new technology and business solutions for the needs of different industries, such as the forest industry and electronics industry. With solid financial and material resources, Tapojärvi strives to maintain profitable business activities in the long term.

PERSONNEL TURNOVER

759 MEUR 163.6

2022 IN FIGURES

KIERTOTALOUDEN LIIKETOIMINTAMALLIT

CIRCULAR BUSINESS MODELS

RECOVERY OF METALS

UTILISATION OF SIDE STREAMS

• Transportation and dumping of liquid slag

• Cooling of slag

• Slag concentration

• Material processing services

• Mining of ore and waste rock

• Loading and transport

• Crushing

• Other productive activities

GEOPOLYMER COVER STRUCTURES

WATER TREATMENT SOLUTIONS

REUSE OF CLOSED MINES

STRENGTHS: Competent personnel

VALUES:

REUSE OF PRECIOUS METALS AND CRITICAL EARTH METALS

• WEEE recovery plant

• WEEE recovery service

• Production of aggregate

• Production of fillers

• Production of cement substitutes

Circular economy products and services

• Manufacture of mine closing structures

• Mine backfill

• Production of chemical products

• Productisation of green liquor dregs

UTILISATION OF SIDE STREAMS REDUCTION OF WASTE

CONSTRUCTION INDUSTRY MINING INDUSTRY CHEMICAL INDUSTRY SAFETY

Our innovative approach to utilising industrial by-products ensures higher availability of raw materials now and in the future.

Tapojärvi Group Martti Kaikkonen

2022 HIGHLIGHTS

JANUARY

• Tapojärvi and the Yara Siilinjärvi mine made history with the launch of alliance-type mining service production.

• Tapojärvi’s site at the Kemi mine set a new record for boring.

FEBRUARY

• All Tapojärvi Group companies introduced an ethical whistleblowing channel following the enforcement of the EU Whistleblower Directive.

MARCH

• Tapojärvi donated EUR 5,000 to help Ukrainians affected by the war. In addition, the employees of Tapojärvi Sverige Ab raised over SEK 10,000. The money was donated to Moldova for feeding refugees.

APRIL

• According to our client satisfaction survey, our Net Promoter Score is 56, which is excellent.

59% of our clients prefer working with Tapojärvi over other similar operators.

• Two significant contracts were concluded with Outokumpu concerning the Kemi mine.

• For the first time in years, Tapojärvi had twelve months of no accidents at the Outokumpu production site in Kemi.

MAY

• Installers were trained to use techniques that will be introduced in the automotive industry in the near future. In May, we learned to use an acoustic imaging camera for fault diagnostics.

JULY

• On 14 July 2022, stainless steel slag processed by Tapojärvi in Italy was awarded End of Waste status. The status enables Tapojärvi to register, certify, produce and sell environmentally sustainable slag products.

JUNE

• Hannukainen Mining organised an open day at the envisaged mining area in Kolari. Over 700 people attended the event.

• According to the pulse survey conducted in June, our employee satisfaction is 76/100. 491 people responded to the survey.

SAFETY IS OUR VALUE

AUGUST

• The European Investment Bank granted Tapojärvi a loan of MEUR 18 for reducing the environmental footprint of the steel industry.

• The service contract option between Tapojärvi and Boliden Kevitsa was exercised.

SEPTEMBER

• Tapojärvi Group members Hannukainen Mining and Tapojärvi Oy built a test structure in the envisaged mining area in Kolari for testing new materials used to manage the environmental effects of mining-generated waste rock.

OCTOBER

• Cooper records were broken by Tapojärvi employees. With the Cooper test, Tapojärvi aims to encourage employees to be physically active and take care of their fitness. Each year participants are rewarded with a sports bonus of EUR 100–400 based on the Cooper test fitness level assessment table. Those who show the most improvement are also rewarded annually.

an award in an innovation competition organised by the City of Vantaa.

Geofix can be used to improve road safety and reduce tyre and rim damage. It also makes road maintenance more cost-efficient and reduces the carbon footprint of pothole patching.

• Tapojärvi family day was held at the central repair shop in Keminmaa. The event included a professional skills competition, in which Tapojärvi employees competed with each other in various categories.

• Tapojärvi Group hosted a floorball tournament. The charity event raised EUR 7,249.60 and the proceeds were donated to support physical activity among children and young people in Kolari.

NOVEMBER

• Tapojärvi’s circular economy product family TapoEko Geofix received

DECEMBER

• Tapojärvi Sverige Ab and LKAB extended the current excavation contract. This was already the second extension to the original contract concluded with LKAB.

GROUP MEMBERS

VALUES:

SAFETY

Our way of working does not put our employees, clients or the environment at risk or damage equipment or property.

COMPETENCE

Our operations are transparent and of high quality. All services are delivered immaculately on schedule in a manner that satisfies both the client and Tapojärvi. We keep our promises.

EFFICIENCY

Efficient operations enable growth and reinforce our competence, allowing us to achieve excellent results together. Innovativeness is a cornerstone of our efficiency.

PROFITABILITY

We are always striving to do better. As a partner, we are constantly developing our operations and focus on the essential. We work faster and smarter, focusing on what our client values the most.

Our good reputation is based on our way of working. All Tapojärvi Group members are guided by four core values, which ensure the high quality of our services and products.

TAPOJÄRVI OY

Founded in 1955

Industry:

Employees

597 Turnover MEUR 132.8 Locations

9 Acting CEO Mari Pilventö

Tapojärvi Oy is the Tornio-based parent company of Tapojärvi Group. The company also has offices in Oulunsalo and Kolari.

