Financial crisis at mine in Sweden’s Far North

The first load of ore was extracted from the Kaunisvaara mine in December 2012, and is expected to last 19 years. Photo: David Zimmer, Sveriges RadioA major new mine in northern Sweden is threatened, because its owners have not managed to secure enough investment.

In a press release on Tuesday morning the Canadian Northland Resources firm says that it has not sold enough new shares.

The planned iron ore mine is in Pajala, a town in Sweden’s Far North near the border with Finland. The local municipality has said that the new mine means “a new era” for Pajala, since it is expected to create many new jobs.

Northland Resources is now discussing other ways of funding the mine, together with a group of its investors. “We have a temporary liquidity gap” says the company’s financial controller, Peder Zetterberg.

But stockbroker Oskar Rönneman says to Swedish news agency TT that he does not advise his clients to buy Northlands stock. “The company is suffering a crisis of confidence. The market is not prepared to invest more.” Rönneman, who runs a Facebook group of Northland share owners, says that the mining company has failed to show that it can carry out the project within its proposed budget.

After the news broke Northland shares fell by 20 percent on the Oslo stock exchange. News agency TT reports that they have lost almost all value.

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