Mining in Sweden

Mining industry

What is the nature and importance of the mining industry in your country?

Mining has been of great importance in Sweden throughout modern history, and ore production has been rising significantly in recent years. There are currently about 100 companies with exploration permits active in the search for minerals, and the mining sector in Sweden employs approximately 6,000 people (indirect jobs not included).

Sweden is one of the European Union’s leading producers of ores and metals. The mining industry is crucial to employment in some areas of Sweden and serves as an important basis for exports.

Mines currently in operation produce iron ore, sulphide ore and gold, but other minerals can also be found in sufficiently large quantities for profitable mining. There is an ongoing permit process for an open-cast mine for rare earth minerals (the deposit is considered to be the fourth largest in the world).

In 2011, a proposal for a national strategy for mineral exploitation was put forward by the Geological Survey of Sweden (SGU) to the Swedish government, and a national strategy was published by the government in 2013. This resulted in additional funding for mapping and mineral information as well as the formation of a new group within the SGU with the sole task of assisting the mining industry.

Political stability, good infrastructure throughout the whole country, a solid legal system, widespread expertise among the workforce and a well-developed mining equipment industry mean that Sweden offers favourable conditions for mining operations.

Parties interested in starting mining operations in Sweden can visit the SGU’s website and through different databases on the site obtain basic information for the initial evaluation of suitable areas for exploration (see question 9).

What are the target minerals?

Sweden is by far the biggest producer of iron ore in the European Union and is also among the leading producers of copper, zinc, lead, gold and silver. In 2013, approximately 75 per cent of prospecting expenses spent in Sweden concerned prospecting for gold, copper, zinc, lead and nickel, while 20 per cent of the expenses concerned iron ore. Exploration for other minerals such as molybdenum, wolfram, vanadium, tellurium and lithium were of interest to some foreign prospectors. A comprehensive map of ore and mineral locations can be found online through the Mineral Resources Information Office (MINKO) (apps.sgu.se/kartvisare/kartvisare-index-en.html).

In 2016, the SGU, the expert agency charged with bedrock, soil and groundwater in Sweden, was commissioned by the Swedish government to provide an analysis regarding the available resources of innovation-critical raw materials in Sweden. Owing to innovation-critical raw materials being used in the production of batteries in, for example, mobile phones and electric cars, the demand for these raw materials has increased substantially in Sweden and across the European Union during the past few years. After the SGU presented its results, the Swedish government declared that Bergslagen in Sweden is one of the most interesting areas in the world regarding access to this type of material. Moreover, the SGU has been asked to further evaluate the possibilities of extracting innovation-critical raw materials in Sweden.

In June 2016, five of the eight political parties in the Swedish Parliament reached a framework agreement for Sweden’s long-term energy policy, the Energy Agreement. The Agreement includes, for example, the target of reaching 100 per cent renewable electricity generation by the year 2040. As a part of fulfilling this goal, wind power is being expanded at a relatively fast pace. In the energy agreement the parties also agreed that fees for connecting offshore wind power to the Swedish national grid should be abolished. The reason for the abolition is in part to make Swedish waters a more attractive location for potential wind parks and in part in order to create more equal conditions in relation to the corresponding facilities, both on land and in the sea, in other countries around the Baltic Sea - the site of Sweden’s windfarms. The Swedish Energy Agency has presented the results of its investigation into the potential conditions for, and formulation of, the abolition of the connection fee to the Swedish government.

The Swedish government set up an investigation concerning the environmental permit application system for environmentally hazardous activities according to the Environmental Code. This encompassed a large number of industries including the mining industry. The focus of the investigation was to ensure that the permit process promotes investment that drives techniques and practices towards a decrease in environmental impact. The aim was to increase investment in innovative, sustainable industrial production, in what the Swedish government calls the ‘smart industry’ sector. However, the investigation led to no significant changes in the law.

Which regions are most active?

The mining industry is active in most parts of Sweden apart from the southernmost regions and the islands of Öland and Gotland, where the prospect of finding valuable mineral deposits is more limited. In those regions, industrial mineral and construction material extraction is more common instead. Northern Sweden is generally rich in minerals and has the highest concentration of mining operations in the country. Specific areas of interest are the Skellefteå field in the county of Västerbotten, an area of significant mineral density, and the county of Norrbotten, where most iron ore production is located.

While the traditional mining areas in Sweden are in the north, there has been renewed interest in potential mining opportunities to be found in Skåne, in the country’s south. The interest in exploration in the area is primarily focussed on vanadium extraction, the metal being chiefly used in battery production. However, copper, zinc, gold and silver have also been named as potential mineral finds in the same area.

Legal and regulatory structure

Is the legal system civil or common law-based?

Sweden’s legal system is civil law-based.

How is the mining industry regulated?

All acts governing the mining industry are national, but decisions under these acts are taken by administrative bodies at both regional and national level. See question 6. Sweden is a member of the EU; consequently, any EU legislation concerning the mining industry is applicable as well.

What are the principal laws that regulate the mining industry? What are the principal regulatory bodies that administer those laws? Were there any major amendments in the past year?

