1. Arctic Review 2013
- Logistics & Mining

2. Table of contents
 Arctic snapshot
 Arctic countries and non-Arctic stakeholders
 Arctic shipping and logistics
 Overview
 Northern Sea Route (NSR)
 Northwest Passage (NWP)
 Barents Region
 Railroads
 Roads
 Arctic mining
 Overview
 Arctic mining by country
 Mining – logistics
 Processing Arctic metals & minerals
 Raw material transportation & mining infrastructure
 Business opportunities for Finnish companies

3. Arctic snapshot
 One of the last unexplored
frontiers rich in natural resources,
minerals, oil and gas
 Melting sea ice opens new
shipping routes and business
opportunities
 Increasing interest in Arctic
resources from non-Arctic
countries specifically export-led
Asian economies of China,
Japan, Korea and Singapore
 Delicate environment and hostile
conditions require advanced
skills, technologies and
equipment for environmentally
safe and sustainable operations
 Significant potential, significant costs

4. Arctic countries and non-Arctic stakeholders
Arctic Council
• Founded 1996 as
high-level,
intergovernmental
cooperation forum in
Arctic issues
• Members: 8
geographically Arctic
countries, non-Arctic
observer members
with Arctic interests,
6 organizations
representing
indigenous people of
the Arctic and 6
working groups of
experts, agencies &
researchers
Arctic Council
Members
• Canada
• Denmark/
Greenland
• Finland
• Iceland
• Norway
• Russia
• Sweden
• USA/ Alaska
Non-Arctic
Observer Members
• China
• India
• Japan
• South Korea
• Singapore
• United Kingdom
• EU members:
Germany, France,
Poland, Italy,
Spain, Holland
• EU’s application is
pending

5. USA/ Alaska


Economy relies on oil, gas & mining industries
Significant mineral potential: gold, silver, copper,
coal, zinc & lead
 Access to resources possible as technologies develop

Road-to-Resources projects connect mining sites to
existing road & rail systems
 Umiat, Ambler & Nome projects

Existing 800-mile trans-Alaska pipeline for crude oil
transportation, deterioration due to melting permafrost
& lower oil flow volumes in pipeline

Plans for LNG pipeline from Prudhoe Bay down south to
Kenai: Cost $45-$65 billion
 Possibility to export to Asia
 Plans include a multi-billion liquefaction plant and export
terminal in Nikiski area
 Exxon Mobil, BP & Conoco-Phillips

Long-term investment needs for ports, icebreaking
capabilities, improved satellites and road & pipeline
maintenance
 $8M allocated for icebreaker research and planning

No current deep-water ports along the Arctic coast, 14
possible sites proposed and investigated
 Nome & Port Clarence/ Teller front runners on the west coast as
first developments

6. Canada

Territory dispute over shipping in Northwest Passage –
Internal vs. international waters

World’s second largest uranium producer, large supplier of
gem-quality diamonds

Major mining destination with significant new potential for
mining & natural resources development in Nunavut and
Northwest Territories (NWT)


Geomapping problem in the north

NWT economy is mining, oil & gas dominated, further
potential and growth in mining diamonds, rare earths, cobalt,
silver, nickel, gold and zinc; 300 developed wells and 70
exploration wells for oil and natural gas



Nanisivik deep-water port in Nunavut under development

Emerging clean energy giant, support responsible and
sustainable development of oil & gas industry in the North
Corridors for Canada project – Plan for strategic
investment in NWT transportation infrastucture: Mackenzie
Valley Corridor valued at $1.7 billion, also $65 for bridge
rehabilitation & repair, $600 million for transportation
infrastructure
Nunavut region attracts mineral exploration
Looking to launch a new polar ice breaker within the next
decade

7. Greenland


Autonomous state economically dependent on Denmark
New Government in 2013 – pro-mining, lift uranium ban and allow extraction &
export of radioactive uranium.
 Subject to Denmark’s approval

Mining industry supports government’s efforts towards economic independency,
growth and improvement in the country’s social status

Attractive mining destination as ice sheet shrinks and mining season becomes
longer – potential for lower-cost mining, one-stop regulatory system (Bureau of
Minerals and Petroleum), year-round access to ocean transportation

Rich in natural resources and potentially hydrocarbons, large deposits of rare
earth elements, uranium, iron ore, gold, diamonds, lead, nickel, copper and
zinc

Currently 20 exclusive and 25 non-exclusive hydrocarbon exploration licenses
offshore

Over 30 new prospecting licenses for mining in 2012
 Nalunaq gold mine, owned by Angel Mining, only producing mine

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Possibility of hydroelectric power in mining activities
Alcoa planning an aluminum smelter
Interest from Chinese, Korean & Western mining companies
London Mining has $2.35 billion mining project in Isua
Pollution and environmental risks of mining raise concerns
No roads between towns, all transportation via sea or air, currently two ice-free
ports: Nanortalik and Sisimiut
 Possibilities for new ports along the coast with access to deep water

8. Iceland
 Large aluminum industry with 3 smelting
plants operated by U.S. companies –
powered by inexpensive hydropower
 Planned expansions include 2 new plants
 Abundent geothermal & hydropower
resources – potential for an energy hub
 Feasibility studies on possible underwater
power cable to export unused power to
Europe
 Potential shipping/transhipping hub 

Gateway to Northwest & Polar Passage,
Northern Sea Route & Atlantic
New deep-water port under construction
in Finna Fjord, northeastern Iceland by
German Bremenports in cooperation with
Icelandic government
 Port is free of ice year round, close to
regional oil, gas & mineral deposits north
and west of Iceland
Possible refining center for imported
minerals from Greenland & Canada where
refineries are far from mining sites but ocean
access is a possibility

