Mining policy in Finland is space-blind, requiring better integration with regional characteristics and local development strategies. The European Union (EU) has a strategic priority to improve the future reliability of supply for raw materials. As one of the richest countries in mineral deposits in Europe, Finland can play an instrumental role in the raw materials agenda of the EU. The country stands out because of its attractive regulatory environment and mining production. Subnational governments are key to attaining the national mineral strategy and sustainable development of the mining sector, given their capacity to strengthen the social licence to operate (SLO), land use governance and the development of local value chains, among other factors.
Outokumpu, a small rural municipality in North Karelia, was the key mining area in Finland for most of the 20th century. Located in North Karelia, the Finnish easternmost region (3% of the national population), the municipality has since the 1980s experienced a long-term transition associated with the closure of a major copper mine. The transition from mining to a manufacturing-based economy has been a positive experience, leading to an economy based on subcontracting and exports of metal technologies and mining services.
Outokumpu currently has a number of competitive advantages to become an important player in the mining value chain in Finland and the EU. They include: i) a strategic location within the local labour market (LLM) of Joensuu (the largest LLM in North Karelia); ii) a relatively high share of manufacturing activities (33% of municipal jobs) with outstanding know-how on mining; and iii) an enabling socio-political environment for mining activities. The existing mining knowledge has scope to transition into services around mining activities – including a heritage centre and mining education – which makes the mining sector a potential source of income for the municipality and the region.
Nevertheless, the municipality needs to overcome various bottlenecks to mobilise its assets and attain sustainable growth in the long term. They include: i) a declining and ageing population (an elderly dependency ratio 19 percentage points higher than the country average), which translates into a shrinking labour force; coupled with ii) mismatches in the labour market (brain drain). There is also: iii) a low share of high-skilled workforce (28%, 7.9 percentage points lower than the LLM); and iv) a declining rate of entrepreneurship with stagnation in the establishment of new enterprises.
Greater co-ordination among levels of governments and stakeholders will be instrumental to make the municipality a key player in the development of the Finnish mining sector. There is a lack of clarity in the role of the mining sector within the regional economy and the marketing strategies to promote the mining potential. Furthermore, the regional mining strategy does not fully acknowledge the local mining clusters. Thus, the region needs a cohesive long-term vision for regional development that translates into a portfolio of projects. Furthermore, Outokumpu Municipality requires better co-ordination with the priorities of the region and neighbouring municipalities.