“The earlier bankruptcy is of course a big contributor to the positive equation. To be free from debt at start-up creates good conditions to run operations profitably,” says Anders Sundström, chairman of the new company.
Mining operations in Pajala are continuing. After a long process with many challenges, a new start-up is being projected. In a so-called “private placement” together with Carnegie Bank and entrepreneurs, the necessary capital has been raised. The basis for the decision is the conviction that operations will be profitable, which investors and stakeholders agree with.
“We have seen strong optimism among investors. The response has been fantastic. In a short while we have raised 500 m kronor in Kaunis Iron. This gives us solid foundation to build on. Even though we know exactly what product we have, and how much of it we can produce, we cannot control iron ore prices on the world market. That is the only uncertainty factor in all this. But we are very optimistic,” says Anders Sundström.
Production start in summer 2018
The target is annual production corresponding to 2,000,000 tonnes of the finished product. That is roughly half the target of the previous operator.
“Although we already have a functioning production and logistics chain in place, it is about realistic goals. We want to feel secure in being able to run operations profitably at an early stage. It must be done in a balanced way. Then we have environmental aspects to safeguard. We will work proactively with that aspect too,” says Per-Erik Lindvall, board member, Kaunis Iron.
Part of the community
Views have been expressed on the environmental impact of the operations. This concerns among other things the impact on the water table on the mire where the deposits are.
“Yes, mining operations impact the environment – that is true of course. That must always be taken into consideration in an overall assessment, but there are also strong reasons why it is worthwhile. Jobs and a living rural area carry a great deal of weight on the other side of the equation. Today it is a must and a self-evident process to look at all aspects of sustainability, socially, economically and environmentally. Although we must respect each other’s roles, we want to be an active part of Pajala’s future,” says Åsa Allan, site manager of Kaunis Iron.
Recruitment a priority area
Per-Erik Lindvall, who is one of the driving forces behind the project, has a solid background in the mining industry, having spent 10 years with Boliden and 26 years with LKAB in different managerial positions. Per-Erik is a well-known profile in the industry. Together with site manager Åsa Allan, it is he who is to build the team for operating the mine in Kaunisvaara. Åsa is a qualified geologist, and in 2007 achieved a PhD in ore geology at Luleå University of Technology. After a period as a consultant, in 2012 she was recruited as senior geologist at the Pajala mine. Having built up the geology division, she finally became mine planning manager before the mine closed down. Before Kaunis Iron came knocking, she also had time to work for two years as Municipal Chief Executive in Pajala.
“All this is quite simply fantastic. I know what this means to Pajala, and I know there is massive support for the mine in the region. I know also that together we will succeed in what we undertake. Our focus right now is on recruitment – by our reckoning we will need over 300 people in operations. We know there is strong interest, and we are already hearing a lot of positive reactions from people in Norrbotten. We will meet a lot of the needs through partnership with important suppliers, and some will be employed in the company,” says Åsa Allan, site manager, Kaunis Iron.
The product is the main factor
Ultimately, it all boils down to the unique product that has already shown itself to be in big demand from the world steelworks.
“We know that our product, with extremely favourable environmental advantages, has its clear place on the market. It is no secret that countries like China have major environmental challenges, at the same time as they are very much in need of steel. This has meant that they put a premium on raw materials with a higher iron content. This gives our product from Kaunisvaara an edge,” says Per-Erik Lindvall, board member, Kaunis Iron.