The parent company’s turnover for the financial period was MEUR 132.8 (2021: 82.2). The profit of MEUR 14 constituted 10.5% (2021: 6.3%) of the turnover. The return on equity was 21.8% (2021: 9.9%) and the equity ratio was 35.1% (2021: 30.8%).

MINING SERVICES

Tapojärvi has service contracts with Outokumpu’s Kemi mine, AgnicoEagle Finland Oy’s Kittilä mine, Yara Siilinjärvi, and Boliden Kevitsa. Our mining services include a wide range of underground and open-pit

mining services.

Tapojärvi is committed to promoting sustainable mining and improving safety culture in its field.

INDUSTRIAL CIRCULAR ECONOMY

In 2022, the company produced services in industrial circular economy at Outokumpu’s steel mill in Tornio and SSAB’s mill in Raahe.

The services in industrial circular economy include industrial services and material processing. The company offers expert and consulting services for the development, environmental certification, manufacture and sales of products made from industrial by-products. Our expert services cover product

development, manufacturing and commercialisation as well as R&D studies and projects, which utilise our own laboratory and analysing services and our partners’ services. Tapojärvi also carries out profitability analyses and feasibility studies.

TECHNOLOGY

Services are produced using over a 450-strong fleet of mobile equipment. The equipment is maintained by a technology team of nearly 100 experts.

In 2022, Tapojärvi focused on improving its performance and preventing equipment-related risks.

mining services, industrial services, circular economy

Tapojärvi Sverige Ab produces mining and support services at the Malmberget mine of LKAB.

TAPOJÄRVI SVERIGE AB

Founded in 2014

Subsidiary of Tapojärvi Oy

Tapojärvi Sverige Ab was founded in 2014 to produce mining services in Sweden, as one of the Group’s long-term strategic objectives was to expand its service production to other Nordic countries. Tapojärvi has been producing mining services in Sweden since 2017. The company aims to constantly improve its operations. Safety, quality, profitability and employee satisfaction are key performance indicators in the production of mining services. In 2022, the company employed a total of 53 people. The team of Tapojärvi Sverige Ab represents multiple cultural backgrounds: Finland, Sweden, Brazil and Moldova.

Industry: mining services

MINING SERVICES

Employees: 53 Locations 1 CEO Mari Pilventö

Tapojärvi Sverige Ab produces mining services at LKAB’s mine in Malmberget. Tapojärvi is responsible for mining tunnels and supporting structures, among others. In 2022, the company achieved great results in safety work at the Malmberget mine.

“At Tapojärvi, safety is a team effort where we try to find ways to do better together with our employees and client companies. In particular, we have been praised for how we report and process safety observations,” says Production Manager Miika Miettinen from Tapojärvi Sverige Ab.

TECHNOLOGY

Tapojärvi’s technological development efforts include the analysis of machines and equipment. Technological development increases production security and productivity, diversifies work descriptions and reduces the industrial sector’s impact on the environment. With the equipment in good condition, we can offer more comfortable, clean and ergonomic working conditions.

TAPOJARVI ITALIA S.R.L

Founded in 2018

Subsidiary of Tapojärvi Oy

Tapojarvi Italia S.r.l is a company founded in 2018 and based in Terni, Italy. The company is specialised in the processing of materials used in the steel industry and the productisation of industrial side streams.

Industry: industrial services, circular economy

Employees: 102 CEO

Martti Kaikkonen

The slag treatment process developed by Tapojärvi and the state-of-the-art stainless steel slag treatment plant enable the separation of metals from steel mill slag as well as the commercialisation of various industrial side streams. New products launched on the market can be utilised by cement mills, concrete manufacturers, asphalt plants and companies working with calcium products, among others.

The processed materials are CEcertified and comply with valid regulations.

YEAR 2022

The slag products of Tapojarvi Italia were awarded End of Waste status on 24 August 2022. In order to receive this status, slag-based products must go through extensive chemical and physico-mechanical testing. In addition, the production cycle and the related processes must be designed and defined in detail. Our results met all the current parameter requirements. Tapojärvi produces slag-based filler, sand and crushed slag.

Our business operations have many positive effects on the environment, the main ones being:

• less landfill waste

• reduced environmental effects of the mining of natural resources and raw materials (reduction of carbon dioxide and soil consumption)

• improved environmental sustainability

The process developed by Tapojärvi saves natural resources by decreasing significantly the need to produce aggregate from virgin raw materials. Efficient use of materials and recovery of valuable raw materials generate savings to our clients.

“We create new technological solutions for sustainable mining and promote the shift to a lowcarbon society.”

Martti Kaikkonen CEO, Tapojarvi Italia S.r.l

The practices of Tapojarvi Italia are based on the principles of transparency and accuracy established in the Group’s code of ethics, which are necessary for facing new challenges. The parent company guides and coordinates its subsidiaries’ strategy work in line with the legal and corporate obligations, taking into account environmental, social and financial aspects.

The development of safe practices, reduction of industrial carbon footprint and the operations of our unique international research centre Eco Innovation are examples of the Group’s efforts to promote an industrial circular economy.

SOLID FOUNDATION FOR A CIRCULAR ECONOMY

The operations of Tapojarvi Italia are based on the competence of its personnel; human resources are the key to growth and creating value in the long term.

