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Financial security
The Company has revised the financial security condition proposal in accordance with the following wording.
The Company shall provide financial security for the costs of carrying out any restoration measures that the business may entail as follows:
Basic security must be provided with SEK 140 million (140,000,000) kr. The security must be submitted to the Land and Environment Court for review no later than three months after the final Permit ruling.
Security for the post-treatment of the sand and waste rock stockpiles shall be created in stages so that it ultimately covers a total of SEK 85 million (85 000 000) kr as follows
security of SEK 30
million (SEK 30,000,0000) must be submitted to the Land and Environment Court for review no later than two years after the Permit has been used,
security of SEK 25
million (SEK 25,000,000) must be submitted to the Land and
Environment Court for review no later than five years after the Permit has been used, and
Security of SEK 30
million (SEK 30,000,000) must be submitted to the Land and Environment Court for review no later than seven years after the Permit has been used.
When remediation measures for the sand and waste rock stockpiles (not including long-term control) have been carried out, security provided in accordance with paragraph b) shall be returned to the Company. The Company must notify the Land and Environment Court and the Supervisory Authority when the Permit expires.
The revised claim for financial security Conditions in comparison with previous proposals means that the basic security to be provided set under paragraph (a) amounts to SEK 140 million, from the amount of the original proposal of SEK 85 million.
In response to the County Administrative Board's comments (in the opinion of 25 January 2021) to justify a basis for assessing the amount of financial security, the Company has essentially rejected what need to be accounted for in respect of the costs of operating and maintaining a mining operation for implementation of remediation. The Company refers to the fact that the Company reports costs for self-monitoring and water treatment, that the remediation measures are intended to be carried out <progressively> by externally procured contractors, whereupon personnel costs are not expected to be incurred. The Company's calculations also show that there will be sufficient amounts of moraine in the area to cover the need for remediation. Thus, moraine will not have to be acquired externally, so no cost for this needs to be included in the financial security.
The updated cost estimate, Appendix C to the post-treatment plan, Act Appendix 73, shows various cost items for the implementation of remediation including unit costs ranging from SEK 11 to 30 per cubic metes for the performance of various actions.
The Company states in addition to a mass balance calculation which has been carried out based on moraine depth/amount in the area as shown in SGU's soil map, preliminary site surveys and knowledge of the area were obtained from historical and new survey works.
The Company believes that no further procurement of moraine from locations outside the business area will be required. In the detailed design of the business, additional site surveys will be carried out with, among other things, geotechnical drilling to verify moraine depth and quality. The geotechnical surveys are expected to be completed in Autumn 2021.
The Company has accounted for an area for the withdrawal of moraine in the event that sufficient quantity of moraine for remediation measures is not created by the construction works. The County Administrative Board cannot find a detailed description of the area's suitability for use.
The County Administrative Board's assessment
Financial security of an amount that can be considered to be sufficient is a prerequisite for the State to be able to carry out all the necessary recovery measures that may be required to address a unwanted environmental impact on surrounding natural environments, in the event that the responsible business becomes insolvent.
In connection with the preparatory work on the post-processing of the mining area in Kaunisvaara, after Northland Resources AB's bankruptcy, the County Administrative Board has been able to establish that costs for the operations after a Shut-Down can be significant (about 1.5-2.0 MSEK per month). The cost items included, inter alia, the maintenance of certain operations and monitoring functions, the activities of employed personnel, maintenance and supervision, and the fixed expenditure of plant.
In order to assess the amount of financial security, all possible cost items need to be assessed, influencing factors taken into account and reasonable assumptions about uncertainties included on that basis. The perspective for the assessment of cost items and the circumstances surrounding the implementation of various measures prior to and in connection with remediation, must be that of the State.
The County Administrative Board finds that the amount proposed by the Company for financial security is too low. The Company has not supplemented the application with what the County Administrative Board has previously requested.
The County Administrative Board considers that the amount of security should include costs for personnel as well as operation, monitoring, etc. for a period until the remediation has been carried out. The cost items that the Company has revised in response to the county administrative board's previous opinions are not considered to correspond to the costs that the authority estimates arise from the operation of the mine in Shut-down mode.
