1. Assessment and recommendations
Upper Norrland is the key mining region in Sweden and has the potential to become a global leader in environmentally sustainable mining
Upper Norrland, Sweden’s northernmost and least dense region, is a key mining region at the national and European levels
Upper Norrland is the largest Swedish Territorial Level 2 (TL2) region in terms of land area and concentrates 5% of Sweden’s population, which makes it the least densely populated region in the country (3.4 inhabitants per square kilometre). Upper Norrland includes two TL3 regions (Västerbotten and Norrbotten). Amongst the two, Västerbotten is more densely populated (4.8 inhabitants per square kilometre) and hosts the largest city in the region (Umeå), home to 24% of Upper Norrland’s population. Norrbotten, in turn, is larger in land area (64% of Upper Norrland) and concentrates most of the active mines and largest production volumes in Sweden. Upper Norrland has the third-highest level of gross domestic product (GDP) per capita across the 8 TL2 regions in Sweden and a lower unemployment rate (5.1%) than Sweden (6.9%) and 40 TL2 OECD mining regions (7.3%).
Upper Norrland concentrates 9 of the 12 active mines in Sweden and provides 90% of the iron ore, 39% of the lead, 37% of the zinc and 24% of the gold production in the European Union (EU). This makes it a key mining region at the national and European levels. Upper Norrland has the largest underground iron ore mine in the world (in Kiruna) and Europe’s largest copper mine (in Gällivare). Norrbotten hosts five mines extracting mainly iron ore and copper, which and are located in northern municipalities of Gällivare, Kiruna and Pajala. In the case of Västerbotten, most of the mines produce lead, gold, copper and zinc and are concentrated in the municipalities of Lycksele and Skellefteå. Mining is a relevant driver for growth in Upper Norrland, providing 19% of regional GDP. The state-own company LKAB and the private company Boliden are leading Upper Norrland’s mining operation and production.
Upper Norrland has currently a number of competitive advantages to become a global leader on environmentally sustainable mining
Upper Norrland benefits from a number of assets to support mining development and unlock new growth opportunities. It includes a pool of mining and metallurgic companies at the technological frontier of environmentally sustainable mining, working in close collaboration with universities and research centres to increase energy efficiency and establish a carbon-free mining value chain. This innovative environment is coupled with a relatively highly skilled labour force (35.7% with tertiary education in 2017), which is above the average level in OECD TL2 benchmark of mining regions (34.5%).
Upper Norrland’s strategic geographic location in the Arctic Circle also offers a large variety of natural ecosystems and biodiversity, positioning the region at the frontline of global environmental agendas. The region’s bedrock has a high potential of rare minerals, which are needed to support the clean energy transition, and concentrates the largest mineral reserves and non-exploited sites in the country. Upper Norrland benefits from reliable green energy infrastructure, providing 21% of the energy in Sweden, mainly from hydropower. The region also has a high broadband coverage recording a higher share of households connected to broadband (99% in 2019) than the average European TL2 regions (98% on average in 2019) and 40 comparable OECD TL2 mining regions (70%).
Drawing on Upper Norrland’s assets, Sweden can play a key role in global environmental agendas and the EU strategy of raw materials
Sweden’s policy framework puts a strong emphasis on innovation in mining as a vehicle to boost economic growth and accelerate the transition towards a zero-carbon economy
Sweden’s Mineral Strategy, the National Strategy for Sustainable Regional Growth and the Swedish Innovation Strategy, provide guidelines for the sustainable development of the Swedish mining ecosystem. Sweden’s policy strategies point in the right direction by supporting a close interaction among innovation, mining development and environmentally sustainable policies. This strategic vision has enabled the implementation of a number of cross-sectorial initiatives on mining innovation to minimise residual products and the environmental footprint of mining operations (e.g. projects associated to the Strategic Innovation Programme for the Swedish Mining and Metal Producing Industry).
