Terms and conditions

Kaunis Iron's operations are monitored and regulated in several ways, with a valid operating permit from the Land and Environmental Court being a fundamental requirement for continued operation. Here, you can access the current court ruling and the associated conditions.

Positive ruling with 60 conditions

Summary of the Ruling and Conditions

Overall, the ruling was highly favorable for us and allows us to proceed with the part of our operations that is time-critical, even though the ruling is subject to appeal and thus not yet final: the flotation of ore from our existing open pit. We modified our claim before the main hearing to seek a “partial” enforcement order, excluding the two new open pits instead of an enforcement order for the entire proposed operation.

A significant consideration by the court was that the proposed activity is deemed to be of "overriding public interest." In its reasoning, the court referred to the benefits we provide at the local, national, and global levels by mining iron ore in Kaunisvaara:
“According to the court’s assessment, iron ore must be considered a prioritized mineral. Swedish production is crucial for European iron and steel supply. Domestic iron ore production is significant for the supply of raw materials for fossil-free steel products. The operation is also of critical importance for employment in Pajala municipality and for maintaining a vibrant rural community that can support the tourism industry.”

The ruling is comprehensive, spanning 362 pages, reflecting the lengthy process and numerous documents prepared during the case. The extensive and detailed conditions are not surprising and do not notably deviate from similar rulings for comparable operations. The scope of the "condition catalog" reflects the extent of the process, input from authorities and other stakeholders, and our own proposals. We also welcome strict environmental requirements for our operations, and we believe that the court's regulations should reduce the risk of authorities appealing the ruling.

There are some limitations in the permit: it is valid for 35 years (starting from December 1, 2022), the total amount of waste (tailings, beneficiation sand, and flotation sand) is limited, and water intake from the Muonio River to the operation is restricted during periods of low river flow. Additionally, discharge quantities into the Muonio River are also restricted during certain periods by conditions.

Generally, these limitations are not surprising and are in line with current permit practices and, in part, with our own proposals (regarding water intake from the Muonio River). We also assess that the limitations are set at levels that allow the operation to be adjusted and operated according to previous plans.

The restriction on discharge to the Muonio River is considered the most challenging for the operation as it requires us to change our current approach to discharge. While conditions are rarely simple to meet, we believe we can comply with this requirement with a revised water management strategy.

We received 55 conditions and 3 investigation conditions with probationary requirements. Most of these are based on the final (and provisional) conditions and commitments we presented in the case and/or suggestions from authorities that we accepted during the handling. A few conditions warrant special mention due to questions or concerns raised:

- **Condition 14** is a noise condition to protect birdlife near the future waste rock pile in Sahavaara. This unusual condition is considered fully achievable based on the data and calculations provided for the proposed activity and the protective measures we have committed to. How this condition will be practically monitored will need to be analyzed and coordinated with the supervisory authority.

- Regarding reindeer husbandry, the court has prescribed a condition for ongoing consultation that aligns with our proposal but extends to include consultations with reindeer herding districts affected by transportation, not just the Muonio reindeer district as initially proposed. This expanded consultation requirement introduces some additional administrative work but is fundamentally acceptable. Developing a well-functioning dialogue with more reindeer herding districts is beneficial for the operation.

- Most questions regarding water discharges (concentrations) have been deferred for the probationary period. This includes xanthates (flotation chemicals) and sulfates, as well as various metals. Generally, the provisional requirements (limits during the probationary period) align with our proposals but are slightly adjusted in some cases. Our analysis confirms that these tough limits are achievable.

- Notably, uranium is not covered by the probationary period or the provisional requirements. The company has provided documentation arguing that the assessment basis for uranium in HVMFS 2019:25 should reasonably consider the concentration of bioavailable uranium rather than total dissolved uranium. The court did not specifically address this but noted that the concentrations expected in discharge water will, after dilution in the Muonio River, be below the assessment criteria.

- Discharges of xanthates and sulfates have also received particular attention from opponents and review bodies. We have demonstrated that even theoretically, the concentrations in the Muonio River are below known effect levels and that additional protective measures can be taken if necessary. The court acknowledges that the reported concentrations are acceptable and that it is possible to prescribe sufficient limits according to our proposal. However, the court considers that it is not conclusively proven that further reduction of concentrations through additional treatment is achievable at a reasonable cost, so this question is deferred to the probationary period.

We have conducted an extensive analysis of the ruling, the conditions, and other limitations resulting from it. We have developed an action plan to implement the new permit that ensures we can meet the new requirements before they come into effect. We have also initiated a dialogue with the supervisory authority.

Once the permit is activated, it will apply in its entirety, including all conditions. The previous permit will no longer be valid. We will not be able to switch between the permits. However, the ruling indicates that the existing permit remains applicable if the new permit is overturned following an appeal.

We have received 17 appeals against the ruling. Some parties have been granted extensions to submit their grounds for appeal, with some extending into March. The Supreme Administrative Court (MÖD) must grant leave to appeal (Pt) for an appeal to be considered. Normally, it takes 3-6 months for MÖD to make a decision on Pt, and it is likely to be towards the upper end of this range, especially if one or more authorities appeal.

Read the entire judgment from Umeå District Court