Infrastructure | 258 days ago |

Northland Resources S.A. has been informed that the Swedish government intends to invest in improved infrastructure in the County of Norrbotten. Among other measures, new resources will be allocated to increase the capacity of the Malmbanan rail line. A further SEK 1.3 billion is to be earmarked for the road between Pajala and Svappavaara, along which Northland’s iron ore will be transported.

Northland expects to commence production of high-quality iron ore concentrate in Kaunisvaara, outside Pajala, during the fourth quarter of 2012. From early 2013, the iron ore will start to be transported from Kaunisvaara – 150 km by truck to a transloading terminal in Pitkäjärvi, outside Svappavaara. From there, the product will be transported via the Malmbanan rail line to Narvik in Norway for shipping to end customers.

Consequently, Northland welcomes the Swedish government’s announcement that it will be investing additional funds in the region’s infrastructure. In total, it is proposed that the infrastructure measures increase by SEK 106 billion for the period 2014-2025 compared with the earlier period 2010-2021.

“In order for the mining industry to continue acting as a growth engine and source of employment, particularly in northern Sweden, the government is today announcing investments for the improvement of the Malmbanan rail line and the road between Pajala and Svappavaara. In total, an additional approximately SEK 3.5 billion will be invested in mining-related infrastructure between 2013 and 2017,” the government states in a memorandum.

An infrastructure solution is currently in place that will allow Northland to commence deliveries as planned. In the longer term, however, it is important for the company that the roads be further improved and that the capacity of the Malmbanan line is increased.

“We at Northland are very pleased with today’s announcement that SEK 1.3 billion will be invested in the road between Svappavaara and Pajala and that additional funds are to be allocated to the Malmbanan line. This demonstrates that the government considers our industry important both for the region and for Sweden as a whole. Solid infrastructure, combined with the investments in education, represents an important issue for the development of the Swedish mining industry. Northland will already begin selling iron ore concentrate from the start of next year. However, for our long-term profitability, a rail line between Svappavaara and Pajala would be the best solution,” said Karl-Axel Waplan, President and CEO of Northland Resources.