The period of time when the county administrative board, as the Supervisory Authority, assumes responsibility for the processing of the business until the remediation measures are intended to be carried out, may with regard to the development of additional <overburden> material for procurement and the execution of procurement including appeal periods, be substantially protracted. The County Administrative Board estimates that costs for the operation of the mine in a Shut-down position until the completion of the remediation may cover a period of at least four years. The estimated annual cost of the above-mentioned expenses, based on the experience of Northland Resources AB's bankruptcy, amounts to SEK 1.3 million per month. This means an addition of SEK 62.5 million to the financial security proposed by the Company.
The unit costs reported by the Company for the execution of various measures are also considered to be included. The County Administrative Board cannot see that the Company’s proposal has provided information that proves that it can be considered reasonable. The County Administrative Board assumes that unit costs are higher than those reported by the Company, which is why the amount of financial security needs to be adjusted.
Since the final costs of various post-processing services may increase after the tendering procedure has been completed, the County Administrative Board finds that a general surcharge should be added to the final amount of at least 20% in order to compensate for this uncertainty as to the outcome of public procurement. A surcharge for uncertainty should apply to all cost items.
The County Administrative Board also states that the Company has not yet reported whether there will be a sufficient amount of moraine of the right quality for treatment. In the event that the moraine quantities from the construction works are not sufficient, the Company has reported an area for the extraction of moraine material adjacent to the mine.
The County Administrative Board state that the proposed moraine extraction area consists wholly or partially of glacifluvial material, according to Quaternary geological map material,. The County Administrative Board considers that the Company has not disclosed whether the area is suitable for the removal of moraine or what quantities are available and the nature of the material. The County Administrative Board cannot rule out that there may be significant costs for the purchase of moraine. Costs are affected by, among other things, the transport distance from the Permitted quarry to the place of disposal and the purchase price. The Company needs to clarify whether there is sufficient amount of moraine in the field of mining activity that is of the right quality, before the question of the final amount of the financial security can be established.
The Company's proposed amount for financial security amounts to SEK 225 million, of which SEK 85 million relates to the sand. The County Administrative Board considers that a reassuring financial security should amount to at least SEK 400 million. It is considered that safety is reduced after remediation of the sand and waste rock stockpiles after it has been established that the execution has had the required effect.
The security to be provided shall be conditionally provided for in 2020 monetary value. With reference to the Company's claim for enforcement and proposed Conditions on financial Security, the County Administrative Board considers that the Permit may be used only when financial Security for permitted activities has been approved.
In summary, the County Administrative Board finds that the approval of the mining activity depends on the imposition of a financial Security Condition, amounting to a sufficient amount that takes into account what has been stated above.
Permits according to Chapter 7. Section 28(a) of the Environmental Code
The Company claims in revised Claim 3(a) that the Land and Environment Court grants a Permit in accordance with Chapter 7. Section 28(a) of the Environmental Code, within the framework of what the Permit otherwise allows, to conduct activities that in significant ways may affect the Natura 2000 site Torne and Kalix river system (SE0820430).
The Company has reported that Torne River and a couple of smaller watercourses in the vicinity of the planned mining activity area (in the application called eastern and western stream) are also included in the Natura 2000 area Torne and Kalix River system (according to Chapter 7, Section 27, first paragraph 2 of the Environmental Code).
The impact that the requested activities mainly includes flow changes and increasing levels of certain metals and substances in the water supply from the business area to mainly Östra bäcken and Torne River. The Company has described, among other things, which natural values within the Natura 2000 area are affected, by the activities sought and through calculations, what consequences may arise during operations and at whichever stage after the restoration of the area has been carried out.
In summary, the Company believes that the impact of the planned mining operations will be so limited that it does not in any significant way contribute in a cumulative effect in the Torne River downstream, neither under operations nor after the end of the operations. Neither the Habitat type 3210 Natural major watercourses of the Fennoscandian type, nor its typical and designated species that depend on the area for a viable population development, is judged to be affected in any significant way.
The Company further assesses that the Habitat type 3260 Smaller watercourses with floating leaf vegetation or aquatic mosses according to the conservation plan, do not appear in affected streams because they lack the specific structure and function required to maintain a viable population of the species typical of the habitat type.
