NORWAY by Jozef Plachy 1

THE MINERAL INDUSTRY OF NORWAY By Jozef Plachy 1 While about 25% of Norway's gross national product about 45% of total exports, followed by metals (7.7%) and (GNP) is supplied by natural resource industries (including industrial minerals, mainly dimension stone. agriculture, fisheries and forestry), only a small amount (less than 1%) is contributed by the mineral industry. Readily Structure of the Mineral Industry available hydroelectric power and ice-free ports facilitated the growth of energy intensive industries, namely production Despite recent changes, the Norwegian Government's of aluminum, ferroalloys, magnesium, and silicon metal. involvement in the mineral industry remained relatively high, However, by far the largest mineral contribution to the GNP especially in offshore hydrocarbon production. The (about 17%) is by the hydrocarbon industry. Government, through the state-owned Den norske stats oljeselskap A/S (Statoil), continued to control all production Government Policies and Programs and refining. The rest of the mineral industry was dominated by Elkem A/S and Norsk Hydro A/S. Despite rejection of membership in the European Union Elkem A/S is one of the world's leading diversified (EU), Norway has continued to liberalize its mining law. metallurgical companies with a strong hydroelectric energy The Government refunded up to 50% of the cost of base and significant global presence through its 17 plants exploration drilling, and additional grants provided up to and 26 offices on 3 continents. Elkem is publicly owned 35% of the capital cost of developing certain minerals and company in which the largest investors, Orkla, specific areas (mainly north of Trondheim). Laws for Folketrygdfondet, and Saga Petroleum, were Norwegian. Its metallic ore mining were relatively simple. Mineral rights six divisions included Aluminium, Carbon/Materials, were obtained by filing claims and maintained by paying Energy, Ferrosilicon, Manganese/Chrome and Special small annual fees. In addition to a 28% corporate tax, there Metals, and Silicon Metal. Net income before taxes in 1994 were also municipal and county taxes ranging from 7.5% to was $42 million,2 more than double that of 1993. 13.5%. The Norwegian mining laws for industrial minerals Norsk Hydro A/S is Norway's largest publicly owned were more complicated and often overlapping. While most industrial concern in which the Norwegian Government's of the minerals were regulated by special mining laws, share in 1994 remained 51%, while private investors rose aggregates, sand, and gravel were subject to construction slightly, to 16.29%. Norsk Hydro's division and laws. subdivisions were grouped together in four segments, reflecting the company's core business areas: Agriculture Production (Industrial Chemicals and production of fertilizer/urea); Oil and Gas (Exploration/Production and Refining/Marketing); Production of metallic ores has fallen gradually for many Light Metals (Aluminium, Magnesium, and Energy); and years, as existing mines were being depleted and no major Petrochemicals. Net income in 1994 was $562 million, 30% new mines were replacing those being exhausted. This higher than in 1993. (See table 2.) decline of mineral output has been partially offset by increased production of industrial minerals. Results in the Commodity Review Norwegian metallurgical industry improved during 1994. (See table 1.) Metals Trade Aluminum.—Both Norwegian aluminum producers, Elkem and Norsk Hydro, benefited from the 65% price The Norwegian economy remained highly dependent on increase for primary metal during 1994 and from the foreign trade and more than one-half of the GDP was derived exemption of energy-intensive industries from a special from it. About 75% of the minerals consumed were electricity tax levied on other industries by the Norwegian imported. Commodity imports, which comprised 7.5% of Government. total imports, were dominated by alumina/bauxite, With an annual capacity of 650,000 metric tons (mt), apatite/phosphate, and potassium. Petroleum represented Norsk Hydro was the larger of the two primary aluminum 609 producers. Its aluminum division consisted of four wholly 1.5% zinc.4 owned and one partly owned smelters. The largest, with a 210,000 metric ton per year (mt/a) capacity, was in Karmoy, Ferromanganese.