Mining rights and title in Finland

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?

Finland has a system according to which the discoverer can acquire the rights to the minerals in the ground even if the surface rights are held by the state or a third party. TUKES registers reservations for areas on which exploration permits can be filed and issues exploration and mining permits subject to the legal requirements being met. Currently, less than 1 per cent of the total area of Finland is subject to mining permits.

Exploration

It is possible for private parties to engage in exploration in the form of prospecting work without a permit on areas where the surface rights are held by someone else (private or state). This right is comparable with rights of public access. It is also possible to carry out exploration without an exploration permit but with a landowner’s permit; however, this does not give any priority to acquiring the exploration or mining permit for the target area.

An exploration permit, granted by TUKES, is always required if the activity poses any risk to people’s health, general safety or other industrial and commercial activity, or any deterioration of the landscape or nature conservation. Without exception, an exploration permit is required if the prospecting is targeted for locating or exploring a deposit containing uranium or thorium.

The exploration and mining rights can be acquired by private parties. A reservation followed by an exploration or mining permit, or both, gives the priority and title to the minerals in the target area.

There are increasing numbers of reservations, exploration permit areas and mining permit areas but there are still large areas with good or moderate discovery potential available for interested parties.

Mining

A mining permit gives the right to develop a mine and to carry out mining activities. The holder of a mining permit has the right to exploit mining minerals found in the mining area, organic and inorganic surface materials, waste rock and tailings generated as by-products of mining activities. In addition, the holder may exploit other materials belonging to the bedrock and soil of the mining area to the extent that their use is necessary for the purposes of mining operations in the mining area. The mining permit also entitles its holder to exploration within the mining area. The procedures for establishing a mining area involve the claiming of rights to land use and of other special rights to the areas required for the mining area and auxiliary area of a mine, the determination of compensation and the conducting of required measures of land subdivision.

The decision to grant a mining permit is based on a comprehensive approach, on the one hand, taking account of the needs of prospecting and mining, and on the other hand, considering factors such as the status of landowners and private parties sustaining damage. Moreover, the impact of activities on the environment, landscape, land use and safety, the economic use of natural resources and nature conservation, radiation safety and the reconciliation of user needs in different areas need to be taken into account.

Often, the mining company acquires the title (surface rights) to the land through voluntary acquisitions. Should this not be the case, the government may grant a permit to utilise an area for mining even though the surface rights are held by someone else (redemption permit for a mining area). The formal prerequisite for this is that the mining project is in the public interest.

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 Geological Survey of Finland (GTK) is the national geological organisation as well as the national geoscience centre responsible for collecting and maintaining geoscientific data in Finland. The GTK’s key activities are the mapping and evaluation of natural resources and research and development. In addition to national mapping and geosciences information related to bedrock geology, geophysics, geochemistry and mineral occurrences, the GTK evaluates the ore potential of geological formations to encourage further evaluation by the private sector. All discoveries are tendered to the private sector through the Ministry of Employment and the Economy, and the government has no role in the downstream development of the mineral deposits.

The GTK’s databases cover the entire country with exceptional detail and include:

• high-resolution, low-altitude airborne geophysical surveys (to a 40-metre altitude, with 200-metre line spacing);
• regional till geochemical sampling (one sample per 4km2);
• in-bedrock mapping at a 1:100,000 scale; and
• quaternary geology mapping at a 1:20,000 scale.

Data sets are available in digital geographic information systems form and selected ones are viewable on the GTK’s active map explorer web page (see: http://gtkdata.gtk.fi/mdae/index.html). This web service provides up-to-date information on land tenure, exploration reports, drilling, mines and undeveloped deposits, mineral indications data and bedrock age data in Finland.

The holder of an exploration permit must submit an annual report to TUKES on the exploration activities that have been carried out and their main results. The report must be submitted in electronic format on the template provided by TUKES. The annual report is divided into two parts, of which part 1 (costs and investments) must be delivered to TUKES during February or March and part 2 (geological surveys) by June in any given year.

Once an exploration permit has expired or been cancelled, the exploration permit holder must, within six months, submit to TUKES an exploration work report, the material information pertaining to the exploration and a representative set of drill-core samples. The drill-core samples are eventually reposited at the GTK’s drill-core archive.

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?

Right to carry out prospecting work

In Finland, based on the principle of public access, everyone has the right, even on another’s land, to conduct geological measurements, make observations and take minor samples in order to find mining minerals, provided that this causes no damage or minor inconvenience or disturbance (prospecting work). There are, however, some limitations related to restricted areas.

Prior to sampling commencement, the person or company has to submit a notification to the real estate owner in the prospecting area that contains details of the prospecting area, methods used and targeted mining minerals, as well as other information set out in the Mining Act.

