The Kittilä Mine – an Important Player in the Development of Finnish Lapland

The Kittilä mine, owned and operated by Agnico Eagle and located in the Municipality of Kittilä in northern Finland is the largest gold mine in Europe. The mine contributes greatly to the social and economic development of the local community and the Lapland region through taxes paid directly to the government as well as through wages and salaries paid to employees. The mine employs numerous contractors, creates new employment, and makes significant payments to suppliers for goods and services. The mine also contributes to the development of the region though indirect job creation and small business development in surrounding communities, and upgrading of local infrastructure.

The Kittila mine is extracting one of the largest known gold deposits in Europe. It achieved commercial production in May 2009. Open pit mining was completed in November 2012 and the Kittilä mine is now entirely an underground operation.

Traditionally unemployment in northern Finland has been very high and all employment opportunities are welcome. Tourism and businesses supporting the travel industry are an important source of income and jobs in Kittila. Tourism provides some 1,100 jobs, which compose 42 % of the total Kittilä workforce whereas the mine offers over 600 well paid year-round jobs. About 400 persons are employed directly by the mine while the rest are various contractor employees. The current unemployment rate in Kittilä is below 10 %, which is significantly lower than the average unemployment rate in Lapland.

Approximately 90 % of the mine employees come from Lapland, and over 50 % live permanently in Kittilä. Many of them have moved from other locations with their families and this has clearly contributed to the recent population growth in the Kittilä Municipality.

The Kittilä mine is located about 20 kilometers from Finland’s largest ski resort Levi in Kittilä. The mine and the ski resort benefit from each other’s activities and coexist in harmony. Together they are able to offer versatile job opportunities in Kittilä helping families to settle into their new place of residence. The location of the Levi Ski Resort is an obvious benefit and attraction in the recruitment of mine personnel; the mine and its personnel use the services of Levi year-round. This is a boost to the services and benefits all residents of Kittilä.

In 2012, the Kittilä mine paid $ 42.5 million in personnel costs including wages and salaries, income taxes and statutory insurances and social security contributions. Although the direct and indirect economic impact of employee wage spending on local goods and services is not measured by the company, it is an important factor in the mine’s overall contribution to the economy of the Kittilä Municipality and Lapland as a whole.

The company’s policy is, when possible to always buy from local suppliers and vendors to support the community, to stimulate the local economy and minimize the environmental impact of transporting materials from distant locations. By the end of 2012, the total investments made by Agnico Eagle in developing the mine amounted to approx. $ 570 million. The recently started expansion project is expected to increase the capacity of the mine to 3,750 tonnes per day starting in 2015. The total expenditure on the project is expected to be $ 103 million over a three-year period.

Charts below: left - Kittilä polulation; right - Kittilä unemployment rate

Birgitta Brusila, Agnico-Eagle