The Swedish Minerals Act (No. 45 of 1991) is the principal law regulating the mining industry and it governs the procedure for acquiring exploration permits and exploitation commissions on land, irrespective of who owns the land to be explored or exploited. Detailed provisions of the application process and fees can be found in the Minerals Ordinance (No. 285 of 1992).

The Swedish Environmental Code (No. 808 of 1998) is relevant in many aspects. The Environmental Code is applicable in matters concerning the granting of a concession, which means that an environmental impact assessment (EIA) must be appended to an application for a concession. A permit for exploitation must always be granted under both the Minerals Act and the Environmental Code. For more information about EIAs, see question 36.

During 2018, changes were made to the Environmental Code in order to implement an EU directive establishing a framework for community action in the field of water policy. These changes have resulted in regulations regarding the emission of water and waste water from both mining operations and industries and stricter environmental quality norms for water. The new regulations gained legal force and came into effect on 1 January 2019.

The Planning and Building Act (No. 900 of 2010) contains provisions that regulate building and construction.

Exploration work can be affected by the Off-road Driving Act (No. 1,313 of 1975) and the Heritage Conservation Act (No. 950 of 1988).

Applications for exploration permits and exploitation concessions under the Minerals Act are administered by the Mineral Inspectorate. The County Administrative Board takes part in the environmental evaluation of applications for exploration permits and exploitation concessions. The Swedish government makes decisions in matters of particular public interest. The local municipality is responsible for permissions in accordance with the Planning and Building Act. Permissions required by the Environmental Code are handled by the Land and Environmental Court. Supervision of compliance with the environmental conditions is usually carried out by the County Administrative Board and by the municipality’s Environment and Health Board.

What classification system does the mining industry use for reporting mineral resources and mineral reserves?

A stand-alone framework called the Fennoscandian Review Board Standard (FRB standard) is recommended for use by the Swedish Miners Association and has also been adopted by the corresponding organisations in Norway and Finland. The classification system is based on the international template for the public reporting of exploration results, mineral resources and mineral reserves that is created by the Committee for Mineral Reserves International Reporting Standards with the purpose of creating mutual international standards. The FRB standard is subsidiary to national legislation. The FRB standard is similar to the Canadian Institute of Mining Standards, Australia’s Joint Ore Reserves Committee Code and the South African Code for Reporting of Mineral Resources and Mineral Reserves since all the standards are based on the international template for the public reporting of exploration results, mineral resources and mineral reserves.

Mining rights and title

To what extent does the state control mining rights in your jurisdiction? Can those rights be granted to private parties and to what extent will they have title to minerals in the ground? Are there large areas where the mining rights are held privately or which belong to the owner of the surface rights? Is there a separate legal regime or process for third parties to obtain mining rights in those areas?

All minerals that are covered by the Minerals Act are listed in this act and those not listed belong to the landowner. Minerals of interest for mining are among those listed. The reason for this policy is that landowners in general are considered not to have the required capacity for exploiting mineral resources on their land. The same rules apply to all types of landowners, whether it is the state, private entities or individuals. Exploration permits can be granted for exploration on land (real property) belonging to any type of landowner, both private and public.

What information and data are publicly available to private parties that wish to engage in exploration and other mining activities? Is there an agency which collects mineral assessment reports from private parties? Must private parties file mineral assessment reports? Does the agency or the government conduct geoscience surveys, which become part of the database? Is the database available online?

The SGU collects basic geological data concerning Sweden’s bedrock geology and properties of rock. Information related to prospecting obtained through government surveys and private exploration, is accessible through MINKO. Most information is accessible online where maps can be produced on request for specific purposes and received in digital form or as hard copies. The National Drill Core Archive is located at MINKO and contains over 4,000km of drill cores that can be used for analysis. The results from such analysis have to be submitted to MINKO and will be made public after a period of time.

When an exploration permit is terminated without the granting of an exploitation concession within the exploration area, the permit holder (if they are carrying on exploration work professionally) must submit a summary report within three months.

What mining rights may private parties acquire? How are these acquired? What obligations does the rights holder have? If exploration or reconnaissance licences are granted, does such tenure give the holder an automatic or preferential right to acquire a mining licence? What are the requirements to convert to a mining licence?

Both exploration and exploitation permits are granted under the Minerals Act to qualified applicants entirely irrespective of who owns the land to be explored or exploited.

An exploration permit is granted for a specific area of land where there is some likelihood of a successful discovery being made. The area covered by the permit must be of a suitable shape and size and no larger than can be explored by the permit holder in an appropriate manner. An exploration permit gives access to land for exploration work that does not harm the environment or prejudice the use of the land and entails a preferential right to an exploitation concession. The rule is such that the party that applies first is given priority and therefore it is required that the first application is complete and will not need to be supplemented at a later time, because this can result in complications for the assessment of which party applied first.

If there is a possibility of the exploration work having a significant impact on the environment, a notice of consultation in accordance with the Environmental Code must be sent to the supervisory authority (the County Administrative Board). Before exploration work begins, the permit holder must prepare a work plan. The plan must contain a description of the work planned, a timetable and an assessment of any impact on private rights and public interests. The plan must be communicated with all landowners and any other affected parties. A work plan enters into force if there are no objections. It will also enter into force if the applicant and the objecting party agree to the contents of a revised plan. If they cannot agree, the matter may be adjudicated by the Mining Inspectorate, who in some cases can also establish conditions for the exploration work.