The County Administrative Board's assessment
The impact on the Natura 2000 area -The Torne and Kalix river systems- is mainly caused by the release of substances downstream of the operational watercourses, Östra Brook and then Torne River. The impact on the habitats and species concerned, as set out in the Natura 2000 conservation plan, is estimated to be small.
The County Administrative Board can state that there is no data on the presence of different species or possible spawning and breeding areas for fish. The Company has stated that it intends to begin supplementary investigations in 2021, including net fishing, surveys of bottom fauna and diatoms, and biotope inventories in the Torne River area, outside the outlet of the eastern stream.
With regard to the basis for assessment, the County Administrative Board has requested that the Company supplement the application with a characterization of the water concerned within the stretch in the Torne River, for example hydro-morphology such as substrates, current and depth Conditions, etc., which are important for assessing the quality and function of the habitat for those concerned species. No such supplementation as described above has - as far as the County Administrative Board has been able to perceive- been revised. The lack of information based on what the Company has stated, and what the County Administrative Board has previously pointed out, means that the consequences of the mining activities’ impact on the Torne River will be more difficult to assess.
In order to limit the impact to an acceptable level, the County Administrative Board considers that Conditions for discharges to water should be established: see the Authority's assessment under the heading Discharges to Water . The County Administrative Board considers that, according to the Company's claim, permission can be granted if Conditions for discharge to the water are prescribed at levels as described above.
Species protection dispensation
In summary, the Company has reported that no exemption is needed for the impact of the proposed business on protected wild birds, reptiles, amphibians and invertebrates, vascular plants and plants. The Company proposes certain protective measures to address the prohibitions under Section 4 of the Species Protection Ordinance from being triggered by the proposed mining activity. Otherwise, protected species are not affected by the requested mining activity in an unsound manner, according to the Company. However, the Company reports that certain species of larch, commonly found, are found in the area of proposed mining activity, of which individual species may be affected, but that the ban in the Species Protection Regulation is not triggered because the conservation status of the species is not considered to be affected.
The County Administrative Board considers that, on the basis of the documentation presented by the Company, it is not entirely possible to assess whether the activities are compatible with species protection with regard to, among other things, the following species: golden eagle, lapwing, three-toed woodpecker, common screech and common crow. The Company reasons based on the loss of life environments for the species in the business area and its proposed adoption of protective measures. However, in the opinion of the County Administrative Board, there is a lack of information on the consequences of disturbances, mainly through noise, in the immediate area around the mining operations.
The Company states that in previous years, nesting of lapwing have been found, without prejudice, in the planned area of operation (50 m outside the area), but that recent inventories have excluded the area of planned mining activity of areas which constitute nesting places or breeding areas for lapwing. It can thus be stated that lapwing use the area in the vicinity of the nesting area, and that there are suitable biotopes for the species in the area.
The Company further states that the species lichen screech, pied crow, greater woodpecker and three-toed woodpecker are not considered to be affected by the business as none of the species -based on inventories- are judged to have used the planned area of mining activity as a breeding ground or nesting place, even if observations were made nearby. At the same time, the territory of three-toed woodpecker, woodpecker and greater woodpecker have been found in the inventory area, and partly in the area of mining activity itself. All species, including the shrew, are listed as breeding regularly within the inventory area. A potential golden eagle nest is located about a kilometer from the area of Nunasvaara South.
The County Administrative Board's assessment
The County Administrative Board's interpretation of the species protection provisions is based on what the European Court of Justice has clarified in the judgement in the combined cases C-473/19 and C-474/19, on 4 March 2021.
The ruling of the Court of Justice of the European Union states, inter alia, that the impact on the conservation status of protected species (including birds) can only be assessed in the context of an exemption review on the basis of a sufficiently well-established account of the species present. This means that only when a request for exemption has been made can the authorisation authority consider the conservation status of the species or species affected in an unauthorised way.
In the light of the reasoning put forward in the report of the species protection inquiry (SOU 2021:51, part 2 pp. 1036–1037), the prohibitions in sections 4 and 6 to 9 of the Species Protection Ordinance should not come into force if precautions and protective measures are taken to such an extent that the consequences could otherwise trigger the prohibitions would reasonably occur.