9. Finland, Sweden & Norway
Finland
• Knowhow in Arctic
maritime technology,
onshore & offshore,
icebreaking
• Arctic oil recovery
• World leader in
icebreaking technology
• New Oblique Icebreaker by
Aker Arctic Technology
• Ice management
knowhow and expertise
• Large mining industry
with growth potential,
seeks international
investments
• Infrastructure
developments
• Promote exports and
attract foreign
investments
Sweden
• Significant mineral
deposits with growth
potential
• Expertise in Arctic
shipping
• Mining and petroleum
sector support
activities: experience,
systems, machine
suppliers
• Focus on Arctic
transportation
infrastructure
developments
• Ice breaking resources
and expertise
Norway
• Economy relies on
hydrocarbons – Nearly
all energy from
hydropower
• Energy: Oil & Gas
exporter
• Significant offshore wind
power potential
• Shipping: Arctic ports in
Narvik and Kirkenes
• Cooperation with Russia
as a priority
• $200m budgeted for
Arctic initiatives
• Svalbard islands major
coal producer
• Mapping of mineral
resources in the north

10. Russia
 Energy giant: Oil and
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gas industry, significant
hydrocarbon reserves
Oil & gas production on
the shelf offshore and on
land – Energy security
Large mining industry
Develop infrastructure
along the Northern Sea
Route
Economic growth: Link
between Northern Sea
Route as international
cargo route and
economic development of
northern Russia
Provides permits, port
services & icebreaking
services for the NSR
Transport LNG from
Russia to Asia in 2018
Energy
•
•
Development plans by
2020: Timano-Pechora
oil & gas provinces and
hydrocarbon fields on
the continental shelf in
the Barents, Pechora
& Kara seas and the
Yamal and Gydan
Peninsulas.
Exports to Europe and
Asia
Mining
•
•
•
Main Arctic areas: Kola
Peninsula, East Siberia
& Russian Far East
Most current
production is for
domestic use
Iron ore, coal,
bauxite, copper,
gold, nickel &
diamond - lower grade
& quality diminish
value
Shipping
•
•
•
Support to construction
of icebreaking, rescue
& support fleets,
coastal infrastructure
16 current ports
needing upgrades +
Sabetta &Teriberka
under construction
1 new nuclear powered
ice breaker under
construction costing
€1.1BN, 2 more
planned

11. China
 Strategic buyer of Arctic resources
 Interests in energy, minerals and new
shipping lanes – China has capital &
willingness to pay
 Targets Greenland, Canada, Russia
and Iceland
 Increasing demand for energy – Future
strategic buyer of Arctic energy from
U.S., Canada & Russia
 Capital to support Arctic projects, export
labor
 Buying shares from Arctic resource
development companies to gain foothold
 5 Chinese mining companies currently in
Greenland
 Natural resources are vital to China’s
modernization efforts
 95% international market share in rare
earth elements – Leader in refining
rare earth elements
 China offers to invest in infrastructure
projects in Greenland in exchange for
mineral extraction licenses
 Free trade agreement with Iceland –
Interest as a shipping hub, access to
Arctic waterways, NSR
 NSR offers China faster access to
European markets
 China will double oil imports from Russia
and explore 3 artic offshore areas for oil
with Russian Rosneft
 Possible oil & gas pipelines from Russia
to China
 Bought Canadian oil & gas company
Nexen in 2013 for $15bn
 Chinese firms have invested $400m in
small scale mineral & petroleum projects
in Canadian Arctic

12. Japan
 Arctic energy importer
 Japan is the largest importer of
liquefied natural gas (LNG), the
second largest importer of coal and
the third largest of oil.
 Arctic Ocean's hydrocarbon resources
as a potential alternative energy supply
source to Middle East
 Possibility of developing and
transporting natural resources in the
Arctic
 LNG shipments planned from Norway
& Russia to Japan in 2018
 Seeks to increase presence in
resource development in the Arctic
and Arctic commercial shipping
 NSR: shorter distance from Japan to
Europe
 Import of raw materials for industrial
purposes
 Focus on the effects of Arctic shipping
 Possibly design & develop ice class vessels
 Follow China & Korea and maintain
marine transport capacity in the Arctic
 Japan-Russia relationship development
 Science and technology consultation
agreement to provide further economic and
industry development of Japan and Russia

13. Roles and interests of other non-Arctic countries
Korea
Singapore
India
• Interest in energy, minerals & shipping
•
Shipping stakeholder
•
• Maritime industry: Shipbuilding,
transportation and logistics
•
Member of International Maritime
Organization (IMO), Strong interest in
global shipping development
Views itself as an Arctic
stakeholder
•
Interest in Arctic energy
•
Fast growing domestic energy
consumption
•
Oil & gas for energy security
• Experience in building ice-strengthened
cargo ships
• Acquired Aker Finnyards & their
technology for ice navigation: the
double-acting ship - provide cargo ships
for Barents and Kara seas
• Daewoo to build up to 16 ice-class
LNG tankers to NovaTek (RUS)
•
•
Interest in Arctic shipping and
offshore activities
•
Expertise in major port facilities
•
Potential for the Offshore & Marine
Industry – Singapore's Keppel
Offshore and Maritime & Sembcorp
Marine have technologies for offshore
drilling in hostile environments
• Interested in shipping along the NSR
and Arctic mineral & energy
resources
• Depends on imported natural resources
• Greenland exploration deal for rare
earth elements, tungsten & cobalt
• Emerging rare earth refineries in Korea
• Port development along the NSR in
cooperation with Russia
Global maritime knowledge hub by
2025
•
Keppel and Marine delivered 2
Arctic icebreaking vessels to
Russia's Lukoil in the Barents Sea
•
2013: Keppel & ConocoPhillips
designing a pioneering jack-up rig for
offshore Arctic drilling
•
Growth in related industries
(supply vessels, logistics IT
repair & support)
•
Imports 80% of energy
•
Plans pipelines to tap into Arctic
oil and gas reserves in Russia
•
Natural resources for food &
resource security
•
New shipping routes as India
grows and becomes a bigger
player in international trade
•
Significant interest in climate
change research in the Arctic –
direct impact on Indian monsoon
•
Arctic research station on
the Svalbard Islands