Before any work may be commenced, the exploring party is obliged to provide security for the compensation of any damage and encroachment of rights that the exploration work might inflict. An applicant for an exploration permit is required to pay an application fee as well as an exploration fee. The amount is decided according to the extent of the area subjected to exploration.

To commence mining activities, an exploitation concession has to be acquired. As a cardinal rule, concessions are valid for 25 years, but can be extended. Further, a concession is valid for a specific area, which is determined on the basis of the shape and extent of the deposit, the purpose of the concession and other circumstances. Concession is granted if the discovered mineral deposit shows a probability of profitable exploitation and if the location and nature of the deposit does not render it inappropriate to grant the requested concession. The Environmental Code is applicable in matters concerning the granting of a concession. The holder of an exploration permit is not entitled to an automatic but rather a preferential right to acquire an exploitation concession.

In order for the holder of an exploration permit to acquire an environmental permit the operation must be subject to a trial in the Land and Environmental Court. This is a process that is separate from the previously explained procedure concerning exploration permit and exploitation concession. The process to acquire an environmental permit is governed by the Environmental Code. The environmental impact of the operation is thereby tried by the court. The court also sets the conditions for the operation in its decision.

What is the regime for the renewal and transfer of mineral licences?

A transfer of an exploration right or a concession can be permitted under the Minerals Act after an application to the permitting authority (the Mining Inspectorate). The permission can be granted if the future licence holder meets the conditions set forth in the Minerals Act.

Transfer of an environmental permit is possible, provided that the new holder is taking over the permitted operation. According to the Ordinance of Environmentally Harmful Operations and Protection of Health (No. 899 of 1998), the new holder must notify the supervisory authority (the County Administrative Board) about the transfer.

Conditions regarding the renewal of mineral licences are described in question 12.

What is the typical duration of mining rights?

An exploration right is valid for a period of three years, and can be prolonged for a maximum of 15 years under special conditions. The conditions for extension gradually become more severe. The conditions for extension concern the likelihood of finding minable minerals and the amount of exploration already conducted. When an exploration permit expires, a new application can be filed for the same exploration area. The new application can be filed no earlier than a year after the previous exploration right has expired, but exceptions can be made from the one-year rule if special conditions apply.

Once a concession is granted it is valid for 25 years. It can be prolonged for 10 years at a time if work is performed on a regular basis in the said area. If work is not performed on a regular basis in the said area, the concession can still be prolonged for an additional period of 10 years if mining is still ongoing, the work performed meets specific criteria set up under the Minerals Act or if it is otherwise motivated by the common interest that the mineral findings should be exploited in an effective manner. The application to prolong a concession should be filed no later than six months before the valid concession expires.

Environmental permits may be time limited or valid for an unlimited time. As the Minerals Act runs in parallel to the Environmental Code, the environmental permit is linked to the restrictions of the exploitation concession even though the environmental permit itself is not explicitly time limited. In practice the permit may be time limited as the operator normally needs to apply for a new environmental permit after a certain time frame has passed in order to meet the requirements of Chapter 2 of the Environmental Code (eg, meeting the standards of using the best available technology). A renewal of the environmental permit in this sense is treated as a new application.

The Minerals Act states that an exploration permit or an exploitation concession can be revoked if the holder does not fulfil their obligations in accordance with the provisions of the Minerals Act, the terms laid out in the exploration permit or exploitation concession or if there are other specific reasons. The revocation of an exploration permit or an exploitation concession can only occur if considerable public interests are at stake. Revocation may also proceed owing to foreign and defence policy if it is necessary to secure Swedish influence over a deposit. An exploration permit may also be revoked if the holder is in breach of any term regarding consent to exploration work.

The terms of an exploitation concession can be changed if an operation according to the concession gives rise to inconveniences of considerable size that were not anticipated when the concession was granted. Under other circumstances, the terms laid out in exploration permits or exploitation concessions may be changed only in accordance with the holder’s request or consent.

The Environmental Code also provides the possibility to change the conditions and terms of an environmental permit or to revoke the environmental permits, in whole or in part. A revocation or change of conditions and terms may only be made owing to specific circumstances such as the operations giving rise to inconveniences of considerable size that were not anticipated when the environmental permit was granted or a considerable breach of the environmental permit terms and conditions. Several governmental authorities have the possibility to initiate the processes described above.

Is there any distinction in law or practice between the mining rights that may be acquired by domestic parties and those that may be acquired by foreign parties?

There are no restrictions on foreign nationals obtaining exploration permits and exploitation concessions.

An exploration permit or exploitation concession may be transferred after consent by the issuing authority.

How are mining rights protected? Are foreign arbitration awards in respect of domestic mining disputes freely enforceable in your jurisdiction?

The Mining Inspectorate handles any disputes between the permit or concession holder and the landowner concerning rights and obligations connected to exploration or exploitation. Disputes regarding compensation to the landowner are handled by the Mining Inspectorate or the Land and Environmental Court.

Decisions made under the Minerals Act can be appealed, but the proper second instance depends on the type of decision being appealed.

