The Law:
This November, the Finnish government has included a number of reforms for its mining industry. Chiefly, the government would levy a 0.6% royalty on a number of metallic minerals. Industrial minerals would also be taxed, at 0.2EUR per tonne. Additionally, the Industry would have an increased tax liability. Any company extracting minerals from Finnish bedrock falls under this category. If the proposed reform passes, it would come into force in 2024, though there is some discussion of earlier implementation. Both environmental groups and industry advocates are unhappy with the law in its current state. Environmentalists lambast it as a compromise, while miners see it as a long-term risk.
What might be the consequences?
Firstly, should the law come into effect, the Mining and Metals Industry in Finland should expect increased costs. The currently proposed royalties are not massive, but the addition of a tax liability can be cause for concern. In both cases, the value of the mineral is calculated by its market prices. With demand set to rise, companies will face incrementally rising costs year to year. Furthermore, the royalties, while low, provide the government with an easy way to appease environmental lobbies. The percentages and rates could steadily increase, adding another burden to the mining industry’s expenses. It is possible that this law is the first in a trend of new regulations for miners.
What should businesses keep in mind?
Even if the prosed legal amendments do not pass in the Finnish Riksdag, the bill does point towards a growing trend. Mining companies are in the public spotlight as the world decarbonizes. The Industry will be a key part of future decarbonization and electrification and must maintain a steady supply of metals. Business leaders need to plan for more regulations and create strategies to offset legal risks. Join key decision makers at the 2nd Energy Transition for the Metals and Mining Industry conference, on January 19-20th, in Toronto, Canada. Industry leaders will gather to discuss and exchange the best practices for implementing green fuel and sustainable infrastructure. Visit future-bridge.eu or follow us on our social media to keep track of other events about sustainability in the mining and metals industry.
