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The High North – Top Mining Region of the World Conference at Voksenåsen, Norway, November 14-15 2012

Regional impacts of the mineral sector – and regional cooperation By Sven-Erik Österberg, County Governor of Norrbotten, Sweden and Chair of the Regional Barents Council

Excellences, Ladies and gentlemen, Dear colleagues,

It is an honor and a pleasure for me to participate in this important conference. I followed with great interest discussions during the plenary session yesterday. It is not the first and definitely not the last time we are discussing the role and place of the mineral sector in our regional and national economies, as well as intersectorial and interregional cooperation. The highest level of representation during the present conference shows once again the crucial significance of further responsible and coordinated development of the mineral sector as to ensure sustainable long-term growth in our respective regions, and in Europe. I am addressing you today in a double capacity – as a Governor of the county of Norrbotten and as a Chair of the Barents Regional Council. I will thus first briefly share my views about the role of the mining sector in the industrial and societal development of Norrbotten. I will then talk about regional cooperation both with our neighbors in Sweden and with our partners in the Barents Euro-Arctic region. The history of mining in Norrbotten counts more than a century. Considering latest developments, it will continue for at least another century. This is, undoubtedly, very positive for the whole region. Norrbotten presently hosts three industrialbig companies – LKAB, Boliden and Northland Resources, and the number of mining centers will soon reach nine, which - you will all agree, - is a lot for one county, even if it occupies one fourth of the national territory. Many of you surely know already and have heard more than once that LKAB alone produces over 90 per cent of the iron ore mined in Europe. Over the coming five years the company is planning to invest further 5 billion SEK per year, primarily in the existing mines in Kiruna and Malmberget. The objective is to increase production up to 37 million tons of iron ore per year by the year 2015. Boliden operates one of the biggest open cast copper mines on the continent, Aitik mine. 6 billion SEK has been invested in the Aitik mine so far, and it is the mine with one of the highest productivity rate in Europe, with annual production that will reach 36 million tons of ore in a few years’ time. Thanks to successful prospecting, Boliden has now safeguarded ore deposits in Aitik up until the end of 2029. Northland Resources has just opened a new iron ore mine in Kaunisvaara in Pajala municipality. Last month, on October 18th, I personally had an unusual and very honorable task to officially start up the mine by pressing a button to detonate 157 tons of explosives which set 410 000 tons of rock, including 90 000 tons of iron ore, flying up in the air. I can 1

The High North – Top Mining Region of the World Conference at Voksenåsen, Norway, November 14-15 2012

tell you this is not something you do every day ! The mine has been constructed in a record two-year time and is expected to start first shipments of the high-quality magnetite concentrate to the customers already in the first quarter of 2013. But since we have Northland Resources´ CSO, Mr. Karl Axel Waplan, here with us today and since he is going to do a presentation about the successful story of his company, I will not develop this issue further and leave it to the specialist. But let me repeat that the mining industry is flourishing in Norrbotten and everything indicates that it will continue to do so in the coming decades. But what are the implications for our economy and for our society ? Obviously, such a rapid expansion of the mining sector means colossal investments. To give you yet another example – so far 6.5 billion SEK have been invested in the Kaunisvaara project alone. This means new jobs and new business opportunities, not in the least for small and medium-size enterprises, and not only for the municipalities that host mines, but also for neighboring ones. This means boost of the housing construction sector and all related infrastructure – childcare centers, schools, hospitals and so on, which, in turn, means yet new jobs. We also note with satisfaction the efforts that are being undertaken by mining companies to encourage women to apply for jobs. This is very positive indeed. What is needed now is to further boost processing industries as to ensure a more balanced industrial presence in the region and to avoid dependency on the extraction sector alone. Another positive development that I see is the growing cooperation between mining companies and research centers. This conference is dedicated to research and innovation in mining, and we are very proud indeed that Luleå University of Technology (LTU) is playing a crucial role in this area. Thus, for instance, the University is actively participating in an important EU project – ProMine. Together with 27 partners from 11 other EU member states and with the Geological Survey of Finland as a leading partner, LTU specialists are currently working on documenting all potential metallic and non-metallic mineral resources, both known and predicted, within the EU. The project also aims at developing five new, high value mineral-based nano products that will be used in, among others, aircraft and aerospace industry. Furthermore, it is very satisfying indeed that LTU has been entrusted by the Nordic Council of Ministers to be a leading partner in the NordMin project with a total budget of 35 million SEK in order to gather and analyse latest knowledge and to develop best practices as to ensure responsible and sustainable mining in our Nordic countries. We do hope that this project will bring together experts from Northern Europe and serve as a highly needed platform for exchange of knowledge and best practices between the industries, academic circles and politicians. The County Administrative Board of Norrbotten is obviously supporting this initiative and is going to contribute to it in all possible ways. In this regard, let me stress once again – we are very proud that Luleå University of Technology is actively involved in these important tasks and is, by all means, justifying its position as one of the leading technical universities in the world when it comes to research in the field of mining and minerals.