The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958, has been ratified by Sweden.

What types of surface rights may mining rights holders request and acquire? How are these rights acquired? Can surface rights holders oppose these requests?

A legal proceeding for the designation of land is held at the request and expense of the concession holder. This procedure establishes the concession area, which is the area the concession holder may use for exploitation of the mineral deposits. In addition, any land within or outside the concession area, which the concession holder plans to use for activities related to the exploitation, may be covered by the decision. When an exploitation concession is terminated, the concession holder forfeits any rights to the land assigned to him or her at that time.

Prior to the designation of land, the holder of the mining rights may enter into agreements with surface rights holders to acquire land rights. If all parties are in agreement, land will be designated according to what has been agreed. Where no agreements have been reached, the acquisition of land rights is handled in the land designation process. A surface rights holder may oppose the request by the mining rights holder to acquire land rights. If so, the conflicting interest is tried according to provisions in the Minerals Act, and land is designated according to what is required for the mining operations and connected activities. Land designations can be appealed to the Land and Environmental court and subsequently to the Land and Environmental Court of Appeal.

Does the government or do state agencies have the right to participate in mining projects? Is there a local listing requirement for the project company?

Neither the government nor state agencies have a right to participate in mining projects. The project company is not required to be listed locally at any stage of the permit and concession processes.

Are there provisions in law dealing with government expropriation of licences? What are the compensation provisions?

It is not possible to expropriate permits or concessions related to mining, hence there are no compensation provisions regarding expropriation. On the other hand, the state is able to expropriate land and other areas under certain premises stated in the Expropriation Act (No. 719 of 1972). Reasons for expropriation are specified in this Act. The decision to expropriate land is made by the government as a main rule, but the power of authority can be transferred to the County Administrative Board under certain circumstances. The compensation provisions for expropriated land are also stated in the Expropriation Act.

Are any areas designated as protected areas within your jurisdiction and which are off-limits or specially regulated?

No exploration or exploitation is allowed in national parks and there are several other areas or proximity limitations that might affect the outlook of conducting mining operations. Mining operations are rarely permitted:

• in areas included in local plans or regional provisions under the Planning and Building Act;
• closer than 30 metres to publicly owned transport infrastructure;
• within 200 metres of inhabited buildings;
• in areas of military interest;
• in areas with electric power stations and industrial plants;
• within 200 metres of public buildings, hotels, churches and comparable establishments;
• in churchyards and burial grounds; and
• in certain specified undisturbed areas of the Swedish mountains.

According to the Environmental Code, if an activity is located near or within a Natura 2000 area, the operator must demonstrate that the activity will not affect the environment in a significant way (Natura 2000 is an ecological network of protected areas across the European Union). The Environmental Court tends to adjudicate matters affecting Natura 2000 areas quite strictly.

Exploration work that can have significant impact on the natural environment requires that a notice of consultation is sent to the County Administrative Board. If exploration work can damage land use where it is being carried out, security for compensation has to be given if the landowner has not given their consent.

Duties, royalties and taxes

What duties, royalties and taxes are payable by private parties carrying on mining activities? Are these revenue-based or profit-based?

Private parties conducting mining activities are required to pay an annual fee of 2 per mille of the average value of the minerals mined. The revenue is split between the landowners and the state, with landowners receiving 1.5 per mille and the state 0.5 per mille.

Normal corporate income tax, currently set at 22 per cent, applies to mining companies but there are no additional taxes for mining in particular.

For an exploration permit, certain fees have to be paid to the Mining Inspectorate by the applicant. An application fee of 500 kronor shall be paid to the Mining Inspectorate when handing in the application for every new area consisting of 2,000 hectares. If permission is granted, another 20 kronor for each hectare has to be paid for the first three-year period of the permit. If an extension of the exploration permit is permitted, an additional fee of 21 kronor per hectare per year is required. Further extension of the permit is possible, but will result in even higher annual fees. All fees are required to be paid in advance for each period of time.

When applying for an exploitation concession, a fee of 80,000 kronor must be paid for each area the application concerns. There is also a fee for the designation of land proceedings.

What tax advantages and incentives are available to private parties carrying on mining activities?

The tax advantages and incentives for private parties engaged in mining activities are regulated by the Energy Tax Act (No. 1,776 of 1994). For example, tax relief can be obtained regarding carbon dioxide tax and energy tax for certain vehicles used in the mining activity process.

Does any legislation provide for tax stabilisation or are there tax stabilisation agreements in force?

There is no legislation in force regarding tax stabilisation and there are no tax stabilisation agreements. There are special rules regarding the state-owned company LKAB. These rules apply to, for instance, customs regulations.

Is the government entitled to a carried interest, or a free carried interest in mining projects?

During the course of the exploitation, the holder of the concession must pay an annual mineral reimbursement according to the Minerals Act (see question 19). The holder of the concession is obliged to provide the information necessary to determine the scope of the reimbursement.

Apart from this mineral reimbursement, the government is not entitled to any type of carried interest in mining projects.

Are there any transfer taxes or capital gains imposed regarding the transfer of licences?

There are no special tax regulations for mining. General corporate tax law applies.

