Information about mineral legislation in Finland

This document is an extract from the publication:

Kortman, C. ; Nurmi, P. A. & Vuotovesi, T. (comps.) 1996. Introduction to mineral legislation in Finland. 2nd revised edition. Espoo: Geological Survey of Finland. 8 p.

MINERAL LEGISLATION AND REGULATIONS IN FINLAND
1. MINERALS COVERED BY THE LAW
2. APPLICANTS FOR MINERAL RIGHTS IN FINLAND
3. PROSPECTING
4. DEFINITION OF TERMS
5. RESERVATION
6. CLAIM (EXPLORATION LICENSE)
7. MINING CONCESSION
8. GENERAL

 MINERAL LEGISLATION AND REGULATIONS IN FINLAND

This guide is an introduction to Finnish mineral legislation and regulations. It is for general information only, based on the situation in February 1996, and it has no legal status. The actual Mining Act and Decree are available in both the Finnish and Swedish language:

- The Mining Act (Kaivoslaki 503/65)
- The Mining Decree (Kaivosasetus 663/65)
- Amendments to the Mining Law (1427/92, 1625/92, 474/94, 1571/94, 208/95, 561/95 and 1076/95)

In the text below these will be referred to collectively as the Mining Law.


1. MINERALS COVERED BY THE LAW

The mineral substances covered by the Mining Law include about 50 metals and 30 minerals, as well as gems, marble and soapstone. For details, see the Law and amendments.


2. APPLICANTS FOR MINERAL RIGHTS IN FINLAND

Rights under the Mining Law may be granted to every Finnish citizen or corporate body, and also to any resident of a country in the European Economic Area (EEA). The same applies to all foreign corporations and foundations established according to the laws and regulations of any EEA member state, provided that their central administration and principal place of business are in one of the member states.

The applicant must present a valid certificate of registration issued by the relevant authority in the country of residence. Anyone applying for a right under the Mining Law must nevertheless have an address and an agent in Finland. The application must be drawn up in either of the official languages of the country, Finnish or Swedish.

The Ministry of Trade and Industry may, at its own discretion, also grant rights under the Mining Law to individuals and corporate bodies from outside the EEA.


3. PROSPECTING

Under the Mining Law, prospecting is considered to be a part of the so-called everyman's right, which is a special Nordic tradition, giving as a general rule public access to all land, public or private. Geological observations and measurements, as well as limited sampling, can be carried out everywhere, provided no damage is done to the land owner's property or to the environment. The land owner or the local registry office must be informed about sampling beforehand.

Prospecting may, however, not be carried out without the consent of the authority or owner in certain limited areas were public access is explicitly prohibited or restricted; nor in claim areas and mining concessions owned by another person or company; yards, gardens and parks connected with dwellings; churchyards and cemetaries. Damage and inconvenience arising out of prospecting shall be compensated for in full.


4. DEFINITION OF TERMS

Whosoever wishes to avail himself of the right to a mineral deposit referred to in the Mining Law shall apply for an exploration licence (in Finnish "valtauskirja") for the area.

Before applying for an exploration licence, the applicant has the right to reserve for himself priority (i.e. first right) to claim any mineral deposit within a stated area (reservation, "varaus") by making a notice of reservation ("varausilmoitus"). The reservation is also referred to as "reservation for claim" ("valtausvaraus").

On receiving his exploration licence the applicant or claimant ("valtaaja") has the claim right ("valtausoikeus") within the claim area ("valtausalue") specified in the licence to carry out exploration for minerals and/or ore deposits. The word "claim" as a noun is often used as a synonym for "claim area" and sometimes for "exploration licence", and as a verb for the process of applying for an exploration licence.

If the claimant can show that minerals appear in the claim area in such abundance and in such form that the deposit can probably be exploited, he may apply for a mining concession ("kaivospiiri").


