• Sweden edition
 
'Sweden's mineral wealth is sold too cheaply'
LKAB's mine in Malmberget. Photo: Carl-Johan Utsi/TT

'Sweden's mineral wealth is sold too cheaply'

Published: 12 Jan 2014 09:13 GMT+01:00
Updated: 12 Jan 2014 09:13 GMT+01:00

While concession fees are kept deliberately low in order to attract miners, critics say all nine million Swedes could and should benefit the same way that their Norwegian neighbours all profit from their national oil wealth.

"This is something we own together," said Jesper Roine, associate professor at the Stockholm School of Economics. Besides, he added, minerals have an intrinsic value even before they are dug out of the earth, and they should be priced accordingly, the way all other raw materials are priced.

As it is now, the Swedish state earned only a little over €30,000 ($41,000) in concession fees in 2012, the last year for which figures were available.

Why this tiny number? Because fees are a mere 0.2 percent of total output value, of which three quarters go to the landowner and only one quarter ends up in the state treasury.

By comparison, Canadian provinces typically charge 10 to 15 percent, and Australia implemented a 30 percent mining tax in 2012.

Some economists and environmentalists suggest increased mining fees in order to safeguard the natural environment of Sweden's mineral-rich north, while also saving up for a huge nest egg to help future generations.

Behind the debate is a fact that may surprise: Sweden is known for its slick design and ingenuous high-tech, but it also produces more iron than any other European nation and boasts the world's two largest underground ore mines.

Its mineral resources are attracting the attention of business heavyweights from across the globe.

Avalon Minerals and Dragon Mining, both Australian companies, have prospecting and concession licences in Sweden. Canadian company Eurasian Minerals has exploration projects in Sweden, one of them in cooperation with Chile's Antofagasta.
 

The low concession fees do not mean that Sweden is getting no revenue from mining.

The Swedish government earns 12 billion kronor (€1.3 billion, $1.8 billion) from mining operations via dividends from state-owned mining company LKAB and via regular taxes.

But to observers, such as Roine, this is not enough.

He is the co-author of a recent report on Swedish earnings from mineral extraction that proposes new tariffs to compensate for the gradual depletion of resources and a state owned fund similar to Norway's oil fund, which invests the billions the country earns to last for future generations once the resources are gone.

"It's not the same as saying that the companies... shouldn't be compensated for their costs and the risks they are shouldering. They should absolutely be paid for that," he said.

"But nevertheless it's the case that the business doesn't materialise out of thin air. Some of the value of the mineral wealth already exists from the outset, and this makes it a very special industry compared with others."

Sweden has been ranked in the top ten of attractive mining nations three years in a row by the independent research organisation Fraser Institute, this year only topped by neighbouring Finland. Low fees, low corruption, good infrastructure and a stable society are some of the attractive factors.

But analysts and the government say the fees must be low to keep miners coming and investing in Sweden, thus playing an important role in creating jobs and economic development.

"The government is currently not prepared to increase the mineral fees," said state secretary Haakan Ekengren, at the Ministry of Enterprise, Energy and Communications.

He gets backing from accounting company PwC's mining and metal analyst Carl-Wilhelm Levert, who supported the low fees.

"The Swedish mining industry is an important engine for Swedish economy," he said. "Swedish fees compete on a global market and we already have high extracting fees due to low ore levels and high safety- and environmental requirements."

"It is also important for the employment in rural areas and an increased mineral fee doesn't create better conditions - rather, it is important that we continue to support exploration because it is not until they become operative mines that we see large positive effects like new jobs and investments."

AFP/The Local (news@thelocal.se)

Your comments about this article

Today's headlines
International
Sweden's 'most dangerous art' on sale
A Danish site is selling the works that the Swedish state wants destroyed. Screenshot: www.entartetekunst.dk

Sweden's 'most dangerous art' on sale

Work by controversial jailed Swedish artist Dan Park is on sale online and could reach a gallery in Copenhagen, despite a previous exhibition being pulled. READ  

National
Top Swedish skier killed in Chile avalanche
Andreas Fransson, left. Photo: Markus Alatalo

Top Swedish skier killed in Chile avalanche

UPDATED: The bodies of two of the world's top skiers, Sweden's Andreas Fransson and JP Auclair from Canada, were found on Tuesday after they were reported missing in an avalanche in the Andes. READ  

Politics
Coalition promise to boost welfare and jobs
Social Democrat leader Stefan Löfven. Photo: TT

