Open cast iron mine in Svappavaara, in northern Sweden

Help yourselves, mining companies!

The controversial relaunch of iron mining activity in the far north of the country is a threat to the environment that will only serve the interests of industry, and without bringing in the financial windfall promised by the government, complains Fokus.

Published on 14 October 2013 at 12:29
Open cast iron mine in Svappavaara, in northern Sweden

In the municipality of Jokkmokk in the far north of Sweden, a bilberry wood surrounded by lakes and peat bogs has become a flashpoint for one of the major power struggles of our era.

Sami reindeer herders, tourism entrepreneurs, academics and environmentalists, who have travelled up from the south of the country, are trying to protect, by whatever means, the area known as Kallak from blasting and exploratory drilling. And they are determined to fight on in spite of police intervention.

Ranged against them, many local people consider the mine to be a blessing, and are hoping for a green light from authorities. The environmentalists have also been condemned by the municipal council, which has angrily announced that their methods are unacceptable.

However, [[there is no other way to stop the mining free-for-all that has existed in Sweden since 1992, when the country passed legislation which was tailored to the interests of industry]]. The law aims to maximise the production of minerals. Exploration is completely free, and permits are liberally granted by the Mining Inspectorate under the authority of the Geological Survey of Sweden.

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In practice, and in spite of its brief to ensure compliance with regulations, the Mining Inspectorate functions like a service provider for the mining industry. Its management of irregular drilling that infringed the rights of several landowners in Jokkmokk is an apt illustration of the problems caused by an agency which "wears two hats". Recently, in the wake of further overshoot of regulations, the inspectorate ultimately issued a "final warning" to the company in question, as if it was about to reprimand an unruly child.

Devastation avoided

The planned limestone quarry in Ojnareskogen [a wooded area of the island of Gotland off southeastern Sweden] offers another example. It turned out that a senior member of the Geological Survey of Sweden who was one of the co-authors of the official opinion on the quarry, a document that played a crucial role in the impact study, was also a consultant for Nordkalk, one of the project’s corporate backers. The entire approval process was marred by a series of irregularities, and without the civil disobedience of environmental activists, the forest would have been devastated.

Citizens have no say in planned exploration projects, not even the owners of the land concerned. All they can do is hope that environmental assessment will rule against the company to prevent it from mining. However, the problem is that the environmental assessment is conducted during the last phase of the process, at a stage when considerable sums have already been invested and expectations have already been raised.

[[Politicians are hoping that the boom in mining will boost the Swedish economy, especially in sparsely populated areas]]. In this context, it is all the more curious that state does not demand a greater stake. When a mine comes into service, the state is only entitled to 0.05 per cent of the value of the extracted minerals. By way of comparison, Ghana insists on 5 per cent, India 10 per cent, and the Canadian provinces upwards of 15 per cent in equivalent taxes. For its part, Australia has introduced a specific mining tax that levies 30 per cent on profits.

In Sweden, mining companies only pay corporate taxes, which have recently been reduced, and are also easily dodged by multi-nationals. All that remains are income taxes charged on salaries paid to a workers during the thirty odd years when a mine is in operation. And even at sites where staffing levels are high, the number of workers is rarely more than a few hundred.

‘Monuments to human stupidity’

At the same time, there is heavy public investment in mining industry infrastructure. When the government presented its infrastructure bill last autumn, the prime minister explained that the mines were our equivalent of Norway’s oil. An odd statement when you consider that the reality is quite the opposite. Norway’s raw materials policy specifically aims to avoid a free-for-all in terms of extraction, while promoting long-term benefit to the economy. And it is a logic that has also been taken on board by most mineral producing countries.

Mines that are operated for a few decades can affect the environment for centuries. It is not possible to restore a mountain that has been hollowed out, nor is it ever possible to fully ensure that there are no risks to the environment. Even if the mining companies are officially supposed to clean up after themselves, the state is always the party that has to face the most risks. The clean-up of the Blaiken mine, not far from Storuman [in northern Sweden], which two bankrupt companies left to the state, will cost 200 million kronor [€23m].

In 2008, the Swedish Environmental protection Agency estimated that the current cost of cleaning up former mines and processing their waste would amount to between €230m and €350m. There is no way of knowing how much the future bill for the ongoing Swedish mining boom will be. Whatever the figure, we can continue to assume that the holes that are drilled in some of the last wilderness areas of Europe will one day be perceived as monuments to the stupidity of the human species.

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