5. RESERVATION

Before actually applying for an exploration licence, it is possible, but not obligatory, to make a reservation, i.e. file a request for priority (first right) to claim a particular area. The only purpose of the reservation is to give the applicant a reasonable period of time to delimit the area of interest and to prepare his application for an exploration licence. Priority to claim an area may be granted by submitting a notice of reservation to the appropriate regional Registry Office ("rekisteritoimisto"). The notice must include the applicant's name, occupation and address, and specify the province, municipality, and the size (each reservation not exeeding 9 km2) and precise geographical location of the area(s), supported by an appropriate map (for large areas at a scale of 1:200,000). The location and borders of the area must be marked on the appended map with such clarity that no uncertainties can arise. The notice of reservation should include an extract from the trade register or population register, if needed to identify the applicant.

The Registry Office records the notice, and forwards it to the Ministry of Trade and Industry. A reservation will not be granted for areas that are closer than 1 km to a claim area (either under application or granted) or a mining concession owned by another person or company. Nor will a reservation be granted for areas previously reserved until three years after the expiry of the previous reservation. The Ministry may, however, at its discretion grant a reservation earlier (minimum one year after the expiry), if the applicant presents good reasons and a plan for the investigations (208/95). The granting of a reservation does not permit drilling or sampling without the landowner's permission. Conversely, a reservation does not exclude other parties from prospecting within the reserved area (under the before-mentioned everyman's right).

The person filing the notice of reservation enjoys priority in applying for a claim (exploration licence) within the reserved area for one year from the date of filing. The period can be reduced to four months at the discretion of the Ministry (208/95). Under the Stamp Duty Law a sum of FIM 1000 must be paid for each area reserved (1243/95). Reservations are not transferrable, and they cease when the exploration licence has been issued.


6. CLAIM (EXPLORATION LICENCE)

An exploration licence entitles the holder (individual or company) to carry out exploration activities in the claim area with or without the consent of the landowner. The claimant must, however, compensate the landowner in full for any permanent or temporary damage or inconvenience caused by the exploration activities inside or outside the claim area. The claimant shall also act in compliance with environmental legislation and other laws and regulations.

The maximum area permitted for each claim area is 1 km2, and the area must be coherent and of an appropriate shape. The boundaries of the claim descend vertically.

An exploration licence cannot cover the following areas (claim impediments):

1. Another claim area, mining concession or related auxiliary area, or an area for which a mining concession has been applied, or in an area currently reserved to another party;
2. Previous claim areas or mining concessions without the permission of the Ministry of Trade and Industry, until five years have elapsed since their expiry;
3. The restricted border zone along Finnish national frontiers without permission of the Council of State;
4. A fortified area and surrounding restricted areas;
5. An area closer than 30 m to an airport, road or street, railway or canal;
6. An area closer than 50 m to a building in permanent use as a dwelling or work site currently or in the future, or to a reserved building site where construction has begun, or to a public building or plants, or to a power line or transformer of over 35 kV, or to a garden or park adjoining a dwelling;
7. Industrial plants and associated storage and waste areas;
8. A churchyard or cemetery.

The claim application must be addressed to the Ministry of Trade and Industry and must include:

1. The name, occupation, domicile and address of the applicant, and a statement to the effect that the applicant is eligible to file a claim, supported by an extract from the trade register or population register identifying the applicant.
2. The area where the deposit is presumed to lie, specifying the province, municipality, village and the property's name and register number;
3. The extent (hectares), precise geographical location and outer borders of the claim area, including the borders of any holdings inside the claim, all indicated on the appended map (at the scale of 1:20 000 or 1:10 000) with such accuracy that no uncertainty can arise, together with a statement (by local authorities or persons familiar with the area) to the effect that no impediments to the claim exist;
4. A statement about what mining minerals are presumed to occur in the area, the grounds for the presumption of their occurrence, and an estimation of the extent and type of exploration work required;
5. A proposal for the name of the claim.

All applicants must enclose with their first application an original document, issued by the appropriate authority of their own country, providing reliable evidence of the identity of the applicant (e.g. certificate of registration).

The effective date of the application is the day when it has been received by the Ministry of Trade and Industry. The claim is valid from the day of issue of the exploration licence. The period of validity is a minimum of 2 and a maximum of 5 years, depending on the estimated amount and type of exploration work required. In certain cases the Ministry may, at its own discretion, grant a maximum extension of three years for the claim.