Coalition promise to boost welfare and jobs

UPDATED: The Social Democrats and the Greens have agreed to raise unemployment payments and promised to create more jobs in the construction industry, The Local has learned. READ  

National
Ikea recalls elk pasta
Two types of pasta are affected. Photo: IKEA

Ikea recalls elk pasta

Ikea has pulled two different types of elk-shaped pasta from its stores in Sweden. READ  

Presented by Regus
How to get your own great office in Stockholm
A woman using a Regus workspace. Photo: Regus

How to get your own great office in Stockholm

Stockholm's business climate is hotter than ever, which leaves start-ups and business travellers hunting high and low for flexible office space. The solution is easier than they think. READ  

National
King Carl XVI Gustaf opens parliament
King Carl XVI Gustaf arriving on Tuesday afternoon. Photo: TT

King Carl XVI Gustaf opens parliament

BREAKING: Sweden's post-election parliament is meeting for the first time following a fanfare opening from King Carl XVI Gustaf. READ  

Opinion
Should Sweden's school age be raised?
A high school in Stockholm. Photo: TT

Should Sweden's school age be raised?

After the new coalition announced plans to extend Sweden's compulsory schooling until the age of 18, The Local asked two Swedes at high school if they agreed with the idea. READ  

Brand stories
JohannaN: beautiful jewellery with a story

JohannaN: beautiful jewellery with a story

Just 27 and already living off of her own designs, some may consider Johanna Nilsson lucky. But she doesn't believe in luck. She's the founder of a jewellery line blending sustainability, subtle style, and Scandinavian simplicity - and it's taking the world by storm. READ  

International
Sweden slammed for ecological footprint
Sweden should increase its renewable energy according to WWF. Photo:TT

Sweden slammed for ecological footprint

Sweden is among the world's top ten polluters according to one of the largest scientific studies looking at the impact of humans on earth, produced by the WWF. READ  

Society
Swede's necklace found after 52 years in lake
Ing-Marie Olofsson whose necklace was found. Photo: Private

Swede's necklace found after 52 years in lake

A 66-year-old Swedish woman got the surprise of her life when a fisherman returned the necklace she dropped in a lake at the age of 14. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
National
Apology for Swedish model's stolen photos
Politics
New coalition agrees on defence and migration
Fastighetsbyrån
Gallery
Property of the week: Botkyrka
Education
New government to make school compulsory to 18
Politics
Sweden Democrat wins Deputy Speaker spot
Blog updates

28 September

Spoiled Doyle (Blogweiser) »

"What you gotta watch out for in Sweden is the good stuff. http://www.youtube.com/watch?v=Re_EzUe6xpI In Sweden, it’s the good things you have to watch out for. Video on @TheLocalSweden http://t.co/rAb8eGFdTD pic.twitter.com/w37YYwMXy1 — Joel Sherwood (@joeldsherwood) September 29, 2014 " READ »

 

26 September

 (The Local Sweden) »

"Hi readers, Autumn swept into Sweden at the start of this week with snow in the north of the country and flooding in the south. As well as a change in the weather, Sweden’s change in political direction became clearer, with Social Democrat leader Stefan Lofven formally announcing his party would work with the Greens as..." READ »

 
 
 
National
Swedish scientists sneak Bob Dylan lyrics into articles
Lifestyle
The five best Swedish songs of the month
Gallery
People-watching: September 28th
National
When Italian style meets Swedish simplicity
Lifestyle
Review: Sweden's first alcohol-free nightclub
Gallery
In Pictures: The MS Estonia disaster
Lifestyle
Ten things expat women notice in Sweden
Politics
What's next on Sweden's political stage?
Gallery
Sweden's 2014 election: Most memorable moments
Society
What's on in Sweden
Gallery
People-watching: September 24th
Seaman Oliver Gee with his first lobster
Lifestyle
How to catch the first lobster of the year
Gallery
In Pictures: Fredrik Reinfeldt through the years.
Society
Plucked out of Canada for love and guitars
Politics
How Sweden Democrats went mainstream
Politics
Scandinavia and Scotland: closer links?
Sponsored Article
How to start a business in Stockholm
Society
Why is Stockholm's Södermalm so cool?
Politics
Sweden elections: Who's who?
Sponsored Article
Introducing… Insurance in Stockholm
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

850
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se
If you want to drink, that’s your business.
If you want to stop, we can help.

Learn more about English-language Alcoholics Anonymous in Sweden. No dues. No fees. Confidentiality assured.
AA-EUROPE.ORG/SWEDEN