In 2022, nearly 90 employees participated in various training courses to expand or maintain their skills. The training activities focused on diversifying our employees’ technical skills and special skills with the aim of supporting and maintaining their performance and ensuring continuous professional growth in their respective fields.

HEALTH AND SAFETY

For some time, the company has initiated all the necessary measures to create safe workplaces pursuant to relevant legislation. In the area of occupational health and safety in particular, preventive measures have been taken as new equipment and concentrator sections have been commissioned.

In 2022, the company’s safety culture was promoted by organising special training for this specific purpose. In addition, English language courses were organised to improve

communication between our Italian colleagues and Tapojärvi Oy’s Finnish technicians and experts.

In 2022, there were four accidents which did not cause permanent damage and lasted on average no longer than fifty days.

Tapojarvi Italia received no reports of workplace bullying or harassment.

On 1 January 2022, the number of employees recorded in the employee register was 78. By 31 December 2022, the number had increased to

102. This increase is a result of the launch of the aforementioned new processes and the completion of new plant sections.

ECONOMY AND INVESTMENTS

In 2022, Tapojarvi Italia invested a total of MEUR 3.4 in physical commodities. The largest investment, worth MEUR 3, was related to second-phase construction of the new concentration plant, to be completed in spring 2023.

Thanks to the new plant section, Tapojarvi is able to commercialise slag-based products, such as fillers and aggregate.

In 2022, the company’s turnover increased to MEUR 11.5 when the slag transportation and processing processes were active at the concentration plant. During the year, the slag processing model was modified and analysed. As indicated by the company’s results, the processing model is still not optimal. According to the management, the improvements being made to the production process, along with the reduction of costs and redefinition of partnerships built with the client,

Arvedi Acciai Speciali Terni, will lead to a moderate loss in 2023 and a positive result in 2024.

CIRCULAR ECONOMY

As a forerunner in industrial circular economy, Tapojarvi aims to step up efforts to develop its process for the utilisation of industrial side streams and recycling of materials, offering an eco-friendly alternative to virgin natural materials.

For this purpose, Tapojarvi Italia has created a uniform process for the certification of steel-slag-based products.

Having achieved the End of Waste status on 24 August 2022, the next steps in the process are Reach registration, CE marking and ISO 9001 and ISO 14001 system

certifications, towards which we are constantly working.

Circular economy is an increasingly important theme in industrialised societies in Europe. We will launch slag-based products on the market in 2023, and they will be used for building road foundations when added to bitumen or cement, as well as for the production of concrete, asphalt and other calciumbased products.

COMMITMENTS

Over the years, Tapojärvi Group’s growing awareness of its social and environmental responsibility has led to the current business model that aims to balance the needs of different stakeholders.

Tapojarvi Italia values the purity of

nature, and its operations are subject to its clients’ environmental permits. The plant in Terni has achieved the environmental objectives set for it. The End of Waste status awarded in August 2022 to stainless steel slag processed by Tapojarvi Italia, and the slag recovery project in itself, was one of the first of its kind in Italy. Achieving this status was an important milestone for the company, the client and the future of the City of Terni. The company has planned its environmental investments by: - managing the registration of waste with a computerised system, ensuring the efficiency of the process, and - preparing a monitoring and control plan concerning the raw materials, side products and intermediate products processed by the company.

INCREASE IN PERSONNEL

35%

INCREASE IN TURNOVER

60%

PROCESSED SLAG

283,933 tonnes

RECOVERED METAL

TAPOJARVI ITALIA S.R.L:

HANNUKAINEN MINING OY

MINE ENGINEERING AND CIRCULAR ECONOMY

Founded in: 2015

Subsidiary of Tapojärvi Oy

Reported mineral reserves: 159 Mt (Fe 30%, Cu 0.18%)

Hannukainen Mining Oy was set up in 2015 to make use of the ore reserves of the Hannukainen ore deposit located in the municipality of Kolari, Finland. The project is at the authorisation and planning stage. The actual production has yet to start. Mining operations are to be carried out mainly in areas that have already been previously mined by other mining companies. The company aims to produce iron, copper-gold and pyrite concentrate. The project involves two open pit mines. At the project stage, the operations of Hannukainen Mining are supported by the entire Tapojärvi organisation.

SCHEDULE

Mine life: 20 years after start of operation

Mining area: 3,000 ha

The mining project is currently at the authorisation stage, which is expected to continue for a few years into the future. The final decision to open the mine will be made after the authorisation stage. The decision depends on the world economy and price development of metals. The mining company submitted its mining permit application in April 2022. Due to the new administrative practices of the Ministry of the Environment’s Administrative Branch, the company will provide more detailed plans for its environmental permit application in 2023.

ECONOMY

CEO: Mari Pilventö

The initial investment in the Hannukainen mine will be MEUR 300, which will be used to build the concentrator, water treatment plant and infrastructure. The plan is to outsource services to local businesses. In the permit applications, the estimated annual net turnover is MEUR 203, i.e. a total of nearly MEUR 3.850. The turnover was estimated using prices per tonne based on long-term averages.

“In Kolari, we have one of the largest known unutilised iron and copper reserves in Europe.”

Mari Pilventö, CEO

NEW SOLUTIONS FOR THE MINING INDUSTRY

In September 2022, Hannukainen Mining and Tapojärvi built a test structure in the envisaged mining area in Kolari for testing new materials used to manage the environmental effects of mining-produced waste rock. These activities are related to the TYPKI project, the objectives of which include developing solutions to stabilise nitrogenous and sulphate-containing mine water by using side-streambased concrete or cover structures. According to the project plans, the

concentration process will generate strong mine water, which will be purified in a water treatment plant.