Yet, Sweden needs to update its national mining strategy with a regional perspective and to improve the efficiency, predictability and transparency of its regulatory framework for mining
The national policy framework lacks clarity on the role of mining in the future development of Swedish regions and a long-term vision to unlock the innovative potential of local mining ecosystems. Sweden’s Mineral Strategy expires in 2020. The update will need to better integrate regional strategies on mining development and support SMEs and suppliers involved in the mining value chain. Becoming a powerhouse in sustainable mining requires a clear communication strategy to attract local and international actors. Sweden can improve its current information platforms on mining by creating a unified voice that promotes its assets for carbon-free mining value chains and includes particularities of its local mining clusters.
A revised mining strategy in Sweden needs also to outline a set of measures to help improve how mining regions and municipalities benefit from mining activities and ensure shared value creation. Increased concerns for the negative environmental effects of mining activities, combined with the perception that automation can displace or reduce local employment opportunities, have led many mining regions to increasingly emphasise the need for a more even sharing of the benefits of mining ventures. To this end, the strategy needs to first identify suitable monetary and non-monetary benefits for mining communities and, second, create the conditions to make the most of them.
In recent years, numbers for exploration permits (approximately 1 300 in 2008 and 600 in 2019) and exploitation permits have decreased in Sweden, while the number of appeals has increased (5 appeals between 2000 and 2008 and 12 appeals between 2009 and 2017). This suggests that the permitting process for mining development has become lengthier and more unpredictable. While slight improvements were made in the process – for instance by increasing staff and strengthening requirements for public consultations – there is room for improvement: changes to the system are needed to increase attractiveness for investors, especially small firms, resolve planning bottlenecks for municipalities and avoid tensions between interest groups.
Key challenges in the process include its complexity, limited transparency and separated decision-making on land use and other environmental factors that give only limited consideration to social, economic and cultural aspects as well as cumulative aspects of mining projects. In the current process, there is significant uncertainty on the scope and expectations for permit applications resulting in delays through additional requirements and unpredictable authority intervention. This disadvantages small mining investors, which have limited resources in comparison to large established companies. Moreover, the segmented decision-making process in combination with weak definitions on which and how socio-economic, cultural and cumulative impacts are considered in decision-making reduces the possibilities for comprehensive decision-making assuring positive contributions to sustainable regional development.
Upper Norrland needs to strengthen its business ecosystem to mobilise its local assets and support a sustainable and resilient future for people and local business
Outmigration of young population and ageing have led to a shrinking workforce in the region
Upper Norrland faces a rapid population decline, mainly driven by outmigration of young population. Between 2000 and 2019, population growth in Upper Norrland (1.7%) was far below the rates of Sweden (15.2%) and the TL2 benchmark of mining regions (17.5%). The net amount of people leaving Upper Norrland (7.5% of its population in 2001-18) is the highest across all Swedish regions (2.4%) and above the level in TL2 benchmark of mining regions (2.6%). The majority of people leaving are young and female.
Alongside with outmigration, the elderly dependency ratio in Upper Norrland (36.6% in 2019) has increased almost twice as fast (9.2 percentage points) than in Sweden (5.2 percentage points) over 2001-19. International migration has helped mitigate the population decline but the region still needs to accelerate the intake of foreign people and retain them. At the TL3 level, Norrbotten is experiencing a higher outmigration and population ageing than Västerbotten. Mining municipalities in both regions are most affected by population decline (-3.8% on average between 2000-19) when compared to regional urban centres (17.5%).
Upper Norrland needs to further involve municipalities and SMEs in the innovation process of firms and universities, boost entrepreneurship culture and prepare its workforce for technological changes
Upper Norrland’s municipalities and small businesses have a low interaction within the innovation process of firms and universities. Mining and manufacturing companies are the main drivers of the technological innovation process in Upper Norrland, with a weak involvement of municipal development strategies or local businesses. The traditionally nature-based economy and small market size have led to local economies being dominated by a small number of large mining firms, leaving many SMEs locked into supplier relationships. This phenomenon, coupled with a low unemployment rate, hampers incentives to create new companies in sectors outside mining. In this regard, both regions have scope to improve the implementation of their innovation strategy across all municipal governments and collaborate with large firms and universities to support entrepreneurship, particularly from women, and innovation capacity of small and micro firms.
