Nordic countries - European exploration and mining hub

Nordic countries - European exploration and mining hub

European exploration expenditure is estimated to reach around 400M EUR in 2011. The exploration efforts are to a large degree concentrated to the Nordic countries Sweden, Finland, Norway and Greenland. These countries together with Poland account for 288M EUR, which is estimated to be 2/3 of total exploration expenditure in Western Europe. There are no reliable official exploration statistics available but the European exploration survey by Raw Materials Group (RMG) gives detailed data for all these countries. In addition to the Nordic countries and Poland on the southern shore of the Baltic, smaller exploration programs are underway in the remaining mining countries of the EU: Ireland, Portugal, Spain and Bulgaria. Exploration in other countries such as for example Greece, Austria and Italy is minimal. 

The 2011 expenditure figure is an all time high by far, both for the Nordic countries and all of West Europe. The total figure for the Nordic countries is 231M EUR, which is 13 % up compared to 2010. Compared to the bottom year 2009 when the expenditure was only 146M EUR it is obvious that the exploration sector has established itself on a much higher level than in the first part of the 2000s when exploration expemnditure was hovering between 65-95 M EUR. For 2012 RMG expects exploration to increase by 10-15 % to reach some 450 M EUR of which 265M EUR in the nordic region.

The Nordic countries are cementing their position as the premier European exploration and mining hub. The corollary is that the dominance of the Nordic countries in the mining sector will continue for the next decade or more. Admittedly Poland is among the most important mining countries in Europe with the major copper producer KGHM Polska Miedsz (Polish Copper) but exploration in Poland is limited and most of it done by KGHM in the vicinity of its existing mines in Lubin in Slesia. The likelyhood of finding new green field deposits is to say the least limited in Poland. 

The exploration sector i the Nordic countries is less volatile and more stable than the global industry. Its growth in 2011 is much lower than the global 54 % but on the other hand the downturn in 2009 during the financail crisis was much less dramatic than in the rest of the world. The attractiveness of the Nordic countries has increased all through the past decade and there are many indications that this trend will continue in the next 5-10 years at least: 

  • The Nordic countries and other prospective parts of Europe are underexplored compared to other regions with similar geolgoical endowment in Canada, Australia and West Africa.
  • The infrastructure, both transportlines such as railways and roads and telecommunications are well developed. Further the availability of experienced staff to carry out all phases of exploration is still good.
  • The attitudes of the public and aothorities towards exploration and mining are, in spite of some protests, in general positive in particularin the regions where miing is most important ie the nortern parts of the Sweden, Finland and Norway on the European mainland. The ”resource nationalism”, which is spreading in developing countries have few proponents in Europe. On the contrary the political interest in exploration and mining in Brussels is increasing after a trough in the late 1990s and early 2000s.   

The focus of European exploration efforts have traditionally been base metals (copper, lead/zinc and gold) nickel and PGMs have also been attractig growing interest but the fastest growht has been in iron ore exploration particulary in the Nordic countries. Some potential rare earths projects have also been identified and are explored at present.

Exploration in Europe serves an important role in regional economics. Most of the efforts are made not only in countries far off from the political centre in Bruselles but further in peripheral regions of these countries such as Norrbotten and Västerbotten in the far north of Sweden, Lapland in the Arctic regions af Finland and the easternmost parts of all EU also on the Finnish border to Russia and Finnmarka in northern Norway. In Greenland most exploration efforts are concentrated to the west and south coast. All these regions are areas in which every additional economic activity is important and where unemployment is relatively high and the economy stagnant. In many of these neighbouring regions the importance of mining is such that regional mineral strategies have been developed to make sure that the sector is supported and given reasonable conditions to develop even if the underastanding of the exploration and mining sectors in the national capitals and Bruselles is still in its infancy.