The NordMin project matches well with our initiative to come up with the joint regional mining strategy, together with our colleagues from the county of Västerbotten, which faces similar problematic as Norrbotten. Selected actors in both counties, including local 2

The High North – Top Mining Region of the World Conference at Voksenåsen, Norway, November 14-15 2012

politicians, researches, as well as representatives of the mining industry, have been working together since the beginning of 2011 in order to analyse the existing situation and the influence that the mining sector has on the industrial and societal development in the region, and to come up with a road map for future joint actions, both short- and long-term. Moreover, such a strategy is indispensable in order to ensure that all conflicts of interests that inevitably arise when the mining industry in expanding at such a rapid rate, are being resolved in the best possible way for all parties concerned. Indeed, national legislation in Sweden needs to be adapted in order to provide for a better protection to everyone, whose interests might collide with those of the mining giants. I am talking first and foremost about the indigenous peoples who are indeed a group at risk, when expanding mining fields might undermine traditional semi-nomadic reindeer herding and, by definition, the very traditional lifestyle of the Sami people. May I remind you in this regard that we have 32 Sami villages in Norrbotten. Furthermore, there is also a very real threat to the normal functioning of the space industry in the municipality of Kiruna that needs to keep its 60 000 square meters protected zone around the Esrange space center in order to continue important scientific research, rocket launches and satellite tracking, among other activities, by the way often unique in their kind. Other potential disputes might already exist or arise in the near future. That is why I see it as a direct duty of the regional authorities and my own duty to ensure that mining activities are carried out within the existing legal framework and that this legal framework, when and if needed, is adapted to the rapidly changing context so that the mining sector does not develop to the detriment of the others. It is therefore our ambition to limit the number of cases of eventual conflicts of interests to a strict minimum, and to resolve the existing ones in a timely and efficient manner. Furthermore, the regional mining strategy – that is going to be an integral part of the upcoming national mining strategy – aims, in the long run, at building an attractive and sustainable society and at strengthening well-being in the region, and in the country. Finally, the strategy is also meant to contribute to highlighting the significance of the region, and of Sweden, on the European arena, and to increasing its influence in Europe when it comes to meeting the needs of the European industries in continued supplies of minerals and metals. This final ambition coincides with the priorities of both national and regional chairmanships in the Barents Euro-Arctic and Barents Regional Councils. There is no need to repeat that the Barents region is extremely rich in natural and mineral resources and that there is unfortunately still little recognition of this fact on the European arena. While most looks in Europe, and in the world in general, are directed towards the Arctic, it is important to remember and to remind that the Barents region is an integral part of a larger Arctic region, and that whereas the development of the Arctic is still, in its major part, a matter of the future, the Barents region is already today providing Europe with much needed mineral and natural resources. Allow me a short example. Many of you remember that the EU documented a list of critical raw materials that is being reviewed every five years. A raw material is labeled as critical when the risks for supply shortage and its impact on the economy are higher compared to most of the other raw materials. Practically all of the 14 minerals currently listed as critical, can be found in the Barents region, including rare earth minerals that are utilized in many devices that we use on a daily basis – cell phones, computer memory cards, DVDs, rechargeable batteries and many more. The EU is currently importing almost 95 per cent of the rare earth minerals from China. In general, today EU stands for 20 per cent of the global 3

The High North – Top Mining Region of the World Conference at Voksenåsen, Norway, November 14-15 2012

mineral consumption but produces only 4 per cent. We do have the possibility to change this situation. I can only reiterate what many of my Barents colleagues have stressed in various contexts before - it is our duty to continue lobbying on all levels in order to continue positioning our region as a key provider in Europe of both natural resources and world´s leading technology and knowledge within the mining sector. As our Foreign Minister Carl Bildt said, no less than 80 per cent of the world’s technology for underground mining is estimated to come from here. Barents region is “a resource-rich region in Europe1” in all senses, including the human capital.

Ladies and gentlemen,

I have been acting as a Governor of Norrbotten for over a month now and came to realize that this job requires a lot of “mining diplomacy” which sometimes may even mean that you find yourself walking on a mine field, if you allow me such a comparison. It is thus hard not to agree with our Prime Minister Fredric Reinfeldt when he says that Sweden has a fantastic mining industry. However, regional economy cannot rely only on the mining sector. Even though the prognosis for the mineral branch for the nearest future is positive, it is our duty to ensure development of other industries as well, such as, for instance, tourism and space industry, along with processing industries. Diversity is a key word when it comes to adoption and implementation of regional development strategies. However, I remain confident that through joint efforts and with the good will from all the parties concerned it is possible to ensure that the boost of the mining sector that we are experiencing today in Norrbotten, and in Barents, is beneficial for our people.

Thank you very much for your attention.


Cf. Norwegian Chairmanship Programme in the Barents Euro-Arctic Region during the years 2011-2013. 4