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US economy crisis causes Pajala panic

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US economy crisis causes Pajala panic
09:24 CEST+02:00
The ongoing financial crisis in the US is causing growing concern among locals in the municipality of Pajala in the North of Sweden, whose future is largely dependent on an iron ore ore mine due to be opened by an American company.

The American mining concern Northland Resources has earmarked Pajala for the opening of the mine which will bring jobs and investment to the area.

However, inhabitants and officials are now nervously watching the share price of the company which has plunged in recent months.

In the past three months alone Northland Resources shares have plummeted by almost 50 percent, which is bringing a sense of fear to the small towns inhabitants.

“In the short term there is concern, but we are confident in the long term success of the project,” council head Kurt Wennberg told The Local.

He added that the work in preparation for the mine is going to plan and town councillors have a daily dialogue with the mining company.

Many locals in the municipality of just 6,300 people have bought shares in the company and as news spreads of the falling share prices, Wennberg admits there are fears.

“However, so far the time schedule has been followed exactly and there is no reason at present to suggest it will not continue to do so,” he added.

Despite the fact that many small investors are selling their shares, Karl-Axel Waplan, Northland Resources' CEO has urged caution.

“The best thing to do is to stay calm. Iron prices have barely gone down and there is still high demand for commodities. Northland isn't affected (by the financial crisis) at the moment, but if it falls into complete chaos, that is another thing,” he said.

If all goes according to plan, the mine will begin production in the final quarter of next year, with first shipments expected to start in the first quarter of 2013.

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