For the testing, the site will use synthetic water resembling mine water to produce alkali-activated slag.

The slag will be utilised in concrete production. When mine water is used, slag binds it during the process. Thus, the process doubles as the final treatment process for concentrated mine water. The aim of the project is to test technical working methods and the structure for covering the waste rock area in practice.

For the purpose of the actual implementation, technical properties, such as water and oxygen permeability, hardening, stability, resistance to weather and workability, are tested.

“This is something completely new in the mining industry,” says Emeritus ProfessorKauko Kujala, who visited the site.

Kujala was consulted about the site structures. He uses the results to create geotechnical models to help in estimating the functionality of the cover structure on the site.

ORE PROSPECTING

Ore prospecting is carried out around the mine envisaged for Kolari and in Kelontekemä, Kittilä. In Kolari, the emphasis is on IOCG prospecting, in which the most important minerals prospected are magnetite and copper pyrite. In Kelontekemä, Kittilä, mainly gold and copper have been prospected.

The methods used include modelling and analysing old documentation, geophysical measurements and diamond boring. In 2022, EUR 19,500.60 was paid in ore prospecting fees.

INTERACTION

Hannukainen Mining supports local and neighbouring municipalities’ club activities with emphasis on improving the well-being of children and young people and creating diverse recreational opportunities. In addition, the company promotes environmental and cultural activities and organises leisure activities for its employees and their families.

The company communicates actively with its stakeholders.

The company’s communication channels include telephone, email, discussions, electronic newsletters,

COOPERATION WITH STAKEHOLDERS

2022

IN FIGURES

1,084 visits to Vänkätupa

3 information events

6 public/fair events

740 visitors on open day

30 feedback conversations

9 electronic newsletters

20 web articles newspaper advertisements, bulletins, websites, videos, regional economy reports and project brochures.

Stakeholders can give feedback via several channels.

Hannukainen has a feedback processing system. All appropriate feedback is answered and, if possible, used in developing the way the company operates.

In 2022, Hannukainen launched a cooperation forum for its key stakeholders, including the municipality, reindeer-grazing associations, business organisations, village associations and tourism businesses and organisations, led by an external consultant. The cooperation forum did not achieve its goals, because the local

tourism businesses and organisations did not want to participate in the activities.

In June, a family event was held at the envisaged mining area. Over 700 people attended the event.

In late 2022, Hannukainen held separate information events for three target groups: landowners, Hannukainen villagers and the general public.

In addition, Hannukainen personnel participated in several events, such as trade fairs and public events.

The Kolari office, Vänkätupa, was open on Mondays, a total of 36 times.

INDUSTRIAL-SCALE ENVIRONMENTAL ACTIONS

SUSTAINABILITY AT TAPOJÄRVI COMPANIES

IMPACT

Tapojärvi believes in honest business operations. We are committed to following applicable laws and regulations and making sustainable, ethical decisions. We produce services for various industries and plants. Our production is planned according to the client’s environmental permits and requirements. Our operations have both negative and positive effects. Negative effects are generated by emissions, noise and dust, for example.

Positive effects are generated when we turn industrial by-products into new circular economy products and services. The productisation of industrial by-products and utilisation of recovered materials help replace products and applications made from virgin materials and reduce the amount of materials destined for disposal.

By separating and recovering metals, we can conserve natural resources. No landfill waste is generated, and the need to produce aggregate from virgin resources is reduced significantly.

Hannukainen Mining is participating in several environmental projects, such as the programme to make Finland a forerunner in the

sustainable extractive industry. In accordance with the sustainable mining system, we are committed to adhering to operating principles that are sustainable for the natural environment, people and the economy. Sustainable mining operations cover the entire project lifecycle, from prospecting to closing the mine and follow-up actions.

YEAR 2022

In 2022, we decided to start improving our sustainability efforts systematically. We have previously worked hard to improve safety, personnel, environmental and emission issues but aim to take a more holistic approach to these matters in future. For the first time ever, we conducted the EcoVadis sustainability assessment and earned a bronze medal. Our areas for development included procurement, use of indicators, and emission calculation. For a few years now, we have been analysing the level of direct carbon dioxide emissions from our own operations (Scope 1) and emissions associated with the purchase of electricity (Scope 2) following the materiality principle. At Tapojärvi, the most material emission sources are fuels, electricity and district heating, which constitute 97–98% of our carbon

footprint. In addition, we have looked into ways to cut our emissions. Due to the nature of our operations, the technology and fuel products chosen together with our clients play a key role in reducing our emissions. As for the quality of our operations, we have concentrated on continuously improving our activities, establishing uniform procedures and process documentation practices, and utilising our production control system. There is still plenty of unutilised potential in terms of process development.

DEVELOPMENT NEEDS IN THE NEAR FUTURE

In 2023, we will conduct a materiality analysis, with a focus on sustainability, and prepare a sustainability road map. We will calculate our emissions in more detail, especially with regard to indirect emissions (Scope 3). We will concentrate on improving the quality and productivity of our operations. Our other future development needs include:

1. Development of sustainability in a way that supports production

2. Keeping up with digital development and ensuring modern competence needs

3. Utilisation of data-based information and metering

4. Commercialisation of RDI projects

“The benefits of circular economy services provided by Tapojärvi are directly reflected in environmental effects, employee well-being, safety and the economy.”