A private party may make a reservation notification and acquire an exploration or mining permit on a first-come, first-served basis. Exploration or mining permits are granted if the applicant proves that the conditions set out in the Mining Act are met and there is no impediment stipulated in the Mining Act to the granting of the permit. However, regardless of an impediment specified in the Mining Act, a permit may be granted if it is possible to remove said impediment through permit conditions or by decreasing the size of the area.

Reservation

The reservation notification is filed in written form with TUKES. The notification must include information on the notifier, the target area (reservation area) and a compilation of an exploration plan and other measures in preparation for the exploration permit application.

The reservation notification may not concern an area that forms part of an exploration area, mining area, or gold panning area, belonging to a party other than the applicant on the basis of a permit referred to in the Mining Act. In addition, the reservation notification cannot concern an area that has previously been a reservation area until one year has passed since the expiry or cancellation of the reservation decision.

The reservation gives priority to get an exploration permit and is valid for a maximum period of 24 months, within which time an exploration permit application must be filed or the reservation will expire. Should the reservation permit holder carry out small-scale prospecting work, the holder has to give prior notice of prospecting to the landowner of the prospecting area as mentioned above. A reservation does not entitle to exploration unless the landowner in question gives his or her permit. A reservation cannot be assigned to another party.

Exploration permit

Exploration permits are granted on a first-to-file basis by TUKES, taking into account that a reservation gives priority. Mining permits for uranium and thorium are granted by the Finnish government.

Simply, if exploration cannot be carried out as per the above-mentioned prospecting work and the property owner does not consent to exploration, a permit granted by TUKES (exploration permit) is needed. An exploration permit is also required if the exploration:

• could cause harm to people’s health or general safety;
• damage to other industrial and commercial activity; or
• there is any further deterioration in value related to the landscape or nature protection values.

Further, an exploration permit is required if the targeted minerals are uranium or thorium.

The application for a permit must include reliable information on the applicant meeting the prerequisites for carrying out operations commensurate with the following:

• the permit sought;
• the area and parties concerned;
• a preliminary assessment of the mining minerals in the area, and the basis for such an assessment;
• plans concerning the activities;
• the environmental and other impacts of activities; and
• aftercare measures.

The exploration permit also includes provisions on the following (among others):

• the times and methods of exploration surveys and the equipment and constructions used;
• measures to diminish harm caused to reindeer herding in a special reindeer herding area;
• an obligation to report exploration activities and their results;
• post-exploration measures;
• the waste management plan for extractive waste; and
• collateral securing the post-exploration measures.

The holder of an exploration permit has an obligation to carry out prospecting or a survey. TUKES can decide that an exploration permit will expire if operations have been interrupted continuously for a minimum of one year for a reason given by the permit holder. The person who, in connection with the exploration, intends to damage or cut down trees has to inform the landowner in advance. Damage and harm arising from exploration has to be compensated in full. The exploration permit holder must pay an exploration fee (see also question 19) and compensate landowners or owners of the water areas for all damage and harm caused to them. The exploration permit holder must deliver to the mining authority a detailed annual report on the exploration work carried out in the permit area. After the termination or expiry of the exploration permit, the permit holder must immediately restore the exploration area to the condition required by public safety, remove temporary constructions and equipment, attend to the rehabilitation and tidying of the area and restore the area to its natural status as far as possible. The permit holder must also submit to the mining authority, within six months, an exploration work report, the information material pertaining to the exploration and a representative set of core samples accompanied by the drill logs.

Mining permit

Like exploration permits, mining permits are also granted on a first-to-file basis by TUKES. However, an exploration permit holder has priority to the mining permit in respect of the same area. Mining permits for uranium and thorium are granted by the Finnish government.

The establishment of a mine and undertaking mining activity are subject to a mining permit granted by TUKES. Even when the mining permit application relates to an area for which an exploration permit has been granted, the mining permit is a new permit and subject to new scrutiny of the project on its merits. The prerequisites for getting a mining permit are that the deposit is exploitable in terms of size, ore content and technical characteristics.

A mining permit entitles the holder to exploit the mining minerals found in the mining area, the organic and inorganic surface materials, excess rock, and tailings generated as a by-product of mining activities and other materials belonging to the bedrock and soil of the mining area to the extent that the use of these is necessary for the purposes of mining operations. The mining permit also entitles the holder to carry out exploration within the mining area.

The mining permit holder is obliged to ensure the following:

• that the mining activities do not cause damage to people’s health or danger to public safety;
• that mining activities do not cause significant harm to public or private interests;
• that they reasonably avoid the infringement of public or private interests in relation to the overall costs of the mining operations;
• that excavation and exploitation do not entail obvious wasting of mining minerals; and
• that potential future use and excavation work at the mine and deposit are not endangered or encumbered.