14. Roles and interests of other non-Arctic countries
United Kingdom
•
New shipping routes create
opportunities for ports
•
Stornoway port in Scotland a
possible European Arctic gateway
hub for shipping, refueling station
EU
•
EU Commission’s observer status to
Arctic Council is currently pending
•
Presence through Germany, France,
Italy, Spain and Poland as non-arctic
observer members; Finland, Sweden
and Denmark as Arctic members
•
Insurance and re-insurance agencies
for Arctic shipping companies
•
•
New sources of oil, gas, minerals and
fisheries
Main interest stems from climate change
and its impacts on society
•
•
Commercial interests: BP & Shell oil
and gas exploration and drilling in
Arctic regions
Environmental sustainability as a
driving force behind Arctic development
•
EU is a large consumer of Arctic energy
and minerals
•
Leased an icebreaker in the Arctic
•
Political and security concerns over
increased interest in Arctic resources and
transportation channels

15. Energy & mining developments in the Arctic

16. Arctic Shipping & Logistics

17. Arctic logistics overview
Arctic logistics focus on the transfer of resources to and from Arctic locations via shipping lanes, roads and railroads.
Remoteness and harsh conditions of Arctic locations bring costs of new infrastructure developments in the area very
high. However, infrastructure developments are a prerequisite for successful and safe Arctic resource exploitation.

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Arctic logistics include shipping routes, roads and
railroads, also pipelines for oil and gas transportation
Shipping routes, NSR & NWP need significant
investments in port facilities
Rehabilitation of existing ports, more capacity &
services
New deep-water port construction
Search & Rescue preparedness
Mapping, navigation & communication technologies
Roads: Alaska & Canada have long-term investment
plans for infrastructure developments in the North
American Arctic
Connect mining sites to existing road networks
Railroads: Focus in Barents region where different rail
standards in Finland, Sweden, Norway and Russia pose
a challenge to cross-border transfer of raw materials
Selected logistics developments
Barents Region Arctic deep-water ports: Narvik, Kirkenes &
(NOR, SWE, FIN & Murmansk, new railroads and increased capacity to
northwestern Russia support mining activities
Alaska
Road-to-Resources: Umiat, Nome & Ambler; Deepwater ports: 14 suggested sites, Nome & Port
Clarence most advanded developments
Canada
Corridors for Canada: NWT infrastructure
developments
Greenland
Shipping hub: Possible port development, quick
access to deep water
Iceland
Shipping hub: Finna Fjord deep-water port
construction
Russia
Rehabilitation and upgrading of existing ports, 2
new deep-water port sites (Sabetta &Teriberka),
development of new pipelines

18. Arctic shipping
 Melting sea ice has increased
traffic in the Arctic waters
 Arctic could be ice-free by 2050
 Export opportunties for natural
resource, energy, oil & gas
transportation
 Shorter maritime distance
compared to Suez- and Panama
Canals results in faster
shipping times and potential
cost savings
Challenges:
 Port infrastructure
 Ice management
 Icebreaking services & high costs
 Ice Class vessel requirements
 Short operating season
 Inadequate mapping of Northwest
Passage




Navigational challenges
Lack of emergency preparedness
Search & rescue services
Environmental issues

19. Northern Sea Route (NSR)
2500
Northern Sea Route Traffic



2000
2000
2013
 620 ships had permits to sail parts of NSR in 2013
1300


1500


1000


500
260
34
46
2010
0
4
2011
2012
Number of transits
2015
2020
Avoids unrest of Suez Canal, seasonal supplement, current season
is from July to November
Energy-hungry Asian markets - shipments of liquified natural gas
(LNG) and oil from Barents Sea & Siberia
Russia investing in infrastructure along the route: 16 current ports &
2 ports under development (Sabetta & Teriberka)
Increased commercial traffic in NSR link to economic development of
Russian Arctic
Shipping costs potentially competitive with time savings if large
ships can sail with full cargo loads
Ice breaker escort through NSR $200,000 (Lloyds)
Major opportunities
500
71
2013
From Barents Sea to Bering Strait
Year-round navigation since 1978 in western NSR
Vessel traffic rapidly increasing from 4 vessels completing the
route in 2010 to 71 in 2013
 71 vessels sailed the whole route and transported 1,355,900 tons of cargo in
2030
potential number of transits
www.arctic-lio.com, Northern Sea Route Information office
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Ice Class vessel development
Port and pier infrastructure, safety and service development
Mapping, navigation and communications technology
Energy, oil and natural gas transportation to Asia
5-15% of China’s European trade could use NSR by 2020
LNG trasport from Norway to Japan possibly in 2018

20. NSR vs. Suez Canal
 NSR is up to 50% shorter in distance
 It can cut down 12-15 days of shipping
time compared to Suez Canal
 Capacity restrictions due to narrow
straits & ice conditions – vessels cannot
be wider than icebreakers
Additional costs of NSR
 Icebreaker assistance cost depends on
 Ice class of the vessel
 Ice conditions in the area
 Distance of escort
 Time of navigation
 Insurance
 Variability in transit time due to weather
conditions
 Construction standards and crew training
Current shipping costs are significant and
uncertain conditions along the route
discourage shipping time sensitive cargo.
However, future potential remains.
Kirkenes/Murmansk – China
• NSR is 16 days faster
• Requires 750-1,000 tons less fuel,
savings up to $650,000
Dailan (CHN) – Rotterdam
• NSR is 9 days and 2,800 nautical
miles shorter
• Average cost of mandatory
icebreaker escort $200,000 (Lloyds)
Yokohama – Rotterdam
• Suez has lower costs per container
due to capacity restrictions in NSR
Yokohama - Rotterdam
Route
NSR
Suez Canal
Distance
7,600 nautical miles
11,300 nautical miles
Time
26 days
36 days
Capacity
2,000 containers
6,500 containers
Total cost
$2.5 million
$3.5 million
Cost per container
$1,250
$538