The County Administrative Board therefore considers that an exemption is not required for the impact of the mining activity on birds in the area of mining activity, when the Court announces Conditions for when the mining activity may begin, in accordance with the Company's commitment aimed at avoiding this impact. In other respects, the County Administrative Board considers that there are Conditions for granting an exemption for the effect of mining activities on the species (lumper species) as reported by the Company within the area of operations covered by the prohibitions in the Species Protection Ordinance, in the event that the Company so requests.
In addition, the Company needs to report, and the Court needs to consider, whether the consequences (especially noise) of the mining activity sought on the environment in the immediate area outside the business area, as well as the areas of operation that may still be used by reported species, which may cause the prohibition in section 4(4p ) to be triggered, if exemptions are required, or if additional protective measures need to be taken. However, in the opinion of the County Administrative Board, there is a lack of data on the consequences of disturbances, mainly noise, in the immediate area around and in the area of the mining operations, for the bird species concerned.
Claim 1d) moraine stockpile
The Company has applied under 1 (d) permission for the extraction of moraine for remediation purposes in the area reported in the attached map, Appendix K15. The County Administrative Board cannot see any documentation describing the properties of the quarry material and its suitability for the purpose of remediation.
The County Administrative Board's assessment
The County Administrative Board considers that the Company needs to explain the need for moraine, with reference to the geotechnical surveys carried out in the field of mining activity, which would clarify the quantities of moraine that are needed during the construction works. The Company also needs to provide a basis for assessing the suitability of the extraction area for moraine extraction because, according to quaternary geological map material , glacifluvial material must be found in the proposed area (Chapter 9, Section 6(f) of the Environmental Code).
The County Administrative Board also lacks a detailed account of the mining operations, the mining depth, the reported period of operations and other information, as well as an impact assessment in order to be able to assess the need, admissibility, suitability of the site and for the possibility of prescribing the necessary Conditions.
During the consultation, the County Administrative Board has pointed out that there is a demarcated groundwater reservoir east of Hosiojärvi. The groundwater reservoir is found in soil layers consisting of ice river sediments and peat. The extraction possibilities have been assessed by SGU at 80 – 400 m3/day. SGU has identified the groundwater reservoir east of Hosiojärvi as a preliminary body of water, i.e. extraction capacity corresponds to the size criterion in the Framework Directive. The reservoir may be demarcated as a body of groundwater. This means that a groundwater reservoir in the area may be subject to environmental quality standards and the Water Authority's management plan from the year 2027. However, the Company's studies indicate that there is no inflow from Hosiojärvi to the groundwater reservoir in the east. On the other hand, the County Administrative Board can state that the requested moraine source is within the scope of the groundwater reservoir, for which the Company needs to take into account as described above.
Startup time
The Company has requested under 3(b) and (c) that the Land and Environment Court (b) determine the time for the commencement of the environmentally hazardous mining activity at ten years from the date of final Permit judgment and (c) determines the period of the water extraction utility to be ten years from the date of the final Permit judgment.
County Administrative Board's assessment
In order to clarify what is meant by the claims for start-up as described above, the County Administrative Board wants the Company to provide its view on what needs to be implemented in order for the environmentally hazardous mining activity and the water extraction utility should be able to be considered to be during operation.
Execution
The Company has requested under 3(f) that the Land and Environment Court orders that the Permit may be used immediately without prejudice to the fact that the judgment has not become final (enforcement order).
The County Administrative Board's assessment
The Company has proposed a Condition on Financial Security. According to the proposal, security (basic security) must be submitted to the Land and Environment Court for review no later than three months after the final Permit Judgment.
This means that the mining activity applied for can be started without a good Financial Security for the proposed licensed mining activity, for which its main purpose is to meet the requirements of restoration to the protection of the natural environment in the area. The County Administrative Board believes that there must be an approved Financial Security before operations can begin, with the support of a Permit.
Notwithstanding the fact that the judgment has not gained legal force, an enforcement order. the County Administrative Board is not taking a position on the Company's request to be allowed to take the Permit,
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