Arctic review logistics and mining – Future Watch report
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    Arctic review logistics and mining – Future Watch report Arctic review logistics and mining – Future Watch report Presentation Transcript

    • Arctic Review 2013 - Logistics & Mining
    • 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
    • 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
    • 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
    • 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
    • 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
    • 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       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
    • 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
    • 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
    • Russia  Energy giant: Oil and       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
    • 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
    • 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
    • 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
    • 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
    • Energy & mining developments in the Arctic
    • Arctic Shipping & Logistics
    • 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.          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
    • 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
    • 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       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
    • 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
    • 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
    • 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
    • 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
    • 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
    • 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
    • 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
    • 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    Base for Arctic icebreaker fleet  Expansion of railroad capacity to port Transshipment hub Expansion possibilities to western shore, warehouse and cargo terminal facilities Arkhangelsk    Bulk cargo gateway Need for extensive icebreaker assistance –high operating costs Possible new deep-water area Kirkenes    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
    • 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
    • Finland’s expertise in Arctic shipping Ice management expertise Aker Arctic Technology (AARC)    Designed over 50% of world’s Forecasting, prediction & tracking technologies Detection & monitoring technologies  Satellites, areal surveillance, ship-based systems, radar technologies   Ice management vessel operations Online ice load monitoring, data archiving and continuous training World leader in Ice breaking    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    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
    • 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
    • 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
    • Barents region logistics
    • 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
    • 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
    • Arctic Mining
    • 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
    • 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
    • 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
    • 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
    • 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
    • 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
    • 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)
    • 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
    • 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
    • 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
    • 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)
    • 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
    • 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
    • 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
    • Mining – logistics
    • 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
    • Metal industry and main export routes
    • 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
    • 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)
    • Barents transportation network (road, rail, maritime)
    • 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
    • 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
    • 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
    • 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)
    • Contact: Finpro Lasse Baldauf lasse.baldauf@finpro.fi