464 Outokumpu Oy This is Finland's largest mining and metals group with eight marketing companies in Finland and five abroad. Eight mines were in production in 1983, producing copper, zinc, nickel, cobalt, precious metals, pyrite and lead (1).
In the late '70s the company began searching for uranium on Saami land near Kittila (2).
It also secured a 9.2% stake in the Trout Lake copper-zinc mine at Flin Flon, Manitoba, Canada-which it sold in 1989 (33) - and 39% in the La Plata copper-zinc mine near Quito, Ecuador (3).
In 1983 the company adopted its famous "flash smelting" process to treat lead sulphide ores removing lead, liquidising some S02 and, according to the company, minimising thereby releases of sulphur dioxide and lead to the atmosphere (4). It has been engaged on tests of this process on ore from the Olympic Dam deposit in South Australia (see WMC). Tests were being conducted in summer 1984 which involved separating uranium from ore in Finland and returning it to Australia for experimental processing (5).
Between 1984 and 1990, Outokumpu developed into the world's second largest producer of semi-finished copper and copper alloys (6) and the world's leading supplier of smelter technology (7).
Arguably, it also became the first truly "modern" mining and metallurgical company: among the first to negotiate a debt-equity swap (under which it took 15% interest in an oxide treatment plant at Antofagasta plc's Lince mine in northern Chile) (8); at the forefront of those companies offering, not only capital investment, but also pollution control technology to "the eastern bloc" - in particular the Soviet Union's ravaged Kola peninsula (9), but also the Karelia region in that country (10), Mongolia (11), and the southern Urals; and a leader in offering shares (25%) in its own capital to its employees (13).
During the 1980s Outokumpu "came to a strategic turning point" as domestic supplies for its own copper, zinc and nickel smelters looked like running dangerously low (13) . It "set out to supply most of the raw material requirements" for these plants and, where necessary, to become self-sufficient in them.
In 1988 it reorganised itself with the formation of ORI (Outokumpu Resources Inc) which now takes control of all the company's operations outside Scandinavia. By this time it had more than 120 international subsidiary operations in more than 30 countries (14). The following year it produced nearly 10 million tonnes of ore, and had projects not only in Finland (mostly on Saami land) but also in Sweden, Norway, Canada, Mexico, Chile, Australia and Ireland.
That year the Finnish government permitted the company to sell up to 49% of its state holding, with foreign ownership allowed up to 20% (15).
Among its important projects, Outokumpu operates a gold mine in the Saami region - it was the first new Finnish mine "in years" (16); it has a JV with Hudson Bay Mining Co at Namew Lake (17); it purchased the important American Brass copper company in 1990 (18); and it has a large modernisation project with the Zairean state copper company Gecamines (19).
The company's expanding interests in Chile, where it is one of the most important foreign investors (20), its forays into Australia, and its recent problems in Ireland, suggest that Outokumpu, at root, is not much different from other majors in the field.
In Australia, the company has interests in the Thalanga base metals mine in Queensland, which was opened in 1990 (21), and a 55% interest in the Forrestania nickel exploration project (22). But it is the JV with Australian Consolidated Minerals Ltd (ACM) at Mt Keith which is its major venture on that continent. Due to problems with financing and the nature of the ore, it took well over a year before ACM and Outokumpu could announce that they were proceeding with the mine (23).
Outokumpu's involvement in Ireland has mounted over the past few years. It bought 75% of Tara Mines in 1986 - despite the fact that the mine had "done battle over the years with both environmentalists and the various mining trade unions" (24). By the end of 1990, the Finnish company held 21.7% of Ivernia West (which itself has interests in all Chevron's Irish resources, a talc deposit in County Mayo, and 50% in the Double A gold mine in Australia) (25). It also sealed a deal with Conroy Petroleum, to develop its Galmoy lead-zinc find in County Kilkenny (26).
Tara has become a mine with which to charm away the sceptics (27) and Outokumpu has been doing very nicely out of the operation, thanks to using a tax haven in Dublin called the Custom House Dock Financial Services Centre (which offers a flat 10% tax rate - now there's the luck of the Irish for you!) (28).
But Outokumpu has not fared so well in selling its intentions over the Croagh Patrick gold deposit - which it took control of in 1990 when it bought up 10% of the project's other 50% owner, Burmin Exploration PLC (29). Opposition to mining the holy mountain of Croagh Patrick -where Ireland's patron saint was said to have spent 40 days of contemplation reached such a pitch in 1990, that the Irish Minister for Energy withdrew the exploration licence on religious grounds (30). This blow to the company was later compounded when County Mayo's council put a ban on mining operations in some 300 square miles, which included claims lodged by Tara, Burmin and Ivernia (30).
It is worth adding that Outokumpu is now building a smelter in Portugal to take copper concentrates from RTZ's 49% Neves Corvo mine (31); the company was the subject of outrage from Finnish students and trade unionists, in 1988, when it proposed taking a stake in the RTZ/BHP Escondida mine, in order to supply its own Harjavalta smelter (32).
Contact: Minewatch Ireland, Dun Sidh, Moneen, Louisburgh, Co Mayo, Ireland.
Further reading: For a self-adulatory history of the company: Markku Kuisma, A History of Outokumpu (Gummerus Kirjapaino Oy) Jyvaskla, 1989.
SOURCE: "The Gulliver File - Mines, people and land: a global battleground" by Roger Moody.
Published in 1992 by Minewatch, 218 Liverpool Road, London Nl ILE, UK, and WISE-Glen Aplin, Po Box 87, Glen Aplin Q 4381, Australia.
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