If more than one person has made an application concerning the same area, the person who first made the application has priority.

The claimant has the right to carry out exploration work on his claim to ascertain the extent and quality of the deposit, and to use ground outside the claim for constructing power lines and water pipes.

With the exception of gold (and its by-products) panned within state-owned areas, the claimant may not, without permission of the landowner, utilize mineable minerals in the claim in any way or to any extent other than that required for feasibility and related studies.

The claimant is entitled to transfer his exploration concession to another person eligible to claim. Such a transfer must, however, be reported to the Ministry of Trade and Industry.

A stamp-duty of FIM 2500 is charged for granting the claim (1630/92). For each calendar year the claimant must pay a claim fee of FIM 60 per hectare to the landowner(s), and FIM 40 per hectare to the Ministry of Trade and Industry, however, the minimum fee being FIM 400 (1571/94, 208/95).

Within one year of expiry of the claim, the claimant must submit a report to the Ministry of Trade and Industry detailing all exploration activities conducted on the claim and the results obtained. The claimant has to surrender a representative portion of the drill cores and drill logs to the National Drill Core Depot within five years of the expiry of the claim (208/95).


7. MINING CONCESSION

A mining concession will be granted only if the deposit is shown to be technically and economically exploitable. The reliability of both the potential exploiter and the deposit data are assessed critically.

An application for a mining concession must be addressed to the Ministry of Trade and Industry, and must be made while the claim is still valid.

The concession area must be a coherent and appropriate area, and include part of the area contained within the original claim. The concession area may include other areas necessary for the exploitation (auxiliary areas). The boundaries of the concession area descend vertically.

An application for a mining concession must include:

1. A map showing the location and borders of the claim, the concession area applied for, and the relevant holdings;
2. A detailed report on exploration activities conducted on the claim and the results;
3. A report on the factors determining the extent and form of the concession area;
4. The names and addresses of the persons whose rights are affected by the concession;
5. An extract from the land register on the holdings concerned; and also
6. A proposed name for the concession.

As of September 1st 1994 applications must also be accompanied by an environmental impact assessment in accordance with legislation drafted by the Ministry of Environment (468/94, 471/94 and 474/94).

Provided the application meets the requirements of the Mining Law, the Ministry of Trade and Industry will give directions for the execution of the mining concession, and appoint a survey engineer. For further information on the procedure, please refer to the Mining Law.

As soon as the execution has been legally accepted, the Ministry will issue a mining certificate as proof of the mining right, and the concession holder can begin to mine, process and utilize all the extractable minerals within the concession.

The concession holder is entitled to transfer his concession rights to another eligible person or company. A note of transfer must then be added to the original concession certificate.

A stamp-duty of FIM 5800 is charged for granting the concession rights (1630/92). If the concession holder does not own the concession area and the auxiliary areas, he must pay the landowner(s) an annual concession fee for the concession right. The fee is determined by the Ministry and stipulated in the Decree, at present FIM 120 per hectare (968/88). As compensation for minerals extracted, the concessionary must in addition pay the landowner(s) a reasonable annual mining fee, the amount depending on the value of the minerals minerals mined and processed, and other economic factors.


8. GENERAL

The operating environment in Finland is generally favorable for exploration and mine development. The country has a long mining history and a traditional focus on primary resources such as mining, forestry and farming. Finnish mining equipment manufacturers are recognized throughout the world's mining community. There is a well developed infrastructure with good port facilities, extensive high voltage power grid and a comprehensive road network.

The corporate tax rate is at present 28 % (early 1996). The general value added tax rate (VAT) is 22%. The monetary unit is Finnish mark (1 FIM = approx. 0.22 US$ in February 1996).

On January 1st, 1995 Finland became a full member of the European Union.

For further information, please contact:

MINISTRY OF TRADE AND INDUSTRY
Senior Inspector of Mines Dr. Heikki Vartiainen
Aleksanterinkatu 4
P.O. Box 230
FIN-00171 HELSINKI
FINLAND
Tel: +358 9 160 3727
Fax: +358 9 160 2644

Email (secretary): pirjo.savolainen@ktm.vn.fi




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