21. NSR shipping development
 Cargo increase from 1.4 million tons in 2013 to up
to 4 million tons by 2015
 Sort out all navigational blank spots, and
upgrade all navigation maps with route depth
data by 2016
 €23.4 million invested in 10 emergency and
rescue centers along NSR by 2015. Main
centers Murmansk (2013), Naryan-Mar
(operational in 2013), Dudinka (2012), and
Anadyr. Subdivisions planned for Arkhangelsk,
Vorkuta, Nadym & Tiksi
 Extra aircraft (10 helicopters & 8 aircraft) to
stations in Murmansk, Novaya Zemlya, Dikson and
Mys Shmidta
 Development plans: new Arctic rescue ship,
military ice-capable transport, new icebreakers to
replace aging fleet - €1.1BN ice breaker under
construction in St. Petersburg, 2 more planned
 Vision of NSR as a key transport route in global
scale
 Public-private collaboration for financing
Sabetta port (construction underway)
 Part of Yamal-peninsula LNG project
 €1.82 billion, funded as a public-private partnership,
majority govt funding


Capacity of 30 million tons annually by 2020
LNG shipments to Europe, Asia & Americas
Teriberka Port
 Construction depends on Shtokman LNG
development

Port for exporting LNG from Shtokman field in the
Barents Sea


Costs $2 billion
Planned capacity of 30 million tons annually

22. Northwest Passage (NWP)
•
•
•
•
NWP extends along northern Canada from Baffin • No current deep-water ports along the route
• Port development plans are in place for Alaska’s
Bay to Beaufort Sea
Suffers from poor mapping and uncertain ice
Arctic coast (Nome & Port Clarence) and
conditions
Nanisivik in Nunavut, Canada
Mostly used for community supply, minimal
• Need for mapping, navigation & communication
commercial traffic
technologies
• First commercial bulk carrier sailed the route from
• Increased traffic from NSR has increased traffic in
Vancouver to Finland in 2013 carrying 25% more coal
Bering Strait between Russia & Alaska – need for
than possible through Panama Canal
more visible U.S. presence off the coast of Alaska
Need for more icebreaking capabilities
Bering Strait traffic
Northwest Passage traffic
25
22
21
18
20
7000
19
5000
15
10
6000
6000
Number of
transits
4000
7
Potential
number of
transits
3000
5
2000
0
2009
2010
2011
2012
Number of vessels
2013
1000
425
400
3000
480
0
2010 2011 2012 2017 2020

23. NWP shipping developments - Alaska
 Alaska’s advanced Arctic deep-water port developments in
Nome and Port Clarence are motivated by increased vessel
traffic in Bering Strait, 60% foreign vessels
 Increased activity requires increased presence
 In 2012 480 ships transported 3 million tons of cargo, in 2020 up to 50
million tons as NSR traffic from Russia increases
 Within the next 10 years U.S. will have a need for 2 new ice
breakers ($1BN / piece), new air station in Point Barrow with
3 helicopters and a deep water port with response presence
and infrastructure
Proposed deep water port
sites in Alaska
St. Paul Island
St. Lawrence Island
Nome
Port Clarence/ Teller
Kotzebue/ Cape Blossom
Mekoryuk
Cape Thompson
Wainwright
Port Franklin
Barrow
Prudhoe Bay
Mary Sachs Entrance
Bethel
Cape Darby

24. NWP shipping developments - Canada
•
•
•
Infrastructure developments
are needed, high costs
postpone plans, reduce scope
of projects
NWP mainly used for
community supply and
tourism, majority of vessels
private yachts
Canadian Space Program
supports Arctic developments
•
•
•
•
•
Security and safe navigation
Atmospheric and weather
forecasting
Deep-water port
development in Nanisivik
Route development
significantly lacking
compared to NSR
Commercial potential
remains low

25. Arctic shipping – Role of Arctic countries
and non-Arctic stakeholders
 Russia sees Northern Sea Route (NSR) traffic  China, Japan and Korea need resources,
as a key to economic development in northern
Russia
 Norway has Arctic ports for cargo
transportation in Narvik and Kirkenes
 Iceland as a potential shipping/ transshipping
hub for access to NSR, NWP and Atlantic
 Greenland has potential for deep-water ports
 Finland is world leader in cutting-edge
icebreaking design and technologies, deep
expertise in ice management
 Sweden has technologies for icebreaking and
Arctic shipping
 U.S. sees increased international vessel traffic
in Bering Strait – Need for increased presence
 Canada lacks infrastructure along NWP
energy and raw materials, NSR is a viable
option for shipping through politically unstable
Suez Canal
 China: Potential to ship 5-15% of exports to
Europe through NSR by 2020

26. Arctic shipping - Options and possibilities
 Port & pier infrastructure development along
Arctic shipping lanes in Russia, Canada and
USA, also Iceland and Greenland
 New and updated facilities and services
 Mapping technologies for NSR & NWP
 Navigational and communication
technologies development, also better vessel
monitoring and surveillance to increase safety
 Search and rescue centers, emergency
preparedness in case of oil spills and pollution
is needed
 Ice management for improved safety and
mitigation of environmental risks
 Forecasting, monitoring & detecting
 Detect first-year ice vs. multi-year ice
 Physical ice management (ice breaking, iceberg
towing)
 Icebreaking technologies: Icebreakers,
icebreaking services, ice-class cargo vessels
 Transshipment hubs where cargo will be
loaded for rail, road or smaller vessel
shipments

27. Barents region shipping – Norway & Russia
Barents region ports are used to export products
from mining, oil & forest industries to Europe,
America and Southeast Asia
Murmansk
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Base for Arctic icebreaker fleet

Expansion of railroad capacity to port
Transshipment hub
Expansion possibilities to western shore,
warehouse and cargo terminal facilities
Arkhangelsk
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Bulk cargo gateway
Need for extensive icebreaker assistance –high
operating costs
Possible new deep-water area
Kirkenes
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Potential transhipment hub
Primarily iron ore to EU
Possible connection to Russian railway system
Tromsø