Seppo Ahola, Innovation Director

28 TEAM OF EXPERTS

RESEARCH AND DEVELOPMENT

Tapojärvi’s sales and development team forms a research centre that offers expert and consulting services for the development, environmental certification, manufacture and sales of products made from industrial by-products. We study and seek new product and business opportunities from industrial circular economy for the steel, forest, construction, chemical, electronics and mining industries by, for example, utilising the side

streams of these industries. The role of the sales and development team is to develop a process that transforms waste into products and give a new life to materials previously known as industrial waste. Our sales and development work covers product development, manufacturing and commercialisation. We also conduct R&D assessments and projects utilising our own laboratory and analysis services as well as our partners’ services. We conduct profitability analyses and feasibility studies for our projects, including financing and intangible rights.

In 2022, 28 Tapojärvi experts worked on various projects in the sales and development team. Every research team and project is tailored to specific needs. Each project is assigned experts from relevant fields. Our research expertise includes mineralogy, metallurgy, process engineering, chemistry, geology and environmental sciences. We also have access to our partners’ expertise.

In 2022, the sales and development team advanced three spearhead projects, which focused on the manufacture and productisation of industrial side streams.

32 GROUPS OF PROJECTS

65 ONGOING PROJECTS

6 MEUR TO R&D AND PROJECTS

ENVIRONMENTAL IMPACT OF PRODUCTS

PRODUCTISATION OF GREEN LIQUOR DREGS

GEOPOLYMER STRUCTURE

Tapojärvi produces geopolymer structures from industrial side streams. The product's material properties can be optimised for each site using the binder formula. The product has been researched and tested at different mines in Finland, including Arctic conditions.

Made for demanding surface structures and foundations, the geopolymer structure is a safe product with a small carbon footprint.

BENEFITS

• Sustainable

• Low water and oxygen permeability

• Utilises industrial side streams

• Small carbon footprint

• Cost-effective

• Material properties optimisable

GEOFIX®

Geofix is a fast-setting patching material for pothole patching developed by Tapojärvi. The product can be used to improve road safety and reduce tyre and rim damage. It also makes road maintenance more cost-efficient and reduces the carbon footprint of pothole patching. The inorganic geopolymer material doesn’t contain oil-based raw materials, which makes it more environmentally friendly than traditional asphalt patching products.

BENEFITS

• Usable in sub-zero temperatures

• Quick to dry

• Easy to use

• Utilises industrial side streams

• More environmentally friendly than traditional asphalt patching products

TAPOFIX®

TapoFix is Tapojärvi’s fibre-based, biodegradable dust-binding and stabilisation material, which reduces the amount of dust, decreases the effects of frost damage and improves the load-bearing capacity of gravel roads. TapoFix is made from fibre sludge and fibre clay generated as by-products in the production of pulp, board and paper.

BENEFITS

• Absorbs moisture from the air

• Biodegradable

• Does not dissolve with rain or irrigation water

• Does not affect groundwater

• Non-corrosive

• The fire load is so low that underground use does not cause a hazard

• The bonding capacity is restored after the product has dried, when there is enough humidity

UPM’s pulp operations and Tapojärvi Oy are cooperating to utilise the side streams of paper and pulp mills in a new project, in which UPM’s unutilised side streams are developed into various low-carbon cement products. The new circular economy products will reduce the carbon footprint of the construction industry, for example.

WEEE RECOVERY PLANT

The production of the WEEE recovery plant developed for the global market is based on hydrometallurgy. The WEEE recovery plant recycles precious metals and critical materials. Materials such as gold and copper can be used directly as industrial raw materials.

The innovative plant was developed by circular economy experts Alva, Tapojärvi and Elker.

Tapojärvi also offers the recovery of WEEE as a separate service.

ECO INNOVATION RESEARCH CENTER

Tapojärvi’s Eco Innovation Research Center offers expert and consulting services for the development, environmental certification, manufacture and sales of products made from industrial by-products.

dreds of thousands of Finns, inspire innovations and strive to develop a more sustainable world.

Tapojärvi’s key stakeholders are clients, owners, personnel and authorities as well as equipment, machine and material suppliers, financiers, development partners, and audit firms. The focus areas of Tapojärvi’s sustainability work are realised through the main impacts of the company’s services and stakeholder expectations. Tapojärvi’s operations have significant impacts, especially on its employees, the growth and development of its clients, and the environment.

We are committed to transparent and open communication. We encourage our employees to report their concerns. Employee satisfaction is measured on a regular basis.

CLIENTS

Our clients are major industrial companies and mines. Tapojärvi is a responsible partner who ensures occupational safety, produces highquality services and knows the client’s line of business and its needs.

We carry out regular client satisfaction surveys and meet our clients on a regular basis.

In 2022, we communicated with our clients both face to face and remote-

ly. Tapojärvi also participated in trade fairs and various client and partner network events.

COMMUNITIES

For Tapojärvi, it is important to contribute to well-being in its locations and neighbouring municipalities. Local growth is supported by concentrating service and material purchases

to local businesses. In addition, Tapojärvi invests in the areas surrounding its industrial areas. In 2022, Tapojärven Kiinteistöt began the development of a terraced house in Siilinjärvi, near the Yara Siilinjärvi mine.

We participated in the Confederation of Finnish Industries’ Good Company campaign. Good companies pay necessary taxes to society, employ hun-

Tapojärvi has been involved in numerous working groups and networks to share its knowledge for the benefit of the industry and local businesses, supporting a more vital and vibrant environment.