Is there any distinction between the duties, royalties and taxes payable by domestic parties and those payable by foreign parties?

Foreign parties pay the same duties and royalties as domestic parties. As a main rule, they also pay the same taxes.

Business structures

What are the principal business structures used by private parties carrying on mining activities?

The principal business vehicle used is the limited liability company. Joint venture agreements are common but a joint venture is not a legal person and so the actual vehicle used to operate the joint venture is still the limited liability company. Partnerships are rarely used in any larger scale or capital-intensive business since they do not provide the same structure and ease in transferring shares in the case of options and earn-in clauses. In addition, the minimum capital requirement for limited liability companies was recently lowered to 50,000 kronor, making this form of company even more accessible to both Swedish and international investors. It is also possible to open a local branch that is registered in Sweden and that is not a legal person in its own right but considered part of a foreign legal entity. Trusts, however, are not recognised in the Swedish legal system.

Is there a requirement that a local entity be a party to the transaction?

There is no such requirement.

Are there jurisdictions with favourable bilateral investment treaties or tax treaties with your jurisdiction through which foreign entities will commonly structure their operations in your jurisdiction?

Sweden is party to a number of international tax treaties, which may have an effect on the way foreign entities choose to operate but, in general, such treaties are neutral in character and do not single out particular jurisdictions for favourable treatment.

Financing

What are the principal sources of financing available to private parties carrying on mining activities? What role does the domestic public securities market play in financing the mining industry?

The largest Swedish mining operators are listed on the Stockholm Stock Exchange, now named Nasdaq OMX Nordic Stockholm. Others are financed by private equity firms or banks or both. In general, all means of financing open to any industrial business are also open to the mining industry.

Does the government, its agencies or major pension funds provide direct financing to mining projects?

There is no direct financing provided by the government, its agencies or pension funds. However, the government owns 100 per cent of the shares in major mining operator LKAB and pension funds may from time to time own shares in listed mining companies.

Please describe the regime for taking security over mining interests.

It is not possible to take out a mortgage or to pledge a mining permit or concession. It is, however, possible in respect of the real estate that the licence concerns.

Restrictions

What restrictions are imposed on the importation of machinery and equipment or services required in connection with exploration and extraction?

There are no specific restrictions concerning the importation of machinery and equipment for the mining industry. All services that are operated in Sweden, including mining, must be performed according to the law and provisions on health and safety (see questions 39 and 40).

Which standard conditions and agreements covering equipment supplies are used in your jurisdiction?

The most commonly used standard terms used for equipment supplies are NL09, General Conditions for the Supply of Machinery and other Mechanical, Electrical and Electronic Equipment in Denmark, Finland, Norway and Sweden. NL09 is issued by the engineering industries organisations in the Nordic countries and is widely recognised. For construction of buildings, roads or other structures, parties will use either AB04, General Conditions of Contract for Building and Civil Engineering Works and Building Services, or ABT06, General Conditions of Contract for Design and Construct Contracts for Building, Civil Engineering and Installation works. These standard form agreements are issued by the Swedish Construction Contracts Committee (BKK), a body formed by the main private employers’ associations and contractor’s associations as well as state infrastructure agencies such as the Swedish Transport Administration. They provide a tried and tested structure, and they can be combined with add-on standard terms from BKK (eg, subcontractor terms and conditions or index provisions). For erection of plants, Orgalime’s general conditions are sometimes used, for example, in the Turnkey Contract of 2003.

What restrictions are imposed on the processing, export or sale of minerals? Are there any export quotas, licensing or other mechanisms that prevent producers from freely exporting their production?

There are no restrictions on the processing, export or sale of minerals.

What restrictions are imposed on the import of funds for exploration and extraction or the use of the proceeds from the export or sale of minerals?

There are no foreign exchange controls or other restrictions on the import of funds for exploration and extraction or the use of the proceeds from the business.

Environment

What are the principal environmental laws applicable to the mining industry? What are the principal regulatory bodies that administer those laws?

The Environmental Code is the principal environmental law in Sweden. The Environmental Code is closely tied to the Minerals Act, which, with few exceptions, is applicable to all exploration and exploitation on land. Two types of rights are granted under the Minerals Act - exploration permits and exploitation concessions. The Mining Inspectorate grants these rights. In order to conduct mining operations both an exploitation concession and a permit under the Environmental Code must be acquired. With respect to mining operations, permits under the Environmental Code are granted by the Land and Environmental Court.

If exploration work could have significant impact on the environment, it entails certain investigations of the environmental aspects according to the Environmental Code. The Mining Inspectorate also hears applications for exploration permits and exploitation concessions, in consultation with the County Administrative Board, which examines whether the site is acceptable from an environmental point of view. The Environmental Code is also applicable in matters concerning the granting of an exploitation concession, which means that an EIA must be appended to an application for a concession.

Supervision of compliance with the environmental conditions is usually carried out by the County Administrative Board and by the municipality’s Environment Health Board.

What is the environmental review and permitting process for a mining project? How long does it normally take to obtain the necessary permits?