Finland has turned into the most exiting exploration country of Europe during the past couple of years. The dynamics of the Finnish exploration scene is staggering aptly shown duringhte FEM conference held bi-annually in Finnish Lapland. In November 2011 around 1 000 visitrs attended the Xth FEM conference, which was of course a record high participation. During the conference Anglo American announced its new green field copper, nickel, PGM project at Sakatti in nortehrn Finland. The significance of this new discovery was demonstrated during Anglo’s announcment of its preliminary results for 2011: it was the only project highlighted. And it is not the only world class project in Finalnd, Gold Fields of South Africa is reviewing its Arctic platinum project also in northern Finland. In the same region are also First Quantum’s Kevitsa nickel project and Northland Resources’ iron ore project on the border to Sweden. The fromer is planned to come into production in 2012 and reach its full capacity of 10 kt nickel and 20kt copper in 2013. Northland’s production will start in late 2012/early 2013. Canadian Agnico Eagle operates the largest gold mine in Europe at Kittilä while Inmet, out of Toronto, runs the Pyhäsalmi base metal mine successfully since many years. In addition to these juniors there are some 20 locally based and overseas juniors active in Finland: Endomines started its Pampalo gold mine in early 2011 and Nordic Mines plans to take its Laiva open cast gold mine into operation in early 2012. Borth these companies are listed in Sweden. The Talvivaara nickel/zinc/uranium mine is already in operation and is another product of the Finnish mining boom. Among the international juniors are Belvedere Resources, Taranis Resources, Magnus Minerals, Mantle Diamonds, Vulcan Resources, Western Areas, Tertiraly Minerals, Silver Resources and Mawson Resources just to mention a few.  The Finnish Geological Survey has substantial part in these successes in that it generates targets which are auctioned to the private sector to take them further in the value chain.

The situation in Sweden is similar to that in Finland in that both local companies and transational majors are active. Exploration is dominated by the three majors Boliden (base- and preciousmetals), Lundin Mining (zinc) and LKAB the government controlled iron ore giant. All of them have major exploration programmes going since many years and spend significant amounts each. The success rate is, so far at least, not as good as in Finland and the only recent new deposit discovered is the small Svartliden gold mine operated by Australian junior Dragon Mining. The share of junior companies in the total exploration in Sweden is expanding rapidly and they account for some 50 % of the total exploration expenditure and the expansion coninues. There are more than 25 international juniors active in Sweden: Scandinavian Resources, Northland Resources, Beowulf  (iron ore); Tasman Metals (REE); Continetal Precious Metals, Aura Energy (uranium); Drake Resources, Dragon Mining, and Gold-Ore Resources (gold); Avalon (base metals). Among the locally listed companies are: Nordic Iron ore, Grängesberg Iron Ore, Dannemora Minerals (iron ore), Lappland Goldminers, Kopparberg Mineral, Nickel Mountain and Botnia Exploration (base metals and gold).

Activities in Greenland are also running at high speed: In 2011 over 50,000 m of core drilling was made and the number of exclusive exploration licenses increased from 74 to 83 and 94 including current applications.  Greenland attracts interest from all over the world: Tanbreez Mining and Greenland Minerals & Energy are both Australia based. Tanbreez is, as its name indicates, looking for tantalum, niobium, rare earths and zirconium at Killavaat Alannguat, while the latter company is exploring the Kvanefjeld deposit, both in southern Greenland. Ironbark Zinc Ltd is also based in Austrlia and studying the Citronenfjord zinc deposit the far north of Greenland. London mining, listed on the London AIM, is at the final stages of a feasibility study for the Isua iron ore deposit. Angel Mining, likewise based in the UK is exploring for zinc in the vicinity of the defunct Black Angel mine on the west coast of Greenland. The company has alos restarted the rich Nalunaq gold mine in southern Greenland. The originally government owned Nuna Minerals, focusing gold, is now trading on the Copenhagen stock exchange and looking for a secondary listing in Toronto.

In Norway the growth is impressive, almost 100 %  between 2009 and 2011 albeit from a low level of only 6M EUR. The conditions  in Norway for a continued growth in exploration expenditure are now present: A new mining legislation is in place and the focus of Norwegian authorites has shifted from only off shore oil and gas to include also land based minerals. The geology of Finnmarka in northern Norway is an extension of the Fennoscandian shield which starts in Russian parts of Karelia and continues across Finland into northern Sweden. Naturally there are only a limited number of companies active in Norway including the locally owned Nussir (copper), Store Norske Spitsbergen Grubekompani (operates coal mines in Svalbard) owned by the Norwegian government and Stockholm listed Arctic Mining and Sotakmo Silver are all exploring the Karasjok greenstone belt for gold deposits. In 2011 Canada based Dalradian Resources took out exploration licenses over a giant 17,000 km2 large area covering four greenstone belts and a historic sivler mining district. The exploration scene in Norway is getting hot indeed.   

Magnus Ericsson
Raw Materials Group

Source: Raw Materials Group European exploration survey, Stockholm 2012.