Water situation at Terrafame mine remains challenging due to the decision of the Vaasa Administrative Court 28.4.2016 16:31

The Vaasa Administrative Court has today, 28 April 2016, issued its decision regarding the appeals made on the discharge pipe into Lake Nuasjärvi and other issues related to Terrafame’s environmental permits. The decisions of the Administrative Court set the sulphate quota limits of the discharge pipe fairly low and converted the environmental permits for the discharge pipe and the whole mine into temporary permits.

For the future operations and ramp-up of the Terrafame mine, the decisions of the Administrative Court mean that management of the water situation at the mine will be challenging also in the coming years, and the extra purified waters cannot be discharged within the planned schedule. The decisions enable the continued ramp-up of the mine’s operations in principle, but the imposed sulphate quotas for the discharge pipe as well as the temporary nature of the environmental permits will likely make it very difficult to continue the financing negotiations with private investors.

According to the decision of the Administrative Court, the sulphate load of the discharge pipe is limited to a maximum of 15,000 tonnes per year. The maximum monthly load is 2,000 tonnes per month during the open water season and 1,000 tonnes per month when the watercourses are ice-covered, including the period of spring floods. The environmental permit granted by the Northern Finland Regional State Administrative Agency in 2015 set a maximum annual level of 24,000 tonnes for the sulphate discharge for three years after the discharge pipe was taken into use. After the first three years, the maximum level was set to 10,000 tonnes per year.

In addition, the Administrative Court converted the environmental permit of the discharge pipe into Lake Nuasjärvi into a temporary permit valid until 31 August 2017, after which Terrafame must apply for a new environmental permit for the discharge pipe. Also the environmental permit for the mine from 2014 was converted into a temporary permit valid until 31 August 2017.

Terrafame is considering appealing the decisions of the Vaasa Administrative Court to the Supreme Administrative Court after examining the decisions in detail.

“The conditions are good for the mining operations to become profitable in the long-term. For this reason, it is particularly unfortunate that for all practical purposes, the imposed terms of the permit prevent solving the water situation as planned,” says Lauri Ratia, Chairman of the Board of Terrafame Ltd.

“Originally, Terrafame applied to the Northern Finland Regional State Administrative Agency for an annual sulphate quota of 30,000 tonnes for the discharge pipe. The amount requested was based on a careful impact assessment, which led to the estimation that using the discharge pipe to remove the purified waters from the mining area does not cause significant negative environmental impact. Within the permit quota applied for or the original terms of permit granted by the Northern Finland Regional State Administrative Agency, Terrafame could have removed the excess waters, resulting from previous activities at the mine, from the mining area in a controlled manner within three years. In our view, the decision of the Administrative Court does not contain any justification based on the environmental impacts for reducing the sulphate limits from the amount of sulphate granted by the Northern Finland Regional State Administrative Agency,” Ratia says.

“It is clear that removal of the extra waters will now take years longer. It is also very likely that to ensure dam and environmental safety during the rainy and snow-melt seasons, Terrafame will have to conduct similar additional discharges that it had to carry out in December 2015 and now in April due to the interim decision of the Vaasa Administrative Court issued in September 2015. It is also worth noting that the water situation at the mine must be resolved in any event, even if it was decided to close down the mine,” Ratia continues.

“The ramp-up of the Terrafame mine has proceeded as planned in 2015 as well as during the early 2016, which has given a good basis for negotiations on funding. Solving the water situation caused by previous operations at the mine and ensuring environmental safety have been one of the main conditions for obtaining private financing. According to our estimates, the decisions of the Administrative Court will lead to a situation where obtaining private financing for Terrafame will be very difficult, if not impossible. It should be noted that in any case, Terrafame will need additional capital still in summer 2016,” concludes Matti Hietanen, CEO of Terrafame Group Ltd.

Information about the discharge pipe

The use of the discharge pipe into Lake Nuasjärvi began after a trial period in November 2015. The discharge pipe is a prerequisite for treating the problem caused by the extra waters accumulated at the mining area due to previous operations at the mine, in an environmentally sustainable manner.

In April 2015, the Northern Finland Regional State Administrative Agency granted an environmental permit for diverting purified waters from the mining area through the discharge pipe into Lake Nuasjärvi. According to the permit, a maximum level of 24,000 tonnes was set for the sulphate discharges s for three 12-month periods after the discharge pipe was taken into use. After the first three years, the maximum sulphate discharge was set to 10,000 tonnes per year. The permit granted by the Northern Finland Regional State Administrative Agency was appealed to the Vaasa Administrative Court.

On 10 September 2015, the Vaasa Administrative Court issued an interim decision, halving the discharge pipe’s sulphate quota to 1,000 tonnes per month. This decision limited the amount of water discharged through the pipe to one half of the planned volume. Due to this, Terrafame had to resort to additional discharges of purified waters to nearby watercourse areas in December 2015 and in April 2016 to secure dam and environmental safety.

The purified water being diverted into the discharge pipe has clearly fulfilled the limits set by the environmental permit, and the water quality of Lake Nuasjärvi has remained at the level of previous years during the use of the discharge pipe. The purified water flowing through the discharge pipe is monitored continuously through measurements, sampling and field inspections performed at the mine and in Lake Nuasjärvi. The latest measurement results and other information about the discharge pipe and water measurements are available at www.terrafame.fi/ymparistotarkkailu (in Finnish).

 

Further information and interview requests:

Terrafame Ltd.
Chairman of the Board Lauri Ratia, Tel. +358 50 2922

Terrafame Group Ltd.
CEO Matti Hietanen, Tel. +358 40 823 8806

 

Terrafame Ltd. is a Finnish mining company producing primarily nickel and zinc by bioheapleaching at its mine located in Sotkamo. The aim is environmentally sustainable, safe and economically viable mining operations. Terrafame is owned by Terrafame Group Ltd.

Terrafame Group Ltd. is a special-purpose company wholly owned by the State of Finland. It is responsible for managing the state ownership and exercising the owner's power at Terrafame Ltd. Terrafame Group's role is to secure private supplementary financing and support the stabilisation and development of the mining company's operations. Terrafame Group is also responsible for helping the development of new technological solutions related to mine water purification.