Tapojärvi has participated in the activities of the Kemi Circular Economy Centre and uses its knowledge and services to boost the industrial circular economy cluster in Lapland.

Tapojärvi is also involved in the activities of organisations in the extractive industry. For example, CEO Mari Pilventö is a member of the Board of the Finnish Mining Association. Tapojärvi contributes to its networks free of charge.

Through the success of its clients, Tapojärvi can further support the local business community and employment growth.

SPONSORSHIPS

During the financial period, Tapojärvi Group donated over EUR 74,000 to support the recreational activities of local organisations and schools. By supporting local organisations, we help ensure that local children and young people have opportunities to engage in diverse recreational activities.

IT’S GREAT TO BE A TAPOJÄRVI EMPLOYEE

SAFETY IS OUR VALUE

SAFETY

Safety is one of our key values. We always prioritise safety in all our operations. For Tapojärvi companies, a safe place to work is everyone’s right. Our goal is to have zero accidents occur at our workplaces.

Safety is an element of professionalism, high-quality mindset and efficiency.

SAFETY OBSERVATIONS

7351

SAFETY SESSIONS 1193

We strive to establish a positive safety culture, work closely with our clients and partners, and are constantly improving our processes and practices. We work towards improving occupational safety in the long term. Every employee is trained to use safe working methods and required to complete our safety induction training before starting work at our sites.

ENCOURAGEMENT AND ACTIONS

hold regular safety sessions and tours. We report and investigate all occupational accidents as well as serious incidents and share the lessons learned from each case with all our sites and Group members in order to prevent similar incidents in the future. Our everyday operations are guided by our safety principles, standards, guidelines, and basic safety rules.

A total of 7,351 safety observations were recorded during the year. Our objective is to have every employee report at least one observation every month. Currently, we are close to this target in our operational activities. All observations are processed, and the head of each business unit is responsible for implementing any corrective measures.

SAFETY TOURS 1920

The key themes of our safety management are proactive safety work, risk identification and assessment, intervention in unsafe work practices, and the entire personnel’s commitment to our safety principles. We encourage our personnel to report their safety observations and

YEAR 2022

In 2022, we continued to promote a preventive safety culture. Approximately 80% of accidents involving our personnel are hand injuries. In September, we launched a campaign to increase awareness of hand-related risks and the importance of last-minute risk assessment. The campaign highlighted tasks, practices, requirements and procedures related to daily or weekly activities from the perspective of preventive safety work. No serious occupational accidents occurred in 2022. Our TRI rate increased to 7.5 (3.58), i.e. we did not reach our intermediate target level of 2.5.

In 2022, we held 1,193 safety sessions and 1,920 safety tours. However, not all safety tours were recorded in our management system. Keeping the system up to date regarding safety measures is one of our shared everyday goals.

EVERYDAY SAFETY

Based on employee satisfaction surveys, our people see safety and our efforts as a strength and are committed to safety work. We aim to maintain this commitment in our everyday activities.

Our safety management focuses on establishing best practices and sharing them between Tapojärvi locations.

PERSONNEL

Everyone is equal at Tapojärvi. Every employee is a member of the Tapojärvi family. Tapojärvi encourages its personnel to get trained, innovate and develop themselves and their work community as well as the way the company does business.

At Tapojärvi, no one is discriminated on the basis of age, origin, nationality, language, religion, belief, opinion, political activity, trade union activity, family relationship, health, disability, sexual orientation or other personal characteristic.

Employee diversity is taken into account in management and supervision, and we ensure equal opportunities for all job applicants.

Our induction training is sensitive to different cultural and linguistic needs.

We intervene in discrimination and bullying effectively and have

EMPLOYEE SATISFACTION

zero tolerance for any form of discrimination and inappropriate treatment by anyone.

We ensure the fair and equal treatment of our personnel by applying human resource management policies and principles that are openly communicated and accessible to all our employees.

When addressing issues and situations relating to a person, we listen to, respect and trust the individuals concerned.

Tapojärvi’s way of working is based on humanity.

Every Tapojärvi employee contributes to the establishment of a diverse work community and inclusive company culture through their conduct, attitudes and choices. We respect human values and treat everyone with respect.

Providing safe and healthy working conditions and building a functional work community are an integral part of all our operations. Every single employee is entitled to both physical and psychological safety.

SICKNESS ABSENCE RATE

6.62

Tapojärvi’s remuneration policy is fair and based on the demands of the job and individual performance. Regarding matters related to pay and remuneration, we follow relevant legislation, collective agreements and establishment-level agreements.

TAPOJÄRVI TEAM

By the end of the year, the Group employed 759 persons, of whom 577 were employees and 182 officials, work supervision included. The personnel’s average age was

PAID SALARIES AND BONUSES

“What matters is how an employee performs their work and treats others.”

Mari Pilventö

39 years. In relative terms, the largest age group was 35–44-year-olds. Out of the Group personnel, 52% are machine operators, 12% maintenance personnel, 9% work supervisors and 6% process workers.

In 2022, the Group had 205 new hires. 167 persons concluded their employment at Tapojärvi. During the final quarter, financial and production-related reasons forced us to launch extensive co-determination negotiations. Measures had to be taken as the Russian invasion of Ukraine became prolonged and some of our clients had to cut back production following the energy crisis. In addition, some of our service contracts expired at the turn of the year.