On-going development and capacity expansion
Narvik


Strategically important bulk cargo port
Expansion to continue

28. Barents region shipping – Finland & Sweden
•
•
•
•
Gulf of Bothnia offers access to the Baltic Sea and
towards southern Europe
Mainly for raw material transportation
Shipping is more economically feasible for the
industries in the area than using the rail network
Potential for growth
www.regjeringen.no/pages/38466475/JointBaren
tsTransportPlan200913r.pdf
Challenges
 Shallow waters
 Fairways and port must be dredged
regularly
 Icebreaking
 Winter ice increases shipping costs
 Sulphur directive
 Increase shipping costs 25-40%,
effective 2015
Umeå
 Forest products & general goods
 Connection to Vaasa for passenger and
freight traffic
Luleå
 Large volumes of bulk cargo
 Funding granted for capacity expansion
studies
Oulu
 Moderate bulk cargo volumes

29. Finland’s expertise in Arctic shipping
Ice management expertise
Aker Arctic Technology (AARC)
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
 Designed over 50% of world’s
Forecasting, prediction & tracking technologies
Detection & monitoring technologies
 Satellites, areal surveillance, ship-based
systems, radar technologies

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Ice management vessel operations
Online ice load monitoring, data archiving and
continuous training
World leader in Ice breaking
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60% of the world’s ice breakers built in Finland
80% of icebreakers designed in Finland
Nearly 100% of icebreaker propulsion units done in
Finland
Ice Class vessel design & technologies
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Ice strengthened cargo ships
Ice Class vessels for mineral transportation
Innovation in environmental technology for oil
spill recovery
 Oil spill clean-up products
 Oil recovery vessels
icebreakers
 Arctic & Antarctic research vessels
 Cargo vessels & offshore structures for
harsh climates
 Unique technologies (double-acting
vessels, reduced energy usage through
electric azimuthing thrusters (Azipods),
oblique icebreakers
 Technologies to meet new emission
standards
 New design on Arctic floaters and
multipurpose and ice management
icebreakers
 Conceptual and basic design work for
new polar icebreakers for Canada and
China

30. Arctic logistics - Railroads
Barents region

Railroads for mineral and
mining industry
transportation

Challenge: Two different
rail gauge standards in
Finland, Sweden, Norway
and Russia


Electrification of railroads
Possible 60km rail link
between Salla and Alakurtti
to connect Finnish and
Russian rail networks

Possible railway from
Rovaniemi to Sodankylä to
support mining industry in
central Lapland

Norway: Nordland line
along the coast – remote
control, increase in
capacity planned

31. Arctic logistics - Roads
Barents Region - Map
 Cross-border freight traffic expected to increase
significantly
 Narrow roads limit traffic volume growth
 Inadequate accessibility and road safety – lacking
by-pass lanes, central barriers
 Bottlenecks – Poor horizontal and vertical curvature,
difficult gradients
Norway
 Tunnels and bridges need rehabilitation
 E6 construction EUR 50M
 E8 high priority, EUR 53M for the next 4 years,
significant increase in funding up to 2023
 Mo i Rana from Umeå EUR 48M
 Bodø National road 80 EUR 250M 2014-2017
Russia: Murmansk – Kirkenes

Export of goods, passenger traffic between
Russia & Norway

E105 construction: EUR 46 million in Norway &
EUR 40-65 million in Russia

Different vehicle regulations regarding weight &
lenght

Cross-border cooperation is a prerequisite for
economic growth
Canada: Corridors for Canada


Total investment of $600M
 $415M Provincial-Territorial fund
 $185M National Infrastructure Fund
Finland
 Add capacity Kilpisjärvi – Palojoensuu (EUR 50 million)
Sweden
 National road 99 reconstructed 2013-2015 due to
mining expansion in Kaunisvaara
Northwest Territories transportation

Mackenzie Valley Corridor
Alaska: Road to resources



Umiat oil and gas fiel access road
Ambler mining distract access road
Road to Nome – Tanana access road

32. Barents region logistics

33. Corridors for Canada – Mackenzie Valley
 Corridor consists of existing marine


resupply route and winter road,
and proposed all-weather
highway and fiber optic link
Largest single investment in
Northwest Territories
$600 million over 10 years to
improve air, marine & road
transportation infrastructure
 Mackenzie Valley Corridor total
estimated value $1.7 billion
 $127M allocated to improve
Mackenzie Valley Highway (National
Infrastructure Fund)
 Includes bridge rehabilitation and/or
construction
 Completion of HW from Wrigley to
Tuktoyaktuk on the Arctic coast
Back to logistics

34. Road to Resources - Alaska
Ambler
 Ambler Mining district access
 Brooks Range East Corridor
 225-mile long from Dalton HW to
Coldford
 $430 million
Umiat
 Oil and gas field access
 $10M allocated
Nome
 Road to Nome – western Alaska
access would cost $3BN
 Road to Tanana project (part of
Road to Nome) $10M allocated
Back to logistics

35. Arctic Mining

36. Arctic mining overview – opportunity vs. uncertainty
+ Mining industry growth is driven by
+
+
increasing global demand for resources,
minerals and energy
Arctic coastal regions are more attractive
due to ocean transportation possibilities
– lower development costs
Technological improvements
+ arctic mining technically feasible and
commercially viable
+ Uncertainty about access to resources in
+
−
other regions in the world attract investors
to the Arctic
Mining offers long-term economic
development opportunities for the Arctic
Development is guided by commodity
prices
 Falling prices can cancel, delay or scale back
arctic mining projects
− Infrastructure lacking in most of the
Arctic region
Photo courtesy of Diavik Diamond Mine in Canada

37. Arctic mining – Barents region
 Norway, Sweden, Finland
& northeast Russia
 Strong mineral potential
 Area contains nearly 600
mineral deposits, 110 are
currently active mines
 More than 40 active metal
mines, 10 opened or
reopened in the last decade
 Current year-round Arctic
ports for mineral
transportation in Narvik &
Kirkenes in Norway and in
Murmansk, Russia
 New infrastructure
developments for roads,
rails and sea transportation
to support economic growth