To support the transition towards new economic activities linked to green technologies and to meet industry demands, Upper Norrland needs to ensure the supply of labour with the right skills. The region currently faces challenges to fulfil the labour demand of current and future industry needs (e.g. the future cluster of batteries). Furthermore, automation in mining and extractive industries poses a high risk of job displacement and change of labour demand while also offering opportunities to increase productivity, raise income and integrate new population segments in mining activities (young and women). To seize these benefits, the region needs to manage the transition processes targeting policies to upskill its labour force, especially to the most vulnerable workers.
Upper Norrland can improve internal and external co-operation to consolidate its vision of development and support global environmental agendas
Västerbotten and Norrbotten currently lack a common brand and vision to promote the region as a provider of environmentally sustainable practices and technologies. Both regions have differences in their economic structures, which provides scope for complementarities in strategic policies. The diversified economy of Västerbotten, with a higher share of services, can better support the industrial developments undertaken in Norrbotten’s mines. A common vision will help to strengthen the co-ordination with the national government and attract international investment. To this end, both regions require a clear brand to become internationally visible as an attractive region on mining and environmental technology.
Upper Norrland’s transition towards a high technological and know-how hub for environmentally sustainable mining and minerals value chains is very much in line with the efforts undertaken by various EU networks and international environmental agendas (EU and Arctic strategy). To make the most of these common goals, Upper Norrland needs to enhance its involvement in international mining networks and adopt and active participation in global environmental agendas (Arctic Strategy) by promoting the benefits of the carbon-free mining value chain.
A more developed and inclusive mechanism of dialogue and consultation with all local stakeholders is necessary to improve acceptance and promote sustainable mining in Upper Norrland
Local support for mining and extractive activities is crucial for the success of mining ventures and the social climate. In Sweden, opposition to mining has increased in recent years due to concerns around socio-environmental externalities and demands to recognise Indigenous peoples’ rights. The institutional framework regulating permitting processes is not seen as fair or trustworthy by all parties. This is largely because the system provides few entry points to the process and offers limited direction or legal requirements for authorities and proponents on the structure and quality of consultations with local and regional stakeholders on mining development, including Indigenous Sami communities. This results in different standards applied across places and decreases the ability to identify critical issues early and better adopt a project proposal to the local environment and social context.
Relationships with Sami people are of particular importance in this context as 99% of the value of the mineral extraction was produced in Sápmi (region traditionally inhabited by the Sámi people) in 2016 and, to date, 12 mining concession permit applications for large-scale mines are within Sápmi. The absence of Sami rights to the ownership of land, as well as missing legislation on the “duty to consult” in the mining context, coupled with equalisation of reindeer herding along with minerals extraction as issues of public interest, generates uncertainty and conflict for all parties in northern Sweden.
In Västerbotten and Norrbotten, there is a need to better link regional development objectives with land use
Latest reforms have enabled Västerbotten and Norrbotten to take the lead in regional development including regional growth policy. Yet, these priorities and visions are not always reflected or considered in how land is planned as responsibilities for competencies related to economic development and land use are separated. Consequently, regional development programmes miss a physical planning perspective and municipal planning misses a regional development perspective. This is a challenge, as the expansion or introduction of extractive industries generates new land use and infrastructure requirements that have implications at the regional and municipal scales. Furthermore, land use decisions are often largely based on compliance with national guidelines (such as areas of national interests) and are limited in their flexibility to respond to rapidly arising needs. In order to deliver on regional development objectives in both TL3 regions, land use planning needs to be better linked to regional development. Developing a regional special plan can help to improve decision-making with regard to extractions for commodity production as well as conservation of cultural and natural capital and offer a holistic description of how land is currently used and what is planned for the future.
Becoming a global leader in environmentally sustainable mining
I. Strengthen and update Sweden’s policy framework to become a lead country in sustainable mining. For this, the national government should:
1. Define a long-term vision to clarify the role of mining for regional development and support environmentally sustainable mining processes and technologies within the National Strategy for Sustainable Regional Growth, the Swedish Innovation Strategy and Sweden’s Mineral Strategy.
