Nearly 300 people will be laid off as Northland Resources stops operations indefinitely at its iron ore mine in Kaunisvaara, northern Sweden.
Northland made the announcement Tuesday morning, saying it has experienced “extremely constrained liquidity”, with the “recent deterioration in iron ore prices” having made matters worse. The decision to halt operations was made in order to preserve liquidity.
Northland intends to finish delivering the concentrate it has already produced.
Northland, which opened the Kaunisvaara mine at the end of 2012, hopes the situation will turn around and writes that it will keep trying to get long-term financing.
The mine had rejuvenated Pajala by providing hundreds of jobs to the sparsely populated area, according to Swedish news agency TT. However, just a few months after it made its first blast in October of 2012, it was struggling financially.
In August, the company reported a pre-tax loss of over SEK 719 million for the second quarter of the year. In 2013, it was rescued from bankruptcy with capital support and loans from companies like Folksam, Peab, Metso and Norsskenet, which belongs partly to the state-owned LKAB, TT reports.
Related stories from around the North:
Canada: Canada’s Northwest Territories hosts mining conference, CBC News
Finland: Lapland to host Finland’s biggest mine, Yle News
Greenland: Analysis: Implications of Greenland’s decision to allow uranium mining, Blog by Mia Bennett
Russia: Oil companies push ahead with plans in Russia and Canada while sidelined in the U.S., Blog by Mia Bennett
Sweden: Thunderstorms in Arctic Sweden cost mining company, Radio Sweden
United States: Is Alaska getting its fair share from mining?, Alaska Dispatch