The granting of a permit for mining operations under the Environmental Code is governed by the same rules as other business operations with an environmental impact. The details for the permit under the Environmental Code, such as noise levels, storage sites and damming up water deposits, are decided during the permit process carried out by the Land and Environmental Court. Supervision of compliance with the environmental conditions imposed is usually carried out by the County Administrative Board and by the municipality’s Environment Health Board.

The first step to acquiring a permit is the consultation process. This takes place between the company wishing to engage in activities with an environmental impact and parties environmentally affected by the operations, as well as agencies and organisations concerned with environmental issues. The purpose is to hear from all concerned parties so that their interests can be considered when preparing the EIA.

After the consultation, the EIA has to be finalised. The purpose of the EIA is to describe the environmental impact that the proposed mining project will have. The description is made so that the reviewing bodies (the County Administrative Board or the Environmental Court) can assess whether the project should be allowed from an environmental point of view or not. The applicant must provide information in the EIA regarding any alternative sites for the proposed operation, together with a justification of why the proposed site was selected. The applicant must also provide a description of a zero option, which details the consequences of not starting the proposed operations.

After the hearing and EIA have been carried out, the application for a permit under the Environmental Code can be submitted to the Land and Environmental Court. The Land and Environmental Court determines whether the information gathered and presented in the consultation and environmental assessment phases is detailed enough to proceed with a ruling. During the initial phase of the proceedings, any affected parties may submit supplements to the application. The complete information will then be sent for review and comments to any affected party. Before the main hearing begins, the applicant will have the opportunity to address any comments made during the consultation process.

The complete process for obtaining a permit under the Environmental Code takes approximately three to five years depending on the size of the operation and where it is to be carried out.

What is the closure and remediation process for a mining project? What performance bonds, guarantees and other financial assurances are required?

The closure and remediation process is handled in the Environmental Code permit process through the details for the permit. If deemed necessary, a security will have to be provided to cover for potential damages to the environment and closure of the mining operations. All types of security are approved as long as they are satisfactory for their purpose. The applying party must show that the suggested security is satisfactory and if a security cannot be provided a permit will not be granted.

What are the restrictions for building tailings or waste dams?

Certain requirements for the operator in charge of dam maintenance are listed in the Ordinance on Dam Safety (No. 214 of 2014). A tailings or waste dam typically needs a water operation permit according to the Environmental Code and the main principle being that the owner of the tailings or waste dam is responsible for its maintenance. The Ordinance on Dam Safety requires the operator in charge of maintenance to produce an impact assessment and propose a classification based on the impact that may potentially be caused by a dam failure. Furthermore, the operator in charge of maintenance must have a safety management system concerning the methods, routines and instructions needed for:

• organisation, areas of responsibility and qualifications for personnel working with dam safety;
• identification and assessment of risks for major accidents;
• operations, permit supervision and maintenance;
• routines for changes in the operations;
• planning for emergency situations; and
• audits and reviews.

High-risk installations are subject to provisions with more severe requirements in the Ordinance on Mining Waste (No. 319 of 2013). High-risk installations are defined as installations wherein a deficiency or mistake in the installation or operational organisation may cause a major accident or an installation that has a certain amount of dangerous substances or chemicals. The Ordinance on Mining Waste also includes provisions on localisation and general design of tailings and waste dams.

The operator in charge of maintenance must make a complete assessment of the dam’s safety and the operational organisation every 10 years. The operator is also obligated to produce yearly safety reports to the supervising authority.

More specific requirements than those listed above may be prescribed in the water operations permit needed for the tailings or waste dam.

Health & safety, and labour issues

What are the principal health and safety, and labour laws applicable to the mining industry? What are the principal regulatory bodies that administer those laws?

The principal health and safety law is the Work Environment Act (No. 1,160 of 1977), which is applicable in all situations where an employee performs work for an employer. The Work Environment Act is a framework act and detailed regulations are found in the provisions issued by the Swedish Work Environment Authority, which is the principal regulatory body concerning health and safety in the workplace in Sweden. The Work Environment Act states the obligations of the employer: prevention of ill health and accidents, for example. The provisions of the Swedish Work Environment Authority on rock and mining work and general recommendations on implementation of the provisions (AFS 2010:1) are the main provisions concerning mining. They regulate, among other things, the kind of investigation and risk assessments that need to be done before the work in the mine can begin, the kind of working methods and equipment should be chosen, the kind of knowledge the workers in the mine need to possess, the personal protective equipment the workers shall use and required inspections.

Other provisions that may be applicable to mining are:

• the Swedish Work Environment Authority’s provisions on chemical hazards in the working environment, together with general recommendations on the implementation of the provision (AFS 2014:43), which regulate the employer’s obligations concerning hazardous chemical substances;
• the Swedish Work Environment Authority’s provisions and general recommendations on occupational exposure limit values (AFS 2011:18), which regulate the assessment and measurement of air contaminants and the employer’s obligation to take action to lower exposure and reduce risk;
• the Swedish Work Environment Authority’s regulations governing blasting work and general advice on the application of the regulations (AFS 2007:1), which regulate how blasting work should be planned and executed;
• provisions issued by the Swedish Work Environment Authority concerning the use of work equipment (AFS 2006:4), which regulate what kind of work equipment the employer shall provide to employees;
• provisions issued by the Swedish Work Environment Authority concerning noise together with general recommendations on the implementation of the provisions (AFS 2005:16), which regulate the permitted level of noise in a workplace and how noise shall be prevented, etc;
• provisions issued by the Swedish Work Environment Authority concerning vibrations (AFS 2005:15), which regulate the employer’s obligation to perform risk assessments and investigations regarding vibrations and the employer’s responsibility to educate and inform their employees about vibrations;
• the Swedish Work Environment Authority’s provisions on occupational medical supervision and general recommendations for applying the provisions (AFS 2005:6), which regulate when medical examinations need to be carried out with employees that are or will be exposed to, for instance, quartz and vibrations;
• provisions of the Swedish Work Environment Authority on the use of personal protective equipment, together with general recommendations on the implementation of the provisions (AFS 2001:3), which mainly regulate the employer’s obligation to provide sufficient personal protective equipment to the employee; and
• provisions issued by the Swedish Work Environment Authority concerning quartz (AFS 2015:2), which regulate the measurement and cleaning of quartz.

If the different sections in the provisions are in conflict with each other, the rules in the provisions of the Swedish Work Environment Authority on rock and mining work and general recommendations on implementation of the provisions (AFS 2010:1) will prevail. Note that only the most common provisions that can be applicable to mining are mentioned. There are additional provisions that regulate all work environments.

The general labour laws in Sweden are applicable to the mining industry such as the Working Hours Act (No. 673 of 1982), the Co-determination Act (No. 580 of 1976), the Discrimination Act (No. 567 of 2008), the Parental Leave Act (No. 584 of 1995) and the Annual Leave Act (No. 480 of 1977). However, labour provisions in Sweden also exist in collective agreements and private employment agreements.

The Swedish Work Environment Authority is responsible for the supervision of the Working Hours Act. Non-compliance of the Discrimination Act is handled by the Equality Ombudsman. Violations against the remaining laws are settled through negotiations or in court.

What are the rules related to management and recycling of mining waste products? Who has title and the right to explore and exploit mining waste products in tailings ponds and waste piles?

Management and recycling of mining waste products is regulated by the Environmental Code, the Regulation on Waste from Extractive Industries (No. 319 of 2013) and to a lesser extent the Waste Regulation (No. 927 of 2011). The relevant rules are based on the EU Mining Waste Directive (2006/21/EC). For ongoing mining operations, the mining operators are responsible for mining waste and the possibility of extracting minerals from this. The normal approach is to handle extraction of minerals from waste as part of the environmental permit, which may require an amended permit if the extraction from waste is not included in the original permit.

Although there are no specific regulations regarding exploration and extraction from waste piles and tailings ponds that are not part of any ongoing mining operations, these should be handled in general accordance with the Regulation on Waste from Extractive Industries (No. 319 of 2013) and require an environmental permit. The Swedish government is currently reviewing possibilities to simplify regulations for this type of operation. However, it may take several years before new rules can be implemented.

The right to exploration and extraction of mining waste from closed mining waste facilities varies depending on the circumstances and when the waste management was considered closed, but is typically held by the previous mining operator or landowner.

What restrictions and limitations are imposed on the use of domestic and foreign employees in connection with mining activities?

The same laws and provisions concerning health and safety apply for domestic and foreign national employees. An employer with domestic employees in Sweden has to follow the Swedish labour legislation. The same applies when foreign personnel are employed in Sweden. But if an employee is merely posted to Sweden, the employer is only obliged to follow some of the Swedish labour legislation, according to the Act on Posting of Workers (No. 678 of 1999), which was adopted to fulfil Sweden’s obligations according to the corresponding EU Directive (96/71/EC).

Foreign employees sometimes need a work permit in order to work in Sweden. Citizens of EU or European Economic Area (EEA) countries are exempt but they need to inform the Swedish Migration Board if their residency lasts longer than three months. Any employee from a country outside the European Union or EEA who works in Sweden for more than three months needs both a work permit and a residence permit. They may also need a visa.

Social and community issues

What are the principal community engagement or CSR laws applicable to the mining industry? What are the principal regulatory bodies that administer those laws?

The consultation process is part of the permit process within the Environmental Code. According to the Environmental Code, known affected parties shall have the opportunity to express their opinions on a mining application. The principal regulatory bodies are mentioned in question 35.

How do the rights of aboriginal, indigenous or currently or previously disadvantaged peoples affect the acquisition or exercise of mining rights?

Under the Minerals Act, rights holders to the affected land need to be involved during some stages of the granting of exploration permits and exploitation concessions. The indigenous Sami people’s right to herd reindeer is such a right. Reindeer herding is exercised in vast areas of northern Sweden and if the mining operations affect the prerequisites for this right, compensation will have to be paid to the Sami. The Sami will also take part in the application for a permit under the Environmental Code if the mining operation is planned to be carried out within their area.

During 2018, the rights of the Sami people in relation to the mining industry came to the fore - balancing the national interests of reindeer husbandry and mineral extraction being the core subject of debate. However, while Sami rights are a sensitive issue, both politically and in the Swedish media, no changes have been made to Swedish law regarding mining operations or mining rights.

What international treaties, conventions or protocols relating to CSR issues are applicable in your jurisdiction?