38. Arctic mining – Finland, Sweden & Norway
 Sweden and Finland have




significant mining industries while
Norway relies mostly on its
hydrocarbon reserves
2011: Sweden & Finland
provided 28% of EU’s gold
production, 27% of zinc, 17.5%
of silver and 11% of copper
Governments pro-mining,
encourage exploration and seek
new investments – international
financing is needed to exploit new
mining potential
Geological information on
deposits is readily available in
Finland & Sweden
Transportation Infrastructure
investments are needed for longterm resource development
 Significant increase in transport
volumes as new mining developments
take place
Mining snapshot
18
16
16
14
Large active mines
13
Potentially large
deposits
12
10
10
8
6
Large unexploited
metal deposits
8
6
6
5
4
4
4
2
0
Finland
Sweden
Norway

39. Mining in Norway

Deposits of industrial minerals, building materials, stone,
metallic ores and energy minerals



Industrial minerals provide growth


Coal production in Svalbard
Iron ore production declining due to exhausted reserves
Producer of aluminum, cadmium, cobalt, copper,
ferroalloys, nickel, steel and zinc – Production is
decreasing
60% of mineral production is exported
 International companies dominate the market

Domestic share of mineral production supports local mineral
processing industry (plants & smelters)

Goal to increase exploration activity
 Annual budget of EUR 3.3 million to increase knowledge about mineral
Large active
mines
Potentially large
deposits
Large unexploited metal
deposits
Bjomevatn
Brattbakken
Engebofjellet
Fisketind Ost
Gallujav'ri
Lauvneset
Kjellmannsåsen Grinder
Nordli
Ortfjell
Selvåg
Tellnes
Rai'tevarri
resources in the region


Geological survey is mapping minerals of northern Norway
Nordic cooperation in mineral research

40. Mining in Finland
•
Gold, chromium, zinc, copper and nickel
•
Long mining tradition and readily available geological data
support mining industry
EUR 300 billion worth minerals in Finnish bedrock
Total of 50 mines and quarries operating in 2012
62% of EU’s cobalt production comes from Finland
Growth requires increase in transportation capacity
Internationally valued competences and equipment
manufacturing for mineral industry
Continuous growth needs international investments
•
•
•
•
•
•
•
All chromium to Outokumpu in Tornio for steel production
Large active mines
Potentially large deposits
Hitura
Jokisivu
Kemi
Kevitsa
Kutemajärvi
Kylylahti
Laivakangas
Pahtavaara Au
Pampalo
Pyhäsalmi
Siilinjärvi
Suurikuusikko
Talvivaara
Akanvaara LC
Akanvaara UC
Akanvaara ULC
Koitelainen LC
Perämaa
Sakatti
Soidinvaara
Sokli Nb
Large unexploited metal
deposits
Ahmavaara
Koitelainen UC
Konttijärvi
Lumikangas
Siika-Kämä
Sokli

41. Mining in Sweden

Sweden is the largest producer of iron ore in the EU – also a major producer of
copper, zinc, lead, gold and silver




Mines in northern Sweden produce iron ore, zinc, copper and gold
Mining employs 82% of workforce in the north
Plans to expand current production and open several new mines
Potential to increase mineral production three-fold by 2025 – greatest potential in
iron ore
 Requires better infrastructure for goods transportation and more efficient permitting process
Large active mines
Potentially large deposits
Large unexploited metal deposits
Aitik
Björkdal
Dannemorafjältet
Garpenbergsfältet
Gruvberget Fe
Kankberg nya
Kiirunavaara
Kristineberg
Lovisagruvan
Malmberget
Maurliden Västra
Maurliden Östra
Renström
Svartliden
Tapuli
Zinkgruvan
Akkavare
Häggån
Myrviken
Ranstad
Routivare malmfält
Rönnbacken
Smålands Tabergs gruvfält
Sundsberget
Tåsjö
Vinberget
Fäboliden
Lappmalmen
Laver-nya
Norra Kärr
Palotieva
Pattok

42. Arctic mining - Russia
 One of the largest mineral producers
 Continuous exploration for new

mineral deposits
Exceptionally rich in mineral resources
 More than 700 minerals have been
discovered
 Apatites, iron ores, nickel, rare earths,


semi-precious stones, diamonds
Year-round deep-water port in
Murmansk – access to north Atlantic
Vast mineral processing industry
 Iron
 Nickel
 Aluminum
 Apatite ore
 2008 over 8 million tons of ore and 110
000 tons of nickel produced in Murmansk
county
Kola peninsula & Karelia
 27 active mines
 World’s largest apatite deposit
 35 potentially large deposits
 38 large unexploited metal deposits
 Smelters and refineries
 Suffer from poor environmental
standards
 Pollution problem
 Growth in coal production in Siberia
& Far East
 Nornickel (Kola peninsula & Taymyr
peninsula)
 World’s largest nickel producer is
looking to invest $35bn by 2025 in
non-nickel mineral resource
production (chromium, coal, iron ore)

43. Mining in Alaska
•
•
•
•
•
Large deposits of gold, silver, copper, coal, lead and zinc
2012 mineral production valued at $3.4BN ($1.43BN north
Alaska)
3 refineries for gold and 1 for silver
Minerals are exported mainly to Asian markets
Road-to-resources: Ambler mining district (North) & Road
to Nome/Tanana (West) current projects
 Producing mines



 Red Dog: Zinc, lead & silver
 Fort Knox: Gold
 Greens Creek: Silver, zinc, gold, lead
 Kensington: Gold
 Pogo: Gold
 Usibelli: Coal
 Nixon Fork: Gold, copper
$330M invested in exploration projects
(90% from Canada)
 $34M northern Alaska
 $90M eastern interior
 $16M western Alaska
$340M in development projects
 $40M in northern Alaska
 $162M eastern interior
 $37M in western Alaska
Advanced exploration projects in Pebble,
Livengood and Donlin Creek (59% of
exploration expenditures), Bokan
mountain, Chuitna, Niblack, Upper Kobul
and Wishbone Hill

44. Mining in Canada


World’s largest mining countries
Mineral exploration & mining: key drivers of
economic growth in the north




