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Local mayors want tax from mining

Sydvaranger Mine could be imposed on a new tax if the mayor of Sør-Varanger is heard by the Governemt. Photo: Jonas Karlsbakk

Mining industry invests heavily in the border town of Kirkenes, but for the municipality board there are more costs and too little income from mining.

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Sydvaranger mine is owned mainly by Australian investors and run by people from all over the world. However, even though business activity is high in the border town of Kirkenes, too little of the income from mining contributes to the development of the local community. Therefore the local mayor wants the mineral companies to contribute more locally. 

Mayor of Sør-Varanger Cecilie Hansen says that the reopening of the mine has been important for the business development of Kirkenes. Locally businesses are blooming and the municipality has one of Norway’s lowest unemployment rates at below 2 percent of the work force. But for the general economy of the municipality administration the situation is far from luxurious. A new mining tax would be an important contribution to the local economy.  

“We have suggested that the government should evaluate the establishment of a mining tax, similar to the one we have in oil industry.”

Oil companies that are producing oil on the Norwegian continental shelf have to pay tax according to the production rate. A law which has been important for municipalities where there are activities relates to the petroleum industry. 

For Hansen it is a challenge that a municipality in growth also needs to invest heavily to keep pace with the growth. Over the last ten years several large investments have been done among them a new school and the development of a new housing area. More investments are due, but the debt is now at a level which probably will stop the municipality board from deciding on new large investments. Sør-Varanger is not alone and therefor Mayor Hansen has been supported by several other local politicians for her initiative, both locally and internationally.  

“This initiative has also been debated in our neighboring countries Sweden and Finland and we are now discussing a joint meeting for sharing knowledge and solutions”, says Hansen. 

There has not been decided anything about this meeting yet, but Hansen hopes they can agree on a date sometime early next year. 

Among the initiators of a mining tax in Finland is the Minister of the Environment, Ville Niinistö. He believes that the annual revenue for a Finnish mining tax could exceed € 100 million. 

In his view the next generations of young Finnish people have agreed to let the earth be used. Therefore he thinks it would be good for the coming generations to levy some kind of tax, whose revenue would partly go to the local authority and partly to the state. One of his options is also to establish a state govern fund along the model of Norway’s oil fund, Finnish Newspaper Helsingin Sanomat writes.

Mayor of Sør-Varanger Cecilie Hansen’s says that during next autumns Norwegian parliamentary election the debate on mining tax will be a top priority for her and for other communities with mining. She has strong believes in that her party, the Centre Party, will include this as a part of their national program. For Hansen it is therefore important to highlight this issue on all political arenas so that other political parties see the need for this new tax.