2. Update the National Mineral Strategy to incorporate the local strategies around mining. It involves clarifying the role of regions and municipalities in the implementation of the strategy, mobilising the potential of small businesses in mining value chains and helping prepare regions to face global megatrends. The Canada Minerals and Metals Plan is a good example of a national plan that involves both national and regional governments in strategic actions.
3. Identify mechanisms to help mining regions capture greater value from ongoing and planned mining ventures. This involves evaluating possible monetary and non-monetary benefit-sharing mechanisms for mining communities and the framework to make the most out of them.
4. Strengthen the brand name of Sweden’s mining ecosystem to consolidate it internationally as a “sustainable mining” trademark. This involves creating a single platform to consolidate and diffuse information on the national and local mining ecosystems as well as provide advisory services and networking activities.
II. Enhance the innovation ecosystem in Upper Norrland to become a global leader in environmentally sustainable mining. For this, the regional councils of Västerbotten and Norrbotten should:
5. Strengthen the integration of municipal governments in the innovation process of universities and mining firms by:
Formalising the co-operation between municipal governments and mining companies around innovation projects. This can be done through formal meetings open to local businesses, research institutions and non-mining and mining municipalities.
Promoting a formal collaboration among universities and regional and municipal development strategies to improve the innovation capacity of municipal governments. The regional councils can learn from the partnership between Karlstad University and Region Värmland.
6. Enhance entrepreneurship culture and innovation capacity of mining suppliers and SMEs by:
Strengthening the mechanisms to involve suppliers and SMEs in the innovation process of mining firms, especially concerning the transition to environmentally friendly practices. This includes collaborating with the large mining firms in the value chain (from producers to manufacturing) to lift standards and innovation of mining suppliers and associated SMEs. The example of the BHP accelerator programme for suppliers in Chile can be a guiding practice.
Boosting entrepreneurship culture and micro companies’ participation in innovation systems. This involves including an entrepreneurial angle to the education and training programmes for the young and working-age population as well as providing insurance support to entrepreneurs, with targeted programmes for women. Furthermore, the ongoing collaboration with universities needs to be expanded to engage smaller firms through training (i.e. personal counselling) and access to universities’ research equipment and staff for business needs.
7. Reinforce the implementation of smart specialisation strategies by:
Developing an institutionalised platform for dialogue to monitor the implementation of the strategy and ensure continuous engagement of all actors. This platform should follow a cluster approach to channel funding for and implement strategies that connect mining innovation with other economic activities. This can follow the Georange model by expanding it to other sectors and get inspiration from the Lapland approach.
Leveraging on European funds to align municipalities, universities and local businesses with the innovation strategy. This should involve a co-ordinated approach in applying for these funds, to realise policy complementarities among different levels of government in Upper Norrland.
III. Foment internal and external co-operation to consolidate Upper Norrland’s vision of development and support global environmental agendas. For this, both regional councils should:
8. Define a common vision and brand for mining development in Västerbotten and Norrbotten. This should capitalise on the existing Georange platform to develop a clear regional branding and strengthen international visibility by promoting the mining industry as a green and high technology industry.
9. Co-ordinate Västerbotten and Norrbotten regional development strategies to develop and internationalise technologies and practices for a carbon-free mining value chain. This can be materialised through shared flagship projects that unlock synergies among ongoing local initiatives and actors, and attract funding from EU funds and external partners. Georange and the planned battery hub in Skellefteå can trigger such co-ordination.
10. Take a lead role in EU mining networks and Arctic co-operation to promote the benefits of the carbon-free mining value chain for global environmental agendas. This involves enhancing its participation in international networks and increasing knowledge exchange with other Arctic regions, EU official and environmental actors to position sustainable mining processes as a relevant mechanism to support the EU and Arctic agenda for environmental transition and the EU agenda for self-sufficiency in raw materials.