DURATION OF EMPLOYMENT

is 76/100. The target set for the 2022 employee satisfaction survey was 80/100. According to the pulse survey conducted in June 2022, the overall satisfaction of Tapojärvi employees has remained unchanged. A total of 491 persons responded to the pulse survey, which was 95 persons more than in autumn 2021.

PERSONNEL DEVELOPMENT

Our orientation and training processes are standardised and described in writing. Every site has trained workplace instructors who participate in separate training days. To assist in job orientation and training, we use our own eLearning environment.

WOMEN, % MEN, % 7 93

PULSE SURVEY

In late 2021, Tapojärvi carried out a Signi employee satisfaction survey. Based on the results, the overall satisfaction of Tapojärvi employees

91% PERMANENT EMPLOYMENT

For the most part, the personnel’s skill level has been satisfactory. Supervisors are responsible for ensuring our personnel has adequate skills as well as for planning and implementing personnel development processes.

PERSONNEL, IN TOTAL 759

As necessary, personnel is provided with internal training or directed to participate in courses organised by other parties. The personnel’s development and training needs are also assessed during performance appraisals.

TRAINING NEARLY EVERY DAY

During the financial period, Tapojärvi personnel had the opportunity to participate in safety training, qualification training, client-organised training and other statutory training courses on a regular basis.

Tapojärvi’s own vocational qualification programme in vehicle services, which began in April 2021, will end in May 2023.

A total of twelve employees in two groups are participating in the training as apprentices. Remote English and Swedish language courses (10 x 45 min) in Teams began in October 2022. In May, the Management Team and managers had the opportunity to participate in two hands-on training courses focusing on the interpretation and application of contracts, contract-related problems and their prevention as well as contractual principles.

In addition to the vocational qualification in vehicle services, apprenticeship training was provided in specialised vocational qualification in vehicle services and first-level management in production. One person completed their techni-

cal training studies. Several theses commissioned by Tapojärvi were completed and started during the financial period. To improve managerial work, a 360-degree leadership assessment was carried out in three groups. A total of 24 people participated in the evaluation. In the process, each participant evaluated their own performance and received feedback from a group of approximately ten evaluators, including their immediate supervisor, colleagues and subordinates.

THE HYBRID MODEL IS HERE TO STAY

Tapojärvi has a positive attitude towards teleworking and flexibility. All our Group members use digital communication channels actively. The hybrid model enables flexible work practices. It is a form of teleworking, in which a person can work both in the office or other business premises and remotely. The hybrid model is adapted on a case-by-case basis, taking into account the job in question.

OVER 700 JOB APPLICANTS

Operations in mining and industrial processes offer a wide range of work opportunities for a variety of professionals.

Tapojärvi is seen as an attractive employer in the industry’s job market. In 2022, over 700 people applied for a job at Tapojärvi. The company received a total of 772 applications. Some applicants applied for more than one job at the same time.

SAFE WORKPLACE

Monitoring of occupational safety and intervention in issues are a part of every employee’s daily duties. We take care of each other and are rewarded for successes.

GOOD INSURANCE

In the event of an accident, you will not be left on your own.

Tapojärvi has taken out statutory accident insurance, leisure time accident insurance and working capacity insurance as an additional benefit for its full-time employees.

EXERCISE AND HEALTHY LIVING

Tapojärvi supports its employees being physically active by covering part of the costs of their hobbies. We also take the cooper test every year and are rewarded for it.

ANNIVERSARIES AND OTHER CELEBRATIONS

We always have cake when there is a cause for celebration! Tapojärvi companies have common rules and guidelines for celebrating employees.

DOING THINGS TOGETHER

Tapojärvi strives to organise various events for employees and their families every year.

A workplace that values its employees and ensures their well-being.

Tapojärvi Oy and Hannukainen Mining’s joint team participated in a charity floorball tournament in September 2022. The proceeds of EUR 7,249.60 were donated to the children and young people of Kolari.

GROWING, RELIABLE PARTNER

ECONOMY AND GOVERNANCE

To bear our economic responsibility, we must ensure our profitability and competitiveness. Profitable and competitive operations enable Tapojärvi to be a productive investment, significant employer, reliable partner and good corporate citizen. As a financially sound company, we meet our stakeholders’ needs, fulfil our social and environmental obligations, and support non-profit activities in our society.

Tapojärvi contributes to well-being in all its service sectors. Tapojärvi’s economic responsibility manifests through new business opportunities and jobs as well as responsible investments in sustainable development projects. We pay salaries and taxes on time. Tapojärvi is constantly aiming to improve the bottom line, efficiency and profitability of both our clients and our Group members.

CORPORATE CULTURE

MANAGEMENT SYSTEM

Tapojärvi Oy’s quality management system complies with standard ISO 9001:2015. In the financial year, an external audit was carried out by DNV

GL – Business Assurance Finland Oy

Ab. The ISO 9001:2015 certificate covers Tapojärvi Oy’s operations and

services in Finland. Our management system was audited by DNV in autumn 2022. In addition, our clients evaluate our ability to implement service contracts. The evaluation categories are occupational health and safety (HS), environmental responsibility (E) and quality production ability

(Q)

in the implementation of service contracts.

RISK MANAGEMENT

Tapojärvi assesses its risk management system and risk factors by analysing strategic, operational, financial and damage risks.