International treaties, conventions and protocols (and declarations) of interest are, for example:

• the Law of the Sea Treaty 1982, which regulates deep sea mining;
• the Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters 1998, concerning the right to get information and appeal Environmental Matters;
• the ILO 176 Safety and Health in Mines Convention 1995, which regulates the working conditions in a mine (there exist additional ILO Conventions that can be applicable on mining);
• the Convention on Biological Diversity 1992, which regulates the protection of biological diversity, sustainable use of it and fair and equal sharing;
• the Kyoto Protocol 1998, concerning the decrease of emission of greenhouse gases;
• the Rio Declaration on Environment and Development 1992, and Stockholm Declaration on the Human Environment concerning sustainable development and environmental protection 1972;
• the ILO Declaration on Social Justice for a Fair Globalisation 2008, concerning social protection and human rights in the workplace; and
• the Johannesburg Declaration concerning sustainable development 2002.

The treaties, conventions and protocols only apply to signatory countries.

Sweden has not ratified the ILO 169 Indigenous and Tribal Peoples Convention of 1989, concerning special rights for indigenous and tribal people.

Besides the treaties, conventions and protocols there are different international codes relating to the mining industry (see question 7).

Anti-bribery and corrupt practices

Describe any local legislation governing anti-bribery and corrupt practices.

The Swedish legislation against bribery and corruption is found in the Penal Code. The Code covers not only corruption in the public sector but also in the private sector and between the public and private sector. The relevant provisions are found in chapter 10, sections 5a-5e. An employee or person performing an assignment who, for him or herself or another person, receives, accepts a promise of, or demands an improper benefit for the performance of the employment or assignment, may be deemed as taking a bribe. A person who gives, promises or offers an improper benefit in cases referred to above may, on the other hand, be guilty of giving a bribe. There is no distinction between bribery of public officials and private bribery. Moreover, there is no distinction between bribery of foreign or domestic public officials. However, the involvement of a public official will act as an aggravating circumstance and make it more likely that a benefit will be deemed a bribe.

Additional offences are trading in influence and negligent financing of bribery. Trading in influence involves the act of taking or giving an improper benefit in order to influence a person’s action or decision in the exercise of public authority or in public procurement. An individual acting on behalf of a company that provides money or assets used by a third party for the giving of a bribe may be found guilty of negligent financing of bribery.

Consequences of bribery may range from a fine (proportional to the income of the individual, limited to a maximum of 150,000 kronor) or up to two years’ imprisonment, or in grave cases, imprisonment of between six months and six years. A company may be fined between 5,000 and 10 million kronor.

Do companies in your country pay particular attention to any foreign legislation governing anti-bribery and foreign corrupt practices in your jurisdiction?

Particular attention is paid to the UK Bribery Act and the US Foreign Corrupt Practices Act in view of the extra-territorial reach of these acts and in the former case, its strict liability provisions.

Has your jurisdiction enacted legislation or adopted international best practices regarding disclosure of payments by resource companies to government entities in accordance with the Extractive Industries Transparency Initiative (EITI) Standard?

No.

Foreign investment

Are there any foreign ownership restrictions in your jurisdiction relevant to the mining industry?

There are no restrictions concerning foreign ownership in the mining industry.

International treaties

What international treaties apply to the mining industry or an investment in the mining industry?

There are no particular treaties regarding the mining industry that concern Sweden.

Update and trends

What were the biggest mining news events over the past year in your jurisdiction and what were the implications? What are the current trends and developments in 2019 in your jurisdiction's mining industry (legislation, major cases, significant transactions)?

During 2018, a British-Australian mining company was awarded exploration permits in Sweden’s southernmost county, Skåne. The primary target of the exploration being vanadium; however, deposits of copper, zinc, gold and silver may also be present in the area. This is a move away from a mining industry that has traditionally been based in the north of the country. While it is as yet uncertain whether the exploration will uncover significant mineral deposits, the question regarding potential mining projects in southern Sweden is an area of development to be watched.

New legislation regarding environmental quality norms was introduced into Swedish law in the form of proposition 2017/18:243, water management and hydropower, with changes being made to the Swedish Environmental Code. The new legislation regarding environmental quality norms requires that operations that are likely to have an effect on the quality of bodies of water must be re-assessed to ensure that they meet the new requirements regarding environmental conditions. The changes in legislation gained legal force on 1 January 2019 and will affect a number of ongoing and planned projects within infrastructure, industry and mining.

In June 2018, the Investigation into Financing Regarding Mining Waste (SOU 2018:59) regarding potential actions or measures necessary to efficiently ensure that sufficient collateral security is in place in mining operations for remediation was submitted to the Swedish government. The Swedish Environmental Code currently contains general provisions regarding collateral security and guarantees concerning, for example, environmentally hazardous activities. The provisions also include remediation after mining operations wherein collateral security is provided to the state. The investigation proposes that changes be made to the Environmental Code and the Minerals Act, and that a new law and associated regulations regarding financial collateral security for mining operations is introduced. It remains to be seen where the investigation committee’s proposals will lead after a proposal for new legislation is referred to the Legislative Council for consideration, which may ultimately lead to a new government bill.