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24 March 2014
Sweden has a long history of mining and metal refining stretching back more than a thousand years. Its metal ore and other mineral resources have been major factors in the country's economic development and in building the prosperity that the country enjoys today. At present, the Swedish mining industry is undergoing an expansive phase as a result of strong international demand for metals. According to the Fraser Institute's Annual Survey of Mining Companies 2012/2013, Sweden is the second-most attractive jurisdiction for investments in the mining industry worldwide after Finland.
Swedish mining law, mainly laid out in the Minerals Act (SFS 1991:45) and the Environmental Code (SFS 1998:808), is often described as comparatively favourable to mining interests in terms of both exploration and extraction rights. Triggered by a growing number of exploration projects relating to shale gas and uranium in particular, there is growing criticism that landowner rights need to be strengthened and environmental considerations made at an earlier stage of the regulatory process. A recent draft bill from the government (January 30 2014) suggests amendments to the Minerals Act in relation to the exploration of minerals.
The draft bill relates to changes to the Minerals Act in 2005. At that time it became mandatory for prospectors exploring for minerals to provide property owners and other holders of land rights with information during the exploration phase. Under existing law, the exploration of concession minerals (ie, in principle, all minerals with a commercial value) requires an exploration permit from the Mining Inspectorate, as well as a work plan agreed with, or at least not disputed by, the land owner. Work plans are drafted by the exploration permit holder and must contain a description of the exploration work to be conducted, including a time plan and an assessment of the impact on private and public interests. Work plans must be notified to land owners and other affected parties. No exploration work can be performed until the work plan has been agreed with the parties or, if an agreement cannot be reached, a decision to confirm the work plan has been taken by the Mining Inspectorate.
Following a recent evaluation of the rules (SOU 2012:73), the government concluded that land owners' rights must be further reinforced. To this end, the draft bill has been sent to the Council of Legislation for review and, subject to a final government bill and adoption by Parliament, is scheduled to enter into force on August 1 2014.
The government proposes that extended and more specific information be given in work plans to facilitate land owners' opportunities to influence how exploration work is carried out. According to the proposal, work plans will have to specify in which way such work is adapted to ongoing land use. In addition to existing provisions, work plans must, among other things, contain:
Further, the proposal includes expanded notification obligations for the prospector, both before work commences and following completion, as well as a right for land owners to get work plans translated, if required, into an official minority language (eg, Finnish, Meänkieli or Sami).
From the viewpoint of mineral prospectors, the extended work plan requirements proposed by the government, if implemented, will result in increased administration and higher costs in connection with exploration work. The suggestion that work plans must be adapted to ongoing land use will require prospectors to collect detailed information on land use in the planned exploration area in advance. However, other parts of the widened information requirements are likely to be standardised and suitable for repeated use. The easily accessible national real property register and other online public registers will facilitate additional information collection and are likely to keep the administration burden at a reasonable level.
In addition to the new requirements in the exploration work phase, the government proposes that alum shale should be excluded as a concession mineral. There is no existing market for alum shale and it is not mined. Instead, this mineral indicates the presence of uranium, oil and gas. The exploration of these minerals is often controversial. Under prevailing rules, prospectors often apply for exploration permits for alum shale instead of the mineral of their actual interest. If the draft bill is adopted, in practice this will mean that the prospector will be obliged to reveal the mineral of genuine interest when applying for an exploration permit.
For land owners, the suggested changes to the Minerals Act aim to improve their ability to influence how and when exploration work is carried out. Land owners or other affected parties would still not be in a position to influence whether exploration of minerals is to be allowed at their properties (ie, if an exploration permit is granted). In other words, there is no balancing of interests at this early stage of the mining process and no such changes have been put forth.
Environmental organisations have argued for closer integration between mineral specific legislation (the Minerals Act) and general environmental protection rules (the Environmental Code). The government has proposed no changes in this respect in the draft bill. Nevertheless, the upcoming Parliament elections in September 2014 may raise these questions for further political debate in the future.
For further information on this topic please contact Mikael Wärnsby or Sofia Nilsson at Advokatfirman Lindahl KB by telephone (+46 40 664 66 50), fax (+46 40 664 66 55) or email (firstname.lastname@example.org or email@example.com). The Advokatfirman Lindahl KB website can be accessed at www.lindahl.se.
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