Improving framework conditions for mining and sustainable regional development
IV. Strengthen the local business environment to make the most of mining and diversify the economy. For this, both regional councils and municipal governments should:
11. Develop an institutional body to promote and oversee co-operation among Upper Norrland’s municipalities. This can be done through an institutional body within the regional council or the creation of an inter-municipal development agency and should centralise economic information, co-ordinate municipal strategies and advise local businesses. Business Joensuu, in North Karelia, Finland, represents a guiding example for this type of structure.
12. Accelerate the attraction and integration of skilled migrants through better collaboration among municipalities and other regional actors. This should involve enhancing job-matching services and exchange of information on migrants’ skills among municipal governments as well as promoting further partnerships between migrant organisations, unions and businesses. Joint programmes with universities, industrial PhDs for example, can retain young people – especially women – and increase the attraction of new residents.
13. Improve training and education programmes to prepare the workforce for technological changes and further include women in value-added activities. This should be done through joint work with mining companies and universities to align vocational education and training (VET) programmes with future industry needs, provide targeted grants for training to workers in jobs at risk of automation (individual training accounts) and leverage technological changes to involve women in mining value-added activities.
V. Improve Sweden’s regulatory framework to better reflect regional development opportunities and increase predictability. For this, the national government should:
14. Adopt instruments to improve predictability, by introducing set timelines for decision-making at the onset of an application process. Outlining intermediate steps and windows for feedback and dialogue can provide project proponents with more clarity on when determinations are made and ensure that public consultations are planned with sufficient lead-time.
15. Strengthen the incorporation of socio-economic, cultural and cumulative impacts in decision-making for mining concessions and environmental permits. This requires developing detailed explanations in the legislative language of the Environmental Code and other provisions that describe these impacts as well as drafting detailed guidance for project proponents on how impacts should be assessed. Considerations of cumulative aspects should include their contribution to regional development objectives and make use of context-specific sustainability-based criteria that account for special and temporal impacts and interrelationships.
VI. Increase legitimacy and transparency of mining and permitting processes through more developed and inclusive mechanisms of dialogue and consultation with all local actors, including Sami people. For this, the national government should:
16. Develop clear and consistent guidelines for the mining industry. It should define how the consultation process should proceed and who should be involved in the process by including parameters around what type of information is provided to communities at each step of the process. This should also clarify to what extent project proponents and responsible authorities ought to take voiced perspectives and positions into account. Specific guidelines for consulting with Sami villages should be developed together with the Sami Parliament and other Sami stakeholders. These should also define the status of Sami traditional knowledge in the consultation.
17. Ensure early-stage engagement and consultation rules within the framework of the Minerals Act and Environmental Code. This should include how and when notifications should proceed and the nature of the engagement (format, etc.) as well as required documentation.
18. Strengthen the capacity of rights holders and interested parties for engagement, including Sami villages. This should entail that proponents need to provide financial resources to affected parties to compensate for the cost incurred in corporate consultation without any obligation influencing the outcome. Further, greater overall institutional and analytical capacity should be provided to special interest holders to manage demands for consultation. For affected Sami people, the Sami Parliament could play a stronger co-ordinating role in distributing information to Sami villages with regards to making contributions in consultations, conducting consultations and making agreements with mining companies.
VII. Better linking regional development with land use and resources planning. For this, regional councils should:
19. Create an effective co-ordination mechanism that allows for strategic dialogue about land use and economic development between municipalities and regional councils. Planning based on potentials and opportunities can be incentivised by developing strategic spatial plans at a regional scale. Regional spatial plans should account for interrelationships at the functional scale and can help guide regional and municipal planning. It should also be used to guide decisions made on regional development policies and cumulative impacts though informing the platform for resource development.
20. Develop a platform for resource development to facilitate regional and sustainability-based planning for mines and natural resource projects together with other actors. The platform would oversee all mining and potentially other infrastructure and energy applications in the region, compile information on land use through a geospatial database and act as a contact point for all stakeholders, including authorities, proponents for mining projects and landowners, interest holders and the general public. It could help to reduce frictions of multiple reviews and entities, ensure the neutrality of consultation processes and inform decision-making on developments with regards to land use and cumulative effects.