Sydvaranger’s reopened iron mine will send out its first shipment of iron ore in twelve years, when the vessel “MV Great Ambition” leaves Kirkenes with course for China next week. The project was financed two years ago and the plan has been to repair most of the old equipment and buildings for the new production. However, the state of the old equipment was worse than expected and the finalization of the reconstruction has been delayed with some months.
One of the challenges of reopening the mine has been the budget overrun due to extra repairs on the old factory. Originally the reconstruction had an estimated cost of approximately 85 million EUR. The end result is a total cost of approximately 150 million EUR. At the same time the Iron prices have dropped dramatically since the project was financed in 2007. There is also an uncertainty of extended emission permits from the Norwegian Pollution Control Authority (SFT). Sydvaranger Gruve would like to use chemicals in their production to make the end results even purer and prices better. It will not be decided until February 2010 if the company is permitted to use this chemical.
Nonetheless, the company is now in production and low prices or not, the company management believes in a production surplus.
