Norway too much? The environmental risks of mining sector growth

By IM Staff
Published: Saturday, 26 August 2017

Scandinavia is a significant exporter of industrial minerals, but opportunities for growth in supplying raw materials for new technologies are forcing countries like Norway to take notice of their environmental obligations, Sarah Gibbons, IM Correspondent, finds.

Norway1

Norway has long been an important supplier of minerals to Europe, but the country is coming under increasing pressure to balance its ambitions for mining sector growth against environmental sustainability.

In 2013, the Norwegian ministry of trade and industry produced a "Strategy for the Mineral Industry", which sought to enhance Norway’s attractiveness to mining companies while allaying the fears of the environmental protection lobby.

"The Norwegian mineral industry shall be among the world’s most environmentally friendly," the policy said, stressing that "mining companies must show social responsibility".

Norway’s non-metallic mining industry is a significant earner for the country. According to the Geological Survey of Norway (NGU), in 2015, 52% of the industrial minerals produced in the country were exported.

These included ground calcium carbonate, for use in paper manufacturing; high purity quartz (HPQ), used in glass, ceramics, optic and electronic instruments and solar cells; graphite and lithium, used in lubricants and batteries; titanium dioxide (TiO2) and titanium slag, used respectively as a pigment in white paint and in titanium metal.

Dolomite and marble are also mined in Norway. Hustadmarmor AS, owned by Swiss industrial minerals conglomerate, Omya, is the world’s largest supplier of ground marble filler to the international paper industry from its operations in More og Romsdal county, in northwest Norway.

Norway is the biggest global producer of olivine, a magnesium-iron silicate used in iron and steel production as a substitute for dolomite to reduce CO2 emissions from steel plants, and to absorb heavy metal pollutants in a variety of applications.

At Aheim, also in More og Romsdal, Sibelco Nordic AS, a local subsidiary of Belgium-based Sibelco, extracts olivine from one of the world’s largest and purest olivine deposits where reserves are estimated to be more than 500m tonnes. The company’s sales in 2011 were 2.2m tonnes, about 40% of global olivine production. Most is exported to Europe, along with quartz, feldspar and nepheline syenite also produced by Sibelco Nordic.

With mines on the northern island of Senja, Skaland Graphite AS is one of only two producers of flake graphite in Europe.

In Naustdal municipality, in western Norway’s Sogn og Fjordane county, large deposits of rutile, with an estimated in situ value of Norwegian Krone (NOK) 180bn ($22.8m*) have been identified.

The Quartz Corp Norway, one of the world’s leading HPQ producers, owns a mine and processing plant at Drag, in Nordland county, northern Norway, while Elkem Salten, a subsidiary of Norwegian mineral group Elkem, is building a new quartz mine at Nasafjell, also in northern Norway, close to the Swedish border. 

And in the Hjerkinn area, south-central Norway, Sibelco Nordic has a significant nepheline syenite operation.

A vital industry

The NGU calculated that the country’s total mining industry turnover was NOK12.5bn ($1.6bn) in 2015, with sales volumes of 98m tonnes – slightly up from 2014’s figure of 96m tonnes. 

Norway’s sales of industrial minerals, according to the NGU, fell slightly however to NOK2.5bn ($316m) in from NOK2.7bn ($341m) in 2014.

Analysts Euromonitor estimated that Norway consumed 72.5bn tonnes of non-metallic, non-energy minerals domestically in 2016, up 0.2% on 2015 figures which were in turn up 0.6% from the previous year. 

Euromonitor dessignates this category as "domestic material consumption", which measures the total amount of materials directly used by an economy and is defined as the annual quantity of raw materials extracted from the domestic territory, plus all physical imports minus all physical exports.
Norway’s most valuable non-metallic mineral export products in 2015 were ilmenite, TiO2, olivine, nepheline syenite and quartz/quartzite, according to NGU data. 

Norway has large resources of titanium minerals and Europe’s largest rutile mine is being developed by Nordic Mining at Engebo Mountain, in the Sunnfjord region, western Norway.

A spokesperson for the Norwegian Mineral Industry Association (Norsk Bergindustri) told IM that there is a healthy pipeline of titanium mineral developments in Norway. 
"One of our members, Titania AS, is looking to develop the world’s largest ilmenite deposit and Nordic Mining was recently given the go ahead to develop [the Engebo] rutile mine. This implies that momentum within the industry is positive," they said.

"Technological development is increasing the world’s need for industrial minerals and Europe is a large mineral consumer with low self-sufficiency," they added.

Nordic Mining has said it is expecting to produce 100,000 tpa rutile concentrate and 100,000 tpa garnet concentrate from Engebo. The decision to produce garnet as a by-product was based on a new Norwegian government regulation that allows for increased use of silica minerals in abrasive applications – a move highlighted in the US Geological Survey’s 2013 Minerals Yearbook, released in 2014. 

Commenting on Nordic Mineral’s Engebo deposit, the USGS said that the 2.5km-long rutile-bearing eclogite body reportedly contains a mineral resource of 154m tonnes eclogite, at an average grade of 3.8% rutile.

Nordic Mining has signed a memorandum of understanding with leading pigment producer Cristal Global Inc, a Saudi Arabia-based corporation, to develop rutile products from Engebo ore to meet Cristal’s titanium raw material specifications.

The company has also acknowledged that it intends to take advantage of growing demand for garnet, which is increasingly replacing quartz sand in various applications as an environmentally friendly substitute, while its use in water-jet cutting and abrasives is also expected to increase.

Environmental clash

Projections for strong growth in Norway’s mining industry have prompted environmental concerns in a country where conservation issues carry strong political weight.

