Terrafame has a significant impact on the Kainuu and Finnish economy
Terrafame published a study report on the company’s regional economic impact in autumn 2016. This report reviewed the company’s direct economic impact as well as indirect impacts of production and consumption in Kainuu and elsewhere in Finland. In autumn 2018, an environmental impact assessment (EIA) report was published on Terrafame’s upcoming battery chemicals plant, which also included a corresponding report on regional economic impact.
According to the report carried out in autumn 2016 by consultant Ramboll Finland Oy, Terrafame’s multi-metal mine and metals production plant play a significant role in maintaining the vitality in the Kainuu region. The effects on employment and economy also extend widely to other parts of Finland and to various industries. The report evaluated the annual impact of Terrafame’s activities during 2019–2023 with the assumption that the company will be operating at full capacity in accordance with its strategy. The effects were compared to a situation in which Terrafame’s mine and metals production plant did not exist. The report did not include the commissioning of the uranium recovery plant, which would also contribute to the area’s economy, employment and competence development.
In the autumn of 2018, Ramboll carried out an additional study on the regional economic impact of the nickel and cobalt sulphate production, i.e., the battery chemicals plant starting in 2021. Three different options were examined in the study with the alternative steam production volume and fuels used. In each of the three options, the battery chemicals plant was found to have extensive economic and employment effects.
Significant increase in the total output of Kainuu and Finland
According to the autumn 2016 report, the total production value (total output) of Terrafame’s mine and metals production plant, together with the relevant indirect effects, will rise to approximately EUR 1.1 billion per year. Together with the multiplier effects, the impact on the total output of Kainuu will amount to approximately EUR 600 million per year.
According to the autumn 2018 study, the battery chemicals plant will further increase the total output of Kainuu by EUR 240–260 million and by EUR 23–63 million in other parts of Finland.
As a result, the total output of Terrafame’s mine, metals production plant and battery chemicals plant, together with the relevant indirect effects, is as high as EUR 1.3–1.4 billion per year, of which Kainuu accounts for EUR 840–860 million.
The term ‘total output’ is used in the context of regional and national economics, and corresponds with the net sales of companies. In the 2016 and 2018 studies, the total output reflects the growth of the net sales of all companies impacted by the operations of Terrafame.
Over 19 percent of Kainuu’s gross domestic product
According to the autumn 2016 report, the impact of Terrafame’s mine and metals production plant on Finland’s GDP will increase to EUR 434 million. Of this, EUR 225 million will be generated in Kainuu, which is equal to 10.9 percent of Kainuu’s GDP compared to the 2013 level. Approximately EUR 210 million will be generated elsewhere in Finland. In total, compared with the 2015 level, this corresponds to 0.2 percent of Finland's GDP.
According to the autumn 2018 study, depending on the option, the battery chemicals plant will increase Finland’s GDP by EUR 203–210 million. Therefore, Terrafame’s operations including the battery chemicals plant in accordance with its strategy would increase Finland’s GDP by approximately EUR 640 million, which is 0.3 percent of Finland’s total GDP compared with the 2017 level, and as much as 19.3 percent of Kainuu's GDP.
Employment impact of 4,700–5,000 person-years
The employment effects of Terrafame’s operation are substantial both for Kainuu and Finland as a whole. According to the 2016 study, when the production operations are in line with the company’s strategy, with the indirect effects included, Terrafame’s mine and metals production plant will employ approximately 1,500 people in Kainuu. Elsewhere in Finland, with the entire supply chain taken into account, the employment impact is approximately 2,800 person-years.
Furthermore, the battery chemicals plant will bring additional work to Terrafame’s industrial site for approximately 150 people, with the multiplier effects being 138–223 person-years in Kainuu and 119–338 person-years elsewhere in Finland.
Consequently, operations in accordance with Terrafame’s strategy will create employment amounting to more than 4,700–5,000 person-years in total.
Almost EUR 230 million in various tax revenues
Based on the studies, operations in accordance with Terrafame’s strategy annually produce in total nearly EUR 230 million various tax revenues.
The amount of annual VAT (value added tax) will be EUR 141 million, corporate taxes EUR 36 million, community and municipal taxes EUR 31 million, taxes on products and production EUR 20 million, and property taxes EUR 1 million. In Kainuu region, the amount of annual corporate taxes, community and municipal taxes, property taxes, and taxes on products and production will total EUR 60 million.
Terrafame’s regional economic impact with the battery chemicals plant.