The mining permit holder is obliged to submit an annual report to the mining authority on the extent and results of the exploitation of the deposit and to inform of any essential changes in the information on mineral resources.

In the mining permit, TUKES sets a time limit during which the permit holder has to start the mining activity or such preparatory work that indicates that the permit holder is seriously aiming at actual mining operations. If the time limit is forfeited, TUKES may decide that the mining permit should expire.

Finally, when the mining activities have ended, the mining permit holder has two years to bring the mine and any auxiliary areas up to the standards required by public safety and to make the necessary rehabilitation, cleaning and landscaping measures. This includes the measures that have been set out in the mining and mine safety permits.

Redemption permit for a mining area

In most cases, the mining company acquires the title to the surface rights through a voluntary purchase. However, should the applicant of the mining permit not hold the surface rights, the applicant has to obtain, from the government, the right to utilise the area for mining (a redemption permit for a mining area). The granting of such a permit is subject to the mining project being based on public need and the mining area meeting the requirements set forth in the Mining Act (see question 15).

The holder of the mining permit must also pay an excavation fee to the holders of the surface rights as well as compensate in full for damages or harm to the landowners (see question 19).

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

Renewal of an exploration permit

An exploration permit is granted for a fixed term of up to four years. The permit can be extended for up to three years at a time for a total period of 15 years. The extension is subject to the following requirements:

• the exploration must have been effective and systematic;
• the determination of the exploitability of the deposit requires follow-up research;
• the permit holder has complied with the terms of the permit; and
• extending the permit does not cause unreasonable harm to private or public interest.

Mining permit

A mining permit is, as a rule, granted until further notice. A permit can be granted for a fixed term only where there are compelling reasons that relate to, for example, the size and qualities of the deposit and the ability of the applicant to start the mining operation. The term may not exceed 10 years from the date on which the permit gained legal force.

The Mining Act requires TUKES to review the terms of the mining permit every 10 years even for those permits that are valid until further notice. However, the revision of the terms may not materially lower the profit that is derived from the mine.

Transfer of permits

A reservation (for an exploration permit) cannot be transferred.

An exploration permit and a mining permit are transferable. Moreover, an exploration permit application and a mining permit application can be transferred. The transferee has to meet the same legal requirements that are detailed in the Mining Act for a permit holder. For the production of uranium or thorium, a permit pursuant to the Nuclear Energy Act is also required.

The transfer is subject to the approval of TUKES, which generally has to approve the transfer if the formal requirements have been met. However, TUKES may decline to approve the transfer if, for example, the transferee has earlier failed to comply with requirements of the Mining Act.

Change-of-control situations

A change of control in the permit holder (eg, the shareholder of a permit holder company sells its shares to another) does not have to be approved by TUKES in order for the permit to continue to be valid. However, as the exploration permit has a limited term and also because the terms of a mining permit are revised every 10 years, the change of control may lead to changes in the terms of the permit. This could be the case if, for instance, the ability of the permit holder to fulfil the requirements of the permit changed, owing to the change of control.

What is the typical duration of mining rights?

See question 11 in respect of duration and extension of mining rights.

TUKES may cancel an exploration permit, mining permit, or gold panning permit if:

• in the permit application, incorrect or incomplete information has been given that essentially affected the conditions under which the permit was given, or the permit consideration in other ways;
• the permit holder no longer meets the requirements for granting of a permit; or
• the permit holder has materially neglected or violated the obligations, restrictions, or permit regulations laid down in the Mining Act.

If the deficiencies, violations or neglect can be corrected or are insignificant, the Mining Authority shall, before making a decision set out above, set a time limit for the permit holder in question to rectify the defect, violation, or neglect.

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?

Parties eligible to apply for an exploration or mining permit are the parties entitled to operate a business in Finland, such as:

• any natural person domiciled within the European Economic Area (EEA);
• any Finnish corporation or foundation; and
• any foreign corporation or foundation that has been established in accordance with the laws of a state belonging to the EEA and that has its registered office, central administration or principal place of business in a state belonging to the EEA and has registered a branch office in Finland.

The Finnish Patent and Registration Office may grant a permit to conduct business operations governed by the Mining Act to another natural person as well as to a foreign corporation or foundation. Such a permit is also required for a general or limited partnership unless at least one of the partners in the general partnership or one of the liable partners in the limited partnership is a natural person or corporation that fulfils the above requirements. In addition, a governmental agency may apply for such permits.

In practice, exploration and mining companies usually set up a Finnish subsidiary in the form of a limited liability company through which the activities are carried out

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

The supervision of the granting of mining rights, their validity and the compliance with the Mining Act by the holders of the mining rights, is carried out by TUKES, whose decisions can be appealed to the administrative courts and, given that a retrial permit is granted, further to the Supreme Administrative Court. Damage compensation claims and injunctions or other temporary procedural remedies are handled by the local district courts as the first instance. Punishments under the criminal code relating to obligations set forth in the Mining Act are also handled by the district courts in the first instance.

