The Swedish-Finnish railway bridge over Torne River in Haparanda/Tornio. The Swedish part is blue and the Finnish part is grey. Photo: Thomas Johansson Abstract North Finland and North Sweden are sparsely populated areas with rich natural resources, forests, nature as tourist industry and especially exploitable deposits. There are also plenty of activities supporting that industry in the area. Long transports pose a challenge. A driving force behind this study is the demand for raw materials on the world market and the rise in market prices which led the mining industry to invest in research in the region. This is combined with the need to regard national infrastructure development also in a European and international perspective. This study is concentrated on iron ore transports in Pajala-Kolari area because the mines, with a size comparable with the Swedish iron ore mine in Malmberget, cannot be opened without an efficient chain of logistics. The transports from and to the planned mines will also mean considerable changes to the transport patterns in the North. The mining activities will create up to 1800 new jobs in Sweden and Finland and the investments in the necessary infrastructure will add the job opportunities during the construction period. The cost benefits of the different alternatives of the whole chain of transport from mine to customer as well as the models of implementation suitable for major infrastructure construction projects, were evaluated and compared. In addition the socio-economical consequences of the mining operations and costs for the construction of infrastructure and transports were assessed. The result is thus based on several technical and economical sub-surveys made during this study as background studies. A number of possible combinations of railway, harbour and fairway solutions for the iron ore transports are studied. The conclusion is that Kemi harbour is needed in the first stage to enable mining operations. Necessary needs of infrastructure improvements must be decided this year. Further conditions for starting up mining activities should be considered in the ongoing planning processes in Sweden and Finland. According to socio-economic calculations the effects of mining activities with construction of relating roads, railways and fairways are significant. The first 3 million tonnes of iron ore/ year can be transported from Pajala mine to Kolari by trucks and on to Kemi by train during the year 2012. To ensure the cost-efficiency of the mine transport for larger volumes, up to 10 million tonnes/year, further infrastructure investments have to be made. They include a track to the Pajala mine area and upgrade of the track from Kolari to Kemi at least for 25 tonne axle load, 12 tonne metre load and 750 metre long trains including electrification and noise and vibration protection. They also include investments in the harbour and the fairway in and to Kemi. The total cost sum, used in the calculations for these investments, is 528 million euro which includes the rail connection Kolari-Kemi with 235 million euro. The big challenge is how the infrastructure required by mining activities is to be financed. Three different solution principles are sketched in the report. This study comprises also a survey of the transports between Finland and Sweden. Infrastructure of common interest is identified and a number of conclusions are drawn. A Swedish outlook on the Baltic States is also sketched. The most important conclusions for the study as a whole are summarised: Conclusions regarding transport corridors in the North in an EU-perspective General questions • The Bothnian Corridor is a joint Finnish –Swedish framework skirting the Gulf of Bothnia and connecting the Nordic Triangle with the Northern Axis and should be given priority as part of the TEN-T network. • The Bothnian corridor crosses the Finnish-Swedish border between Haparanda and Tornio. Improved capacity for this corridor means a need for improved ability also for the border crossing infrastructure. I Maritime questions • A general finding is that the sea traffic between Sweden and Finland is served in an adequate way by the harbours concerned. • The on-going icebreaking cooperation between Finland and Sweden can be further improved. • There may be a potential to coordinate the Finnish and Swedish fairway charges in order to promote increased sea traffic efficiency. • A joint ambition for Finland and Sweden for the ferry connection between Umeå and Vaasa is that it should develop into a viable business concern as a long-term component of the infrastructure (E12). • The on-going planning for the Horsten fairway should be followed through. Railway questions • Upgrade the bearing capacity of the existing railway bridge over Torne River to 25 t axle load and 12 t/m. • Improve the efficiency of the goods terminals in Tornio and Haparanda in view of expected future demands. • The Värta rail line should be kept until other transport alternatives are available. Road questions • Secure a uniform standard of E8/E4 regarding traffic safety and an even traffic flow. Public transport questions • A joint coach station for Haparanda and Tornio will improve public coach service across the border. Conclusions concerning the planned mines in Pajala and Kolari General questions • The iron ore deposits represent huge economic values and indicate major positive socio-economic development for a region burdened of a shrinking economy for decades. Instead of a possible continued development in the same vein, fulfilled mine plans means new job opportunities and an increasing population and growing local economy with possibilities to use existing social investments. • The first 3 million tonnes per/year can be transported in 2012 via road and the existing railway between Kolari and Kemi and via an upgraded Kemi Harbour. • The transports of phosphates from the planned mine in Sokli is not expected to have any influence on the choice of rail/harbour alternative for the iron ore transport. • Iron ore needs to be transported from the Swedish part of the planned new mining field to Kolari. The most efficient and environmental-friendly solution for this is by railway. The infrastructure around the mining field is a matter for the mining company but concerns the rail and road administrations in both countries. Close cooperation between all parties is necessary. • A land use reserve east of Tornio is proposed in order to retain future possibilities to re-route the railway and the road E8. II Maritime questions • In any eventuality, Kemi Harbour is needed in the fist phase to enable the mining operations. The economic analysis conducted in connection to this study indicates that in the second phase, up to 10 million tonne/year, all port alternatives Kemi, Kalix and Narvik alone or combined are possible and reasonable. However, according to the analysis, the Kemi harbour having the highest cost benefit ratio, appears to be a better alternative from a socio-economic perspective. • Transport routes using the harbours in Kokkola, Raahe, Oulu, Luleå or Skibotn mean considerably higher transport infrastructure investments and/or transport costs than the routes included in this study. The need for a harbour complementing Kemi in Kalix or in Narvik is dependent on the development of the planned mines and the development of the harbour in Kemi including the channel dredging to the harbour. This will mean added total investments in infrastructure of about 300 (Kalix) or 700 (Narvik) million euro. • Ice-breaking for the increased ore transport can be carried through without additional, new icebreakers when using smaller, ice classed bulk vessels during the winter season. Railway questions • It will be possible at the beginning of 2015 that a further upgrade of the Kemi-Kolari railway is carried out. • The planning processes for new infrastructure are time-consuming. In order to enable meeting future demands, pre-studies are proposed for possible rail connections for iron ore shipments from Kolari/Pajala to Kalix or Narvik. Road questions • Make the necessary road investments around the mining area. Conclusions especially regarding financing • The start-up time of the new mines is critical and motivates public support. However a viable business concern will create pay back possibilities. That motivates the use of risk-sharing models between the company and the states concerning financing of the needed infrastructure improvements. This study shows three different joint financing models. III Content 1. Introduction ............................................................................................................................ 3 1.1 The mission ...................................................................................................................... 3 1.2 How the tasks were carried out ........................................................................................ 3 1.3 Models for financing in Finland and Sweden .................................................................. 4 2. The EU-perspective on transport corridors in Finland and Northern Sweden....................... 6 2.1 General ............................................................................................................................. 6 2.2 Trans-European transport network (TEN-T).................................................................... 6 2.3 The Barents Euro-Arctic Region.....................................................................................