Minister Lintilä: New financing arrangement will secure ramp-up of Terrafame mine

Ministry of Economic Affairs and Employment 10.2.2017 13.36
Press release

In an announcement made on 10 February 2017, Terrafame Ltd reported that it had achieved a favourable solution in negotiations about external private financing. Agreement was reached between Terrafame Group Ltd, Terrafame Ltd, Trafigura Group and Galena Private Equity Resources Fund concerning financing arrangements totalling EUR 250 million and commercial cooperation.

Sampo plc will act as a co-investor in the arrangements. Through Terrafame Group Ltd, the state will remain the majority shareholder in the company, with a holding of about 85 per cent.

“I’m satisfied with the financing arrangements achieved. This is something we have long sought and so we welcome it wholeheartedly. Terrafame is now well placed to engage in mining operations in an environmentally responsible and economically successful manner,” says Minister of Economic Affairs Mika Lintilä.

“It looks like the objectives set by the state owner in regard to environmental safety and private financing, and also the need to secure sustainable and productive operation of the mine, are about to be met,” notes Minister Lintilä.

“The amount of state financing for the mine has been substantial, and with the external financing the mine will now be in a stronger position to operate effectively. The consistent aim of the state owner has been that a private financing arrangement be found for completing the ramp-up of production at the Sotkamo mine operated by Terrafame Ltd, and that the mine’s operation can then continue on an economically sustainable basis in the long run,” explains Minister Lintilä.

“It is our view that after this Terrafame will no longer need additional state financing. The financing arrangements achieved will strengthen the national economy and the regional economy in Kainuu, as well as employment in the Kainuu region, and will boost Finnish exports. At the same time, this will secure the retention and development of mining expertise in Finland.

Inquiries:
Hannu Väänänen, Special Adviser to the Minister of Economic Affairs, tel. +358 50 410 4909
Mika Niemelä, Director of Finance, Ministry of Economic Affairs and Employment, tel. +358 29 506 2135