Finland is a party to the United Nations New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention), therefore, foreign arbitration awards with respect to countries belonging to the New York Convention, are, as a rule, enforceable in Finland.

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

Surface rights available for private parties are ownership of land, tenancy or usufruct rights to the surface.

Ownership of land is acquired by purchasing the property by executing a written purchase agreement that must be executed in a specified form. The landowners of a mining area are, however, not under an obligation to sell their property to the mining right holder.

Tenancy is agreed with the landowner in a tenancy agreement, which has to be made in writing and signed by both parties. It is also possible to agree with the landowner on the right to take extractable mineral resources from a property. The right to utilise extractable mineral resources from a property can also be carried out by including in the mining permit such areas where there are mineral resources that are suitable for filling in during mining operations or other material that is required as supplementary material in the processing of the mined products.

Should the mining company not purchase the surface rights, it can obtain usufruct rights to the area needed for mining activity. This takes place either through contractual means or by applying to the government for a redemption permit for a mining area. A redemption permit must be based on a public need and therefore these are not automatically granted. This public need is assessed on the basis of the impact of the mining project on the local and regional economy and employment and society’s need for the raw material.

In this case, the title to the land does not transfer to the mining company. However, if the mining area or its auxiliary area causes major inconvenience for the utilisation of the area, the owner of the surface rights may demand that the whole property or a part thereof is redeemed by the holder of the mining permit. The principle of full compensation to the landowner is the rule. Some other situations exist when the owner of the surface rights may demand redemption. Usually, if possible on reasonable terms, the mining companies purchase the surface rights from the landowner(s) through voluntary acquisitions.

The general rule in Finland is that the owner of a property has to use that property in a way that does not cause inconvenience to neighbours. The Mining Act obliges the holder of the mining rights to compensate the landowners, tenants and other parties for damage and inconvenience, whether temporary or permanent, caused by mining or exploration operations.

In determining the compensation payable to the holders of the surface rights, the principles applicable to compensation in the event of expropriation of property for general needs are used, which generally require full compensation to be paid.

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?

The government can participate in mining projects, for example, through voluntary investments in mining companies. The government cannot demand a stake in a mining project if the stakeholders of the project do not agree to this. Mining companies do not have to be listed in Finland. Many companies are listed abroad, such as in Toronto or London and may or may not have a dual listing at the OMX Nasdaq Helsinki Exchange.

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

There are no provisions on government expropriation of licences.

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

Prospecting work and the granting of an exploration permit or gold panning permit is prohibited in the following areas:

• on the ground of a cemetery, or within 50 metres of such an area;
• in an area used by the Finnish Defence Forces or any area controlled by the Border Guard where movement is restricted or prohibited, or within 100 metres of such an area;
• in an area where movement is restricted or access denied to outsiders;
• on a traffic route or passage in public use;
• within 150 metres of a building intended for residential or work use, or comparable space;
• in an area in horticultural use;
• within 50 metres of a public building or utility, or either a power line with a voltage of over 35,000 volts or an electricity substation; and
• in any other similar area, designated for special use.

However, prospecting work as well as exploration may be carried out in an area referred to above, except for cemeteries, with the consent of the authority or institution competent in the matter, or that of the relevant holder of rights.

Moreover, there are limitations with regard to certain traffic areas, which in certain cases require the consent of the authority or institution competent in the matter, or that of the holder of the rights for exploration whenever the area in question is a street area or market place, a road area of a highway, an airport or another area in aviation use, a railway area, a canal used for public traffic or another such traffic area, or an area within 30 metres of any of the above-mentioned traffic areas. There are also certain limitations with regard to areas that have previously been covered by an exploration permit or mining permit.

The mining area and the auxiliary area to a mine should, in principle, not be located in an area for which an exploration permit or a gold panning permit cannot be granted, based on the above limitations. However, a mining permit may be granted regardless of an impediment referred to above if the mining area cannot be otherwise implemented as a continuous area of a size and shape that facilitates compliance with requirements concerning safety, location of mining activities and mining technology, and the area in question is not a cemetery or an area of the Finnish Defence Forces or any of the special traffic areas referred to above.

Finally, exploration activities in a Natura 2000 area (ie, a protected area, having certain protected nature values that cannot be substantially weakened) are subject to particular scrutiny. TUKES may not grant a permit for an exploration project, if the exploration to be carried out indicates that the project would have a significant adverse impact on the particular ecological value for which the site has been included in, or is intended for inclusion in, the Natura 2000 network.