Since 2004 Canada has attracted 16-19% of the
world share of mineral exploration
Half of income in NWT from mining
Significant deposits of gold, iron ore, diamonds,
uranium, base metals, cobalt, zinc and rare
earth elements
Geoscience problem: 73% of Nunavut is
unmapped or has inadequate geological maps –
geoscience information is critical for exploration
 Geological mapping is strongly supported by the
government
 Geoscience efforts north of 60 degrees

Canadian Space Program activities support Arctic
developments
 Space-ground infrastructure to advance the utilization of
satellite data

Inadequate public infrastructure - obstacle to
growth in resource sector

Long & complicated regulatory process -

$140 billion in mining projects over the next
decade


Broad supplier network for mining industry
challenge to new investments
Aging smelters and refineries in southern Canada

45. Geomapping (GEM) project areas
 Geomapping for Energy and Minerals Program (GEM)
 $100 million investment 2008-2013


$38.6 million in Nunavut
$15.6 million in Northwest Territories

46. Mining in Canada
Advanced Exploration Projects in the
Northwest Territories and Nunavut

Natural resource development in the northern
regions faces social, economic, infrastructural,
environmental and regulatory challenges

NWT has 4 procuding mines: 3 diamond & 1
tungsten + 2 advanced developments and 7 other
mineral projects – 2000 new mining jobs projected
by 2020
 Main regions: Dehcho region & Slave Geologic
Province

Nunavut: Growth in investments, Hope Bay and
Mary River projects combined value $ 6 billion
 Mary River investment estimate $40 billion by 2040

Corridors for Canada projects for transportation
infrastructure developments

Transportation access challenge
 Exploration costs in areas that are distant from
transportation are significantly higher than costs
closer to transportation networks

Energy access challenge
 Nunavut relies on diesel
 NWT benefits from hydropower (36% of total)
(Statistics Canada, 2012)

47. Mining in Greenland








Significant deposits of gold, uranium, iron ore, zinc and
rare earth elements
Government pro-mining, lifted 25-year uranium ban in
2013 (subject to Danish approval)
Bureau of Minerals and Petroleum only stop for permits
and licensing
Year-round access to ocean transportation, mineral
deposits close to shore
Development depends on new infrastructure and
international investments
One producing gold mine, tens of exploration projects
and potential developments
Deposits hold high-grade metals and minerals
Possibility of using hydropower
 Alcoa’s Aluminum smelter development




Limited infrastructure significantly increases exploration
and mining costs
Isua development by London Mining valued at $2.35
billion, includes a processing plant, 105km pipeline to
deep-water port and water & wastewater treatment plants
Greenland Minerals & Energy is developing $810
uranium & rare earths mine in Kvanefjeld, production to
start in 2017
Lack of skilled labor, environmental concerns
More information and detailed, interactive maps www.geus.dk

48. Mining in Iceland
 Scarce mineral resources
 Abundant renewable energy
resources
 Hydropower & geothermal
energy
 Large aluminum and
ferroalloy industries
 3 current aluminum smelters
and 2 new planned by Alcoa
& Century Aluminum
 Plants rely on imported raw
materials and inexpensive
geothermal and hydroelectric
energy
 Finna Fjord deep-water port
to support mineral shipping,
access to NSR & NWP

49. Arctic mining summary
Minerals in
Economy
Outlook
Canada
Industrial mineral mining $4.3
billion, metal mining $3.6 billion,
coal $900m
Exploration projects in Nunavut
& NWTerritories, infrastructure
development
Access to energy and
transportation networks, short
construction season, high costs
Nunavut: Hope Bay gold mine $2
billion & Mary River iron ore mine
$4 billion
Finland
Processor and refiner of copper,
nickel and zinc
Production of nickel & zinc likely
to increase, market interest in
rare earths
Attracting international
investments, transportation
capacity bottlenecks
Hannukainen iron ore mine (part of
Kaunisvaara in Swe), Sokli
phosphate mine
Greenland
Dependent on subsidies from
Denmark. Mineral industry to
promote economic
independency
New mineral deposits likely to
be discovered, govt pro-mining,
new prospecting & exploration
licensed issued
Lack of skilled workers, high
development costs
Isua iron ore mine by London
Mining $2.35 bn, Ilimaussaq rare
earths mine $2.3bn, Kvanefjeld
rare earths $2.3bn
Iceland
Exports 2% of global aluminum
& 1% ferrosilicon
Oil & gas exploration offshore,
aluminum industry to expand
Shortage of skilled workers
2 new aluminium smelting plants
Norway
Natural gas and petroleum
sectors dominate. Mostly for
exports
Exploration drilling in the
Barents Sea, hydropower,
industrial minerals
Attracting international
investments, geological mapping
of the north
Potential in Repparfjord in
Finnmark for copper
Russia
Mining contributed $273.3
million to GDP.14.6% of all
investments in economy to
mining industry.
Expansion in production &
holdings. govt regulation to
benefit beryllium, rare earths &
tin.
Remote locations,.high costs
Norilsk mining centre $3bn 10- year
investment plan
Sweden
Metal mining & metal products
dominate, leading mineral
exporter in EU
Base-metal, gold and iron ore
deposits are developed and
exploited actively,
Attracting international
investments, increasing
transportation capacity
Kaunisvaara (Sahavaara and Tapuli
mine sites) iron ore mine
Alaska
Exploration, development
investments and value of
mineral products $3 billion
Over $300m invested in
exploration + $300m in
development annually
Mining site access, remote
locations, high development costs
Ambler mining district (copper,
zinc, gold, silver, lead) includes $2.7
bn Road-to-Resources
Major Challenges
Biggest Projects

