Finland’s Economic Affairs Minister calls for special audit of Talvivaara mining company

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An aerial view of frozen Finnish lake Kivijaervi after waste water began to leak from a nearby mine on November 12, 2012 in Talvivaara. (Kimmo Rauatmaa/AFP/Getty Images)
An aerial view of frozen Finnish lake Kivijaervi after waste water began to leak from a nearby mine on November 12, 2012 in Talvivaara. (Kimmo Rauatmaa/AFP/Getty Images)
Finland’s Economic Affairs Minister Jan Vapaavuori has called for a special audit of the bankruptcy estate of Talvivaara’s mining subsidiary in Sotkamo.

He added that filing for bankruptcy might also be a good option for the parent company Talvivaara. The minister’s cold shower followed optimistic speculations about a possible investor by the administrator handling a restructuring programme for the Talvivaara group.

Economic Affairs Minister Jan Vapaavuori said that a special audit could be in order for both the Talvivaara’s mining subsidiary and as well as its parent company. The mining company filed for bankruptcy earlier this month, however the parent company is still undergoing a restructuring programme.

“It’s such a big, significant and public bankruptcy that to avoid any confusion, everything that has happened up to this point should be carefully examined,” Vapaavuori said Tuesday evening.

The minister said that it’s obvious that a special audit is required for Talvivaara Sotkamo, adding that the right timing would most likely as part of a public receivership process. A bankruptcy estate settlement is usually conducted by the estate administrator and the company’s creditors. In the case of a public receivership, a report by public officials replaces the settlement report prepared by a private administrator.

Special audit would clear the air

A special audit may be requested in cases where a company is suspected of not managing its finances incompliance with existing laws and regulations. This audit is usually conducted during bankruptcy or restructuring proceedings.

“I don’t necessarily suspect anything, but these are such large and messy cases that it would be appropriate to handle matters this way, just to be sure and to avoid later speculation that something may have happened that could not stand up to scrutiny,” he observed.

Vapaavuori said he believed that an audit would clarify the situation with respect to the company’s search for possible future business partners. He said that he agreed with the view of the government’s ownership steering chief Eero Heliövaara, who said that the Talvivaara parent company should also file for bankruptcy. He said that if this were to happen a special audit would also be in order at that time.

“It would be easier to find a long-term solution if both companies filed for bankruptcy,” he concluded.

Minister: Don’t get carried away

Speaking in Parliament earlier on Tuesday, Economic Affairs Minister Jan Vapaavuori called for restraint over the comments of Administrator Pekka Jaatinen, who earlier told Yle that the flailing mining company had attracted the attention of an international company ready to invest.

MPs were debating the government’s third additional budget supplement which contained a provision for government to spend 65 million euros to take over Talvivaara’s mining operations at Sotkamo in eastern Finland.

Earlier this month the board of the mining company filed for bankruptcy after it became clear that the funding needed to implement a restructuring proposal was not to be found.

However lawyer and administrator of the restructuring programme Pekka Jaatinen told Yle Tuesday that Talvivaara could come up with the money after all.

Jaatinen also told the daily Helsingin Sanomat that “a credible international company” was interested in the Talvivaara mine and was ready to invest at least 150 million euros.

“The impression I have of the interviews today is that it’s essentially over-optimistic and far too premature. The journey towards finding a long-term total solution will be significantly longer,” Vapaavuori commented.

As the largest shareholder in the parent company Talvivaara and its mining subsidiary in Sotkamo, the government stands to lose 200 million euros if the mining company goes under. Government said it is now looking for a solid stable operator to take over the company’s nickel mining operations.

Related stories from around the North:

Canada: Arctic mining – unexpected social negatives for Inuit women, Radio Canada International

Finland: Finnish mining company Talvivaara Sotkamo to file for bankruptcy, Yle News

Greenland: Analysis: Implications of Greenland’s decision to allow uranium mining, Blog by Mia Bennett

Norway:  Sustainable future for Arctic people?, from Deutsche Welle’s Iceblogger

Russia: Analysis – Putin shutters Russian indigenous peoples’, Blog by Mia Bennett

Sweden:  Artists boycott market in Arctic Sweden over mining conflict, Radio Sweden

United States:  Oregon mining company says it can build Arctic port for Alaska, Alaska Dispatch

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