MAC: Mines and Communities

Finland:Talvivaara bosses merely fined for "environmental crimes"

Published by MAC on 2016-05-19
Source: YLE

Kainuu court reduces charges, fines Talvivaara bosses for environmental crimes

13 May 2016

The Kainuu district court on Friday issued fines and toned down charges for three senior Talvivaara managers accused of aggravated environmental crimes. A fourth defendant had all charges against him dismissed. The court also ordered the company’s now bankrupt Sotkamo mine to pay a 300,000-euro fine and 3.5 million euros in compensation to the state.

The two prosecutors who brought charges against the beleaguered Talvivaara mining company saw their case crumble as the Kainuu district court lightened charges in the case from aggravated environmental crime to a lesser charge of environmental degradation. Prosecutors had been calling for suspended prison sentences as well as hefty fines in the case.

The court ordered incumbent Talvivaara CEO Pekka Perä to pay fines equivalent to 90 days’ pay or 20,340 euros, while former chief executive Harri Natunen had to pay a 60-day fine amounting to 7,740 euros and mining operations director Lassi Lammasaari also received a 60-day fine totaling 6,540 euros. They were found guilty of a lighter charge of degradation.

A fourth defendant in the case, division chief Ville Heikkinen, had all charges against him dismissed.

Talvivaara Sotkamo Ltd, the parent company’s mining subsidiary located in Sotkamo, eastern Finland, was ordered to hand over 3.5 million euros to the state for the financial gain it earned from its activities. The court also ruled that it should pay a fine of 300,000 euros, a sum that was smaller than prosecutors demanded.

Administrator: Talvivaara Sotkamo can't pay up

Following the verdict, Jari Salminen, administrator of Talvivaara Sotkamo’s bankruptcy estate said that the mine can’t afford to pay the fine or the 3.5 million compensation order. Salminen also noted that the corporate fine affected Talvivaara Sotkamo Ltd, and not the bankruptcy estate.

Perä, ex-chief executive Natunen and mine director Lassi Lammasaari were also ordered to compensate the state for evidentiary costs, while Perä and Natunen were ordered to pay legal expenses incurred in the trial.

The court found that operators at the Sotkamo mine had neglected to determine the impact of caustic soda on the facility’s waste water. In addition it ruled that the company had not updated information about the chemicals it used in its operations. As a result, the court said an environmental permit application providing information on sodium and sulphates used was fundamentally inaccurate.

According to the court’s ruling, Pekka Perä had not exercised due care to ensure that the company understood and investigated the impact of using sodium in its water waste. It said that gross negligence on Perä’s part had resulted in the release of harmful and elevated amounts of sulphates and sodium into waterways downstream of the mine. It noted that this occurred without the required environmental permit in December 2009 and at latest in January 2010.

The court also based its ruling on the premise that although the liquid effluent contaminated the environment it did not cause concrete danger or detrimental health effects. Only a gypsum waste pond leak in November 2012 was shown to have leaked significant amounts into waterways near the mine.

Hundreds of millions spent on Talvivaara bailout

Taxpayers have already footed the 200 million euro used to set up a successor firm – Terrafame - to manage the site, but that company is itself already running out of cash. Government is said to be considering forking out more cash to keep the operation running. In effect, any attempt to pay the court-ordered sums would also come from public coffers.

The trial was the first of its scale in Finland and was also exceptional in that two prosecutors worked on the case. The pre-trial investigation alone took two years and eventually amounted to four-thousand pages.

The men at the centre of the trial had consistently denied all of the charges.

This chapter of the Talvivaara tragedy is not likely to end here, however. Neither prosecutor nor defendants got what they wanted from these proceedings--and both could appeal to a higher court.

Finnish miner Talvivaara says close to bankruptcy


3 June 2016

HELSINKI – Finland's Talvivaara Mining Company said on Friday it may face bankruptcy following the Finnish government's decision to pull back from a deal relating to a troubled nickel mine in northern Finland.

Talvivaara is the former owner of the mine which leaked waste water in 2012 and faced serious production problems, prompting the government to take control of it last year in a bid to protect local jobs and the environment.

State-owned Terrafame Mining Company, which currently runs the mine, said on Friday it would back out of a preliminary deal which would have helped step up Talvivaara's debt restructuring.

It also demanded Talvivaara immediately pay it 12.8-million euros ($14.3 million) of receivables. "There is a significant risk that Terrafame's demands endanger the continuance of the company's corporate restructuring proceedings and may lead to the bankruptcy of the company,"

Talvivaara said. Talvivaara deputy CEO Pekka Erkinheimo told Reuters last month the company has been looking to return to business with new mining projects.

Talvivaara listed in London in 2007 with the aim of becoming Europe's biggest nickel mine by pioneering a process of using bacteria to extract nickel. But production problems were compounded when the mine leaked waste water, raising the level of uranium and other metals in nearby lakes and rivers.

The government last month started preparations for closing down the loss-making mine in the absence of new investors, putting about 950 jobs at the site at risk.

Talvivaara has about 80 000 Finnish shareholders and its shares have been suspended from trading since 2014.

"The situation has looked bad for the company for a long time, but this sounds like its story is close to an end. A bankruptcy would of course mean that shareholders will lose their investments for good," said Timo Rothovius, chairman of the Finnish Shareholders' Association.


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