Jörgen is digging for iron ore again

Jörgen Norman is operating one of the giant diggers in the Kaunisvaara mine.

After half a year with financial difficulties for Northland Resources, their situation is solved in a € 240 million rescue plan. Last week machine operator Jörgen Norman and his colleagues could finally start up their giant diggers in northern Sweden again.


Four months of financial difficulties for Northland Resources culminated in late May, as the company was forced to a full stop of all machines. Production had to be halted since all their bank accounts were blocked, Haparandabladet writes.

The inhabitants in the small mining town of Pajala was waiting in suspense on the decision from the bondholders, whether the workers would have a job to come back to or would the Kaunisvaara mine be shut down for good?

Located in the border areas between Sweden and Finland, the Kaunisvaara mine shipped out their historical first load of iron or in December 2012. € 700 million had been invested to start up production. Brand new mining equipment and factory buildings meet you wherever you go in the mining area.

Pajala is a small countryside village with a little less than 2000 inhabitants. Before the mine opened in Kaunisvaara the village was struggling with high unemployment rate and large depopulation. With the opening of the mine everything changed for the small community.

A few months after the first shipment, the company was out of money and had to start constructive discussions with the bondholders. By the beginning of June there was still no solution and all production was stopped until the project was refinanced. Last week a rescue plan worth € 240 million to refinance the mine was decided on by the bondholders of Northland Resources. According to Dagens Nyheter the main bondholders are Folksam, Peab, Metso and LKAB.

Northland Resources has only initiated phase one of a project which will go through several stages of development. The first stage is the Tapuli mine in Kaunisvaara, which is the mine that has been in production since December 2012. Some kilometers west of the Tapuli mine there is the Sahavaara mine which will be stage two of the project.

At the mining factory in Kaunisvaara there is a second production line ready to start up production at the Sahavaara as soon as the company economy is ready for another investment. Stage three of the Northland mining plans is the Hannukainen mine on the Finnish side, making this a cross border mining project.

The project has its obstacles, located inland Sweden with no harbor or railway. The iron ore has to be loaded onto trucks and transported on narrow roads to Svappavarra, 150 kilometeres to the west. From there it is transported by railway to the harbor in Narvik in Norway where it is shipped off to the international markets.

But a new road is planned and Northland has established a terminal in Narvik for their shipments. According to their estimates they need an iron ore price of at least 80 dollar per ton. Currently the price is at 120 – 130 dollar.