The exploration industry can - temporarily - exhale after a change in the law

2021-02-11
12:57
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The exploration industry can – temporarily – exhale after a change in the law

There will be extensions of exploration permits. It was clear on Wednesday when the Riksdag clubbed a change in the Minerals Act.
– Very positive, the pandemic has hit the exploration companies hard, says Maria Sunér, CEO Svemin.

When the Riksdag on Wednesday decided that all exploration permits should be extended for one year, as a measure to make it easier for exploration companies affected by Corona, it would have immediate consequences for several exploration companies. Talga, which is developing a graphite deposit in Vittangi in Norrbotten, followed Wednesday’s debate and vote closely.

– Today’s decision shows that they have listened and understood how important the modern, Swedish mining industry is for a sustainable transformation of the entire economy, says Talga’s CEO Martin Phillips.

At the same time as Swedish mining companies remained stable during the Corona pandemic, the crisis has hit all exploration hard, the first and absolutely crucial stage for a functioning mining industry. The reason is that exploration is a capital-intensive activity that is often completely dependent on external financing via established financial markets in order to be able to conduct active research work. If this cannot be done, exploration companies risk losing their permits and the investments made will be in vain. The business can thus not take a break – even if the outside world does.

Exploration permits can be granted for three years and then extended by a maximum of 3 + 4 + 5 years, i.e. a total of 15 years’ validity. At each renewal, the company must be able to show that it has carried out explorations according to plan. In 2020, exploration has been difficult to carry out, especially as the work is usually limited to a few summer months. It has been both difficult to get equipment into the country, but also difficult to get the staff needed – often international expertise.

The origin of the change in the law that the Riksdag decided on on Wednesday is a proposal that Svemin submitted to the government in a petition already at the beginning of the pandemic.

– We are happy that it has now become a reality for all permits and not just for those who are in the final extension as in the first proposal from the government in June. Now the whole of 2020 can be seen as a lost year, says Maria Sunér, CEO Svemin.

But the danger for the exploration industry is not over yet. Unfortunately, the situation looks strained ahead of the summer season 2021 when intensive exploration need to be carried out to compensate for the lost time. It should not be ruled out that further extension may be needed unless the pandemic situation improves significantly in the coming months.

The change in the law will enter into force as early as March 1, 2021.

Photo: Svemin, Talga

FACTS

The new change means that the validity period for exploration permits that were valid on 1 July 2020 and are still valid on 1 March 2021 and that have not been extended previously must be extended by one year. The proposal also means that the period of validity shall be extended by one year for exploration permits which are valid on 1 March 2021 and which have previously been extended by showing that an appropriate survey has been carried out or that the permit holder has acceptable reasons why a survey has not been carried out. made it probable that the area will be investigated during the period covered by the application. The period of validity shall be extended by one year also for permits that are valid on 1 March 2021 and which have been extended by showing that there are special reasons for extension. The amendments to the law are proposed to enter into force on 1 March 2021.

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