Report proposes changes to the current reservation mechanism for mineral exploration to reduce uncertainty
Mining sector operators consider the current mechanism appropriate. However, according to the Report on the functioning of the reservation mechanism under the Mining Act, published by the Ministry of Economic Affairs and Employment on 14 June 2021, the mechanism creates uncertainty for landowners and local businesses.
Under the current claim system, a party who finds a deposit of valuable minerals has the right to apply for permission to exploit the deposit. A key objective of the system is to promote the position of those who find valuable minerals regardless of the ownership rights of the area, and to create incentives for mineral exploration and mining operations. A reservation notification grants its holder priority in applying for other permits under the Mining Act for the area specified in the notification.
According to the report, the reservation mechanism cannot be entirely abolished without establishing an alternative process for ensuring that the central regulatory objectives of the reservation mechanism have been fulfilled.
The landowners of reserved areas and their related businesses and other stakeholders said that the current reservation mechanism created uncertainty, even though a reservation is not a permit to start surveys in the area. This uncertainty was highlighted if the operations of a business were incompatible with the possible future mine and its operation.
The large area granted for reservations in particular was seen as a problem. As a possible alternative, the report proposed the introduction of an additional fee on top of the decision fee, the amount of which would depend on the surface area of the reservation. This would incentivise the parties making reservations to consider the required scope of the reservation areas and restrict their size themselves. Another option was to restrict the reservation of certain areas.
In relation to the social impact of reservations, information on a submitted reservation notification could be released before the mining authority issued its decision instead of after the decision issued, which is the case now. Providing information on a submitted reservation notification early could improve the access to information of the local residents and stakeholders, and it would promote the social acceptability of reservation notifications.
The report was prepared by the law firm Hannes Snellman for the Ministry of Economic Affairs and Employment. The report will be published in English at a later date. The Ministry of Economic Affairs and Employment is responsible for preparing the draft amendments to the Mining Act.
Riikka Aaltonen, Chief Mine Inspector, Ministry of Economic Affairs and Employment, +358 29 506 4216, [email protected]
Eeva-Maija Puheloinen, Chief Specialist, Ministry of Economic Affairs and Employment, tel. +358 29 504 7084, [email protected]