In anticipation of likely opposition, most mining companies in Norway go to great lengths to demonstrate how they plan to minimise the environmental impacts of their operations. 

At the Engebo project, Nordic Mining has said its plan to dispose tailings into a fjord at a depth of 300 metres is a safe way of getting rid of its mine waste. Norway’s Ministry of Climate and Environment apparently agree, having granted all the necessary environmental licences to the company.

But Greenpeace Norway is fighting the proposals and describes Nordic Mining’s intention to dump tailings in fjords as "unacceptable".

A spokesperson for Greenpeace said: "We strongly urge Norway to follow international practices on this. The issue of dumping of mining waste is a big and ongoing conflict in Norway."

"We believe Norwegian mining waste must be handled in a safe way in land, and eventually filled back into the mine. Dumping it at sea just because it is cheap is no solution."

A report by the Nordic Council of Ministers – a regional body uniting Norway with Sweden, Finland, Denmark and Iceland – released earlier this year, entitled "Towards Sustainability in Nordic Mining", highlighted the need for the sector to improve its stance on protecting the environment.

It argued that given the economic significance of the Nordic mining sector, "it is important to determine what the industry needs to prioritise when developing sustainability".

The report suggested that, in some instances, "protection of the environment should be priority number one and not subordinated to economic profitability". It also stressed that the "polluter pays" principle, which dictates that whoever is responsible for an industrial accident should pay the clean-up costs, should also be applied to environmental impact and carbon dioxide emissions from the mining industry and that no subsidies should be paid for consuming energy or disposing of waste.

Norway imposes strict environmental planning controls via recently implemented or updated laws, such as the Planning and Building Act 2008, which insists on environmental considerations being taken into account for any new building structure. Others, like the Nature Diversity Act 2009, aim to maintain natural habitats and require organisations to take all reasonable steps to avoid causing damage to them. 

A Minerals Act was introduced in 2009 to promote socially responsible use of mineral resources. It says the government’s Directorate of Mining is responsible for issuing exploration and extraction feasibility permits when a potential mineral zone is identified, prior to the commencement of any extraction operations. Licences are granted on the understanding that "operations on mineral deposits shall be carried out in accordance with good mining practice".

Yet even when companies comply with all the major legislation, there are still specific issues particular to individual mining developments which excite concern from environmentalists – a trend which is common across Scandinavia.

Finland

Mining companies in Finland, which borders Norway, are also facing mounting scrutiny from environmental groups. 

According to the Geological Survey of Finland (Geologian Tutkimuskeskus - GTK), the country is a global leader in the sustainable utilisation of mineral resources and the minerals sector is one of the key foundations of the Finnish national economy.

Finland’s National Mineral Strategy, released in 2010, states: "Finland should take a proactive role in implementing the principles of sustainable development throughout the extractive mineral sector, ensuring that mining and processing is compliant with established best practice guidelines."

It argues that the more natural resources that can be produced sustainably in Finland, the more experience the country will have of balancing its environmental priorities with those of its mining industry. 

Essentially, Finland’s government does not want to limit its mineral production or restrict the growth of its mining industry, but hopes instead to bracket as much of the sector as possible as being sustainable.

This supportive environment means that Finland consistently scores well in international surveys of the most attractive jurisdictions for mining companies to operate in.

Finland is already a significant producer of non-metallic minerals, being the leading talc producer in Europe and an important source of chromite, biotite, feldspar and mica.

It also has ambitions to become a lithium supplier. Finnish company Keliber Oy is on the verge of opening a new lithium carbonate production facility in Kaustinen, western Finland. An affiliate of Norway’s Nordic Mining, Keliber Oy plans to produce lithium from spodumene concentrate from the end of 2018 or early 2019, and will aim to sell its output into the lithium-ion battery market.

Opposition vs opportunity

Both Norway and Finland, along with the wider Scandinavian region, have a significant opportunity to increase their supply of minerals to Europe as new technologies such as electric vehicles, batteries, solar panels and wind turbines grow rapidly into major new industries in the continent.

But while many welcome the economic rewards of capitalising on these trends, few Scandinavians want to see their mining industries grow at the expense of their environments.

The answer appears to be careful planning, implementation and management of policies designed to manage the interests of different stakeholders, while also ensuring that development is rapid enough to help Scandinavia’s mineral industry to realise its potential.

Elsewhere in Scandinavia...

Sweden

Euromonitor recorded Sweden’s domestic material consumption of non-metallic minerals at 87.5bn tonnes last year, down 0.2% on 2015 levels.

Svenska Minerals AB is one of the sector’s leading companies, producing significant volumes of limestone and lime, along with dolomite, magnesium hydroxide, and magnesium oxide. The company also owns subsidiary Svenska Kyanite AB that produces kyanite at Halskoberg.

The country is also a significant exporter of feldspar.

Denmark

Low-lying Denmark has limited industrial mineral production, but does host deposits of chalk, clays (including bentonite), limestone and salt.

Euromonitor recorded Danish domestic material consumption of non-metallic minerals at 58.2bn tonnes in 2016, down 1.7% on the previous year’s figures.

In 2013, Denmark-based Damolin A/S was the world’s only commercial producer of mo-clay (or moler), which is a natural mixture of diatomite and smectite clay, used for, among other things, cat litter, filtration systems and insulation bricks. Its main facilities are on the Mors and Fur Islands, within the Limfjord in northern Jutland.

Meanwhile, Netherlands-based coatings giant AkzoNobel produces salt at Mariager, in Jutland. The USGS has described the salt produced as suitable for the electrolytic production of caustic lye, chlorine, and sodium chlorate. AkzoNobel was issued a new 30-year licence to extract salt from the site in 2013.