GROUP’S TOP MANAGEMENT

Markku Tapojärvi

- Ownership of Group members

- Chair of the Board of Directors

• Tapojärvi Oy

• Tapojarvi Italia S.r.l

• Hannukainen Mining Oy

- Board Member

• Tapojärvi Sverige Ab

Pertti Tapojärvi

- Ownership of Group members

- Chair of the Board of Directors

• Tapojärvi Sverige Ab

- Board Member

• Tapojärvi Oy

• Tapojarvi Italia S.r.l

• Hannukainen Mining Oy

Tuomo Tuohino

- Board Member

• Tapojärvi Oy

• Tapojarvi Italia S.r.l

• Tapojärvi Sverige Ab

• Hannukainen Mining Oy

Mauri Kauppi

- Board Member

• Tapojärvi Oy

• Tapojarvi Italia S.r.l

• Tapojärvi Sverige Ab

• Hannukainen Mining Oy

Jouko Pakarinen

- Board Member

• Hannukainen Mining Oy

Mari Pilventö

- Acting CEO

• Tapojärvi Oy

- CEO

• Tapojärvi Sverige Ab

• Hannukainen Mining Oy

Martti Kaikkonen

- Ownership of Group members

- Board Member

• Tapojärvi Sverige Ab

- CEO

• Tapojarvi Italia S.r.l

- Chief Operations Officer

• Tapojärvi Oy

• Tapojärvi Sverige Ab

Risks are assessed and managed continuously. The competitive situation in Tapojärvi’s business areas is tough. We mainly operate temporary, albeit long-term contracts. The Group members’ dependency on a limited number of clients can lead to business volume risks, which are manageable.

Technological development and strict environmental legislation can generate opportunities for growth but also pose strategic risks.

The development of solutions for an industrial-scale circular economy involves adapting to new conditions. The authorities often require different kinds of reports or permits from operators. The lack of precedents can hinder the commercialisation of Tapojärvi’s innovative solutions. Operational risks are mitigated by taking out business liability insurance policies, for example.

The company’s equipment has been insured against accidents. The company also has an extensive range of spare equipment to manage the risk of disruption. This risk has been decentralised because the company operates on multiple sites.

YEAR 2022

The year 2022 was one of Tapojärvi Group’s most difficult years in recent history. Our production faced challenges, such as increased costs, delayed deliveries and unpredictable fluctuations in production, resulting from the global political shock, which followed right on the heels of the COVID-19 pandemic.

Despite the challenges, we were able to start new sites on schedule.

In Terni, we are lagging behind in terms of economic goals due to the prolonged construction and

commissioning stage and loose ends relating to the production process. We have reached our environmental goals.

In 2022, the Group’s turnover was MEUR 163.7, profit MEUR 7.2 and equity ratio 30.8%. The Group’s overall investments in the financial period amounted to MEUR 9.6. The majority of this amount was invested in mining equipment. The parent company invested MEUR 16.2 in equipment and the subsidiaries. During the financial period, MEUR 6 was invested in research, development and project activities. Our

RDI activities received financial support in the form of grants (MEUR 0.6) and loans (MEUR 0.8).

99% of the capital stock and 100% of voting powers are owned by the founder family of Tapojärvi. The rest of the shares are tied to employment. Audit firm Ernst & Young Oy has acted

as the company’s auditor. The company’s auditor in charge is Chartered Accountant Jari Karppinen.

NEAR-TERM PROJECTIONS

The company’s business outlook is stable. The market in our area of business is positive, and we see potential for us to grow.

The war and sanctions will likely affect our operations in many ways. The increase in raw material prices is expected to have a positive impact on the profitability of mining companies and projects.

The impact on the supply chains, availability and price of equipment, spare parts and materials is something that requires proactive measures on our part.

TAX FOOTPRINT

Tapojärvi pays, collects, accounts and reports its direct and indirect taxes in

the proper amount at the right time and to the right place, i.e. where the economic activity, increment in value and work generating income actually take place.

Tapojärvi’s operations are guided by economic principles independent of taxation.

Tapojärvi is a proud taxpayer. We pay our taxes in the proper amount in the country of operation in question. You can see our tax footprint in the graph on the right.

COMMUNICATION

Tapojärvi communicates proactively at the Group level. Induction training and working instructions and materials are accessible to all employees. Each company’s activities are reported by location on a quarterly basis.

Tapojärvi’s most important communication channels are meetings, Tapojärvi’s intranet Tavi, on-site information screens and ERP systems as well as other easy-to-use databases, and email.

Once a year our personnel is invited to respond to a survey and evaluate Tapojärvi’s communication and channels of communication. Based on the open-ended responses in the 2022 survey, the Group’s communication is of a good quality, clear and timely.

TURNOVER TREND AND FORECAST, MEUR

DISTRIBUTION OF TURNOVER BY SECTOR

Information is abundant and made available from many sources. The Group has also improved its communication on safety issues.

CONFIDENTIALITY AND DATA SECURITY

Tapojärvi obliges all its employees to maintain secrecy. The confidentiality obligation also applies to interns.

Discussing confidential work matters is prohibited in public and on public transport.

Photography and filming videos is prohibited on construction sites and in workplaces without the management’s and the client’s permission.

Tapojärvi has a proactive and careful approach to data security. All employees are trained to follow data security guidelines, and personal data is processed pursuant to the European General Data Protection Regulation (GDPR). Employees are also constantly instructed to follow appropriate procedures to ensure data security.

In 2022, Tapojärvi organised a data security course.

ECONOMY IN FIGURES 2022 (MEUR)

Tapojärvi Oy - Tapojarvi Italia S.r.l - Tapojärvi Sverige Ab - Hannukainen Mining Oy www.tapojarvi.com