—The market for ferromanganese followed by smelters in Ardal (180,000 mt/a), Sunndalsora alloys was affected by growing competition, mainly from (140,000 mt/a), and Hoyanger (70,000 mt/a). The capacity China. It resulted in falling prices, particularly in the second of jointly owned Sor-Al in Husnes was 50,000 mt/a. Total half of 1994. Despite these difficulties, Norway's production production in 1994 was 618,000 mt, a 5% decline compared of ferromanganese increased by 10% to 248,648 mt in 1994, to 1993.3 According to Norsk Hydro, semimanufacturing according to Elkem's 1994 annual report. Elkem operated capacity was about 60% of primary metal production. Most three plants in Norway, two in the United States, and one in of the semis were in the form of extruded products (276,000 Australia. Elkem Mangan, a limited partnership in which mt), followed by rolled products (117,000 mt). According to Elkem owns 51% and Broken Hill Proprietary Company its 1994 annual report, about 624,000 mt, representing 52% Limited (BHP) of Australia owns 49%, operated of alumina requirements, was covered by affiliated alumina ferromanganese plants in Porsgrunn and Sauda. This refineries in Jamaica (Alpart) and Guinea (Friguia), in which partnership was established in 1993 to ensure a steady Norsk Hydro owned 35% and 10.2% interest, respectively. supply of manganese ore from BHP's Groote Eylandt Mine The remaining amount was secured through long-term in Australia. At the wholly owned Rana smelter, Elkem contracts linked to primary aluminum prices. The started up a second ferrochrome furnace, out of production installation of a continuous homogenizing facility at the since fall 1992, and has reportedly undertaken other major Sunndal smelter, which was to increase homogenizing renovations. capacity to 170,000 mt/a of extrusion ingots, was scheduled to be completed at the beginning of 1995. However, Ferrosilicon.—The Ferrosilicon Division of Elkem following the rejection of EU, expansion of the smelting underwent several changes in 1994. Ferrosilicon production capacity at the plant was reportedly put on hold. According at Elkem Ashtabula, of the United States, was reportedly to company officials, the Sunndal smelter has increased the closed down in April 1994 and was replaced by production remelting capacity to 143,000 mt/a, and plans to increase of calcium carbide. While production from furnace No. 1 at production of secondary aluminum from 12,000 mt in 1994 Elkem Thamshavn in Orkanger resumed in July 1994, the to 25,000 mt/a to 35,000 mt/a in the near future, still much furnace at Bjolvefossen was shut down in December due to less than the expanded capacity. With the addition of two high electric power prices. Despite this internal large melting furnaces and a new casting center, the restructuring, Elkem still produced about 40% of the Hoyanger casthouse's capacity will reportedly reach 100,000 ferrosilicon in western Europe and retained 25% of market mt/a and was expected to permit production of 9.5-meter (m) share. long sheet ingots. Elkem Aluminium ANS, a division of Elkem A/S, Ferrosilicomanganese.—The 1994 production at the operated two primary aluminum smelters in Farsund and Tinfos Jernverk-owned Oye Smelteverk at Kvinesdal Mosjoen, with a combined capacity of about 250,000 mt/a. amounted to about 130,000 mt in 1994, according to its According to the company's 1994 annual report, production annual report. The smelter utilized two 45-megavoltampere in 1994 totaled 239,000 mt of refined primary aluminum, a submerged arc furnaces using Soderberg-type electrodes. 19% increase from 1993. Both smelters were jointly owned The source of power was the local Sira-Kvina power by Elkem and Aluminum Company of America (Alcoa). stations, the largest hydroelectric power complex in Norway. Elkem Aluminium Lista has reportedly launched a major Company officals reported that the smelter used up to 0.5 program to modernize its Farsund plant. The $36 million Mmt of manganese ore, mainly from Australia, Brazil, investment is aimed at reducing air and water pollution, and Gabon, and South Africa. While the principal product was was scheduled to be completed by 1998. ferrosilicomanganese, the plant is reportedly capable of converting to production of high carbon ferromanganese in Copper.—In 1994, only two copper-containing sulfide short notice. mines were operating in Norway. The combined production of two adjacent Outokumpu mines at Royrvik and Gjersvik Iron Ore.—Norwegian iron ore mines, owned by A/S was reportedly about 0.6 million metric tons (Mmt) in 1994. Sydvaranger, Rana Gruber A/S, and Fosdalen Bergverk A/S, Production at Joma Mine at Royrvik, operated by Grong produced about 2.5 Mmt of iron ore concentrate in 1994, an Gruber, began in 1972. Mine officials reported that metal increase of 16% compared with 1993. content of the ore averaged 1.18% copper and 2.18% zinc. The largest producer, Sydvaranger, is in northern The Gjersvik Mine, opened in 1993, is 30 kilometers (km) Norway, near the Finnish border. Company-reported from Royrvik, near the Swedish border. Ore from both mines production in 1994 was about 4.2 Mmt of crude ore yielding was beneficiated at the 660,000 mt/a capacity concentrator about 1.5 Mmt iron pellets, most of which was exported to resulting in 7,400 mt of copper and 9,100 mt of zinc in Germany and the United Kingdom. A small amount, about concentrate, Outokumpu reported. The combined proven 70,000 mt, was converted into 72% iron concentrate for reserves amounted to 1.1 Mmt, graded 1.5% copper and 610 powder metallurgy.

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