50. Mining – logistics

51. Processing Arctic metals and minerals
•
•
•
•
Mineral refineries and smelters require large amounts of
energy
•
Locations with access to inexpensive
hydropower attract mineral processing industry:
Iceland, Norway, Greenland, possibly Canada
Transportation challenge
•
Many Arctic mining sites are in remote locations,
transportation infrastructure requires significant
investments in roads, railroads and ports
China has significant processing industry with smelters
and refineries – Need for raw materials
Options: Refine locally or export raw materials for
further processing, infrastructure investments are
required regardless
•
•
•
•
•
•
•
•
Alaska: Processing plants, smelters and
refineries in lower 48 states
Canada: Aging refineries and smelters in south
Finland: Processor of copper, nickel & zinc
Sweden: Smelters for copper, gold, lead & zinc
Norway: Processing industry for domestic supply,
mine sites along the coast – ocean transportation
access
Russia: Large smelting & processing industry in
Kola peninsula
Iceland: 3 aluminum smelters + 2 new planned,
hydropower
Greenland: Ocean access, hydropower potential,
potential future mineral processing site
Mine, smelter and refinery production of copper

52. Metal industry and main export routes

53. Barents raw materials transportation developments
Russia, Finland, Sweden and
Norway’s joint planning
 Efficient Barents Region
transport system
 Internal connectivity
 External links to world markets
 Facilitate development and
opportunities for key industries
Gulf of Bothnia
 Different national regulations on
lenght and weight of vehicles
 Different railway gauges
 Lack of flight services east-west
– Major bottleneck
Main priorities
Biggest challenges
 Bothnian corridor: Oulu –
 Low standard on sections of
 Road 766km & rail 800km
 Luleå – Narvik
 Road 520km & rail 473km
 Vorkuta – Kotlas – Syktyvkar –
Arkhangelsk – Vartius – Oulu
 Road 1729km & rail 1517km
 Map
roads and railways
 Arctic winters and winter
maintenance
 Lack of deep-water ports in the
Haaparanta/Tornio – Umeå

54. Barents – raw materials transportation
In northern Sweden iron ore is
transported via the Iron Ore line
(Ofoten) for further shipment
 Two-thirds is shipped from the
port of Narvik to Rotterdam
 One-third is shipped from the port
of Luleå to the steelmill across the
Gulf of Bothnia in Raahe
 Iron Ore line, port of Narvik and
port of Luleå are critical to the
industry, along with the
connecting road network
 Port of Luleå handles 9 million
tons of goods annually, including
5.5 million tons is iron ore
 Port of Narvik is central for
Swedish and Finnish mining deep, ice-free port - handles 18
million tons of iron ore a year
Main smelters and refineries
 Steel
 Luleå (SSAB)
 Raahe (Ruukki)
 Tornio (Outokumpu)
 Copper – Skellefteå, Harjavalta
 Nickel - Harjavalta
 Zinc - Kokkola
 Ferrochrome - Tornio
 Iron - Mo i Rana (Norway)
 Aluminum - Mosjøen (Norway)

55. Barents transportation network
(road, rail, maritime)

56. Mining infrastructure in Alaska
•
•
Anchorage is the main export port in
Alaska followed by Fairbanks
Main destination is China followed by
Japan, Korea and Canada
 DeLong Mountain Transportation
System (DMTS) supports Red Dog
mine where ore is transported via
52-mile all-weather industrial road
to Red Dog/Kivalina port for
storage and further shipping
 Region is completely isolated, port has
no services
 Road-to-Resources projects in
Umiat, Ambler and Nome/Tanana
provide better access to mining
sites and more affordable raw
material transportation options
 Alaska Industrial Development
and Export Authority (AIDEA)
actively supports and offers
financing to mining industry
logistics developments
 Responsible for Delong Mountain
development

57. Mining infrastructure in Canada
 Current issues are wide-ranging
 Aging and inefficient community power
plants
 Limited broadband availability
 Short and unpaved airstrips
 Underdeveloped services at industrial
sites
 Most roads end north of 60 degrees
 Cooperation between different leves
of government and the private sector
is needed to develop infrastructure in
the northern regions
 International cooperation to
harmonize geo-reference standards
 Government support to capacity-
building and infrastructure in the north
 Communities are not served by all-
 Suggested Northern Infrastructure
 Nunavut: Mine start-up costs up to
 Initial investment of $1 billion over a
season roads
$1.6 billion (vs. Yukon $200 million)
because companies need to build
supporting infrastructure (roads, rail
& ports)
 Alaska-Canada rail link, $11 billion,
as a possible option for resource
transportation
Fund (NIF)
5-year period
 Finance transportation, energy and
community infrastructure needed for
resource development

58. Mining infrastructure in Greenland & Iceland
Greenland
 Ocean and air transportation
only
 No roads or railroads between


towns
Deep-water port potential
Current year-round ports in
Nanortalik and Sisimiut
 Mining sites along the coast
 1 operating gold mine, several
developments underway, active
prospecting
 Alcoa is planning an aluminum
smelter on the west coast south
of Nuuk
 Availability of low-cost hydroelectric
energy
 Significant infrastructure
investments required
Iceland
 3 current aluminum smelters
 2 on the west coast & 1 in the
east coast
 Finna Fjord deep-water port
development driven by
forecasted increase in shipping
in NSR
 Potential to support oil and gas
industry north and west of Iceland
 Developments in Greenland’s
mineral industry are a potential
source of business for the port

59. Business opportunities for Finnish companies
Arctic Ports
Arctic Mining
Working in
the Arctic
•
•
Mapping and navigation technologies, satellites
Icebreaking services, leasing icebreakers, designing and building
icebreakers (US, Canada, China & Japan)
Arctic marine tehcnology expertise, onshore & offshore
Ice management technologies
•
•
•
•
Cargo handling equipment and cranes
Port engineering and infrastructure equipment
Navigation technologies
ICT applications
•
Arctic
Shipping
•
•
Solution for sustainable mining: Energy efficiency,
recylcling, water treatment, technologies for minimizing
environmental impacts
Technologies, expertise & equipment for exploration, exploitation,
mine construction and mining activities
•
•
Wear-resistant special steels, ex. for mining equipment in harsh
arctic conditions (Ruukki)

60. Contact:
Finpro
Lasse Baldauf
lasse.baldauf@finpro.fi