Universitetstryckeriet, Luleå

Luleå University of TechnologyDepartment of Human Work Sciences

2008

A baseline study of socio-economic effects of Northland Resources ore establishment in northern Sweden and Finland

Local trade and industry in Pajala and Kolari

Lena Rantakyrö

A baseline study of socio-economic effects of Northland Resources ore establishment in northern Sweden and Finland

Local trade and industry in Pajala and Kolari

Lena Rantakyrö Department of Human Work Sciences Luleå University of Technology

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Summary This report gives a description of the local trade and industry in the municipalities of Pajala in Sweden and Kolari in Finland. The description of the local trade and industry concerns structure, relating and supporting industries especially to the mine industry.

The study shows that there is a diversified local trade and industry in the municipalities of Pajala and Kolari. In both municipalities there are service companies offering service and goods that ordinary people need for their living.

Tourism is a significant business in especially Kolari municipality, especially in the Ylläs area, while Pajala has a more diversified business structure where forestry and manufacturing stands for a large part of the local business.

The two municipalities cooperate in several joint projects concerning local and regional development. The latest project started in March 2008, a vision of one common community across the border.

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Table of Content Table of Content......................................................................................................................... 5 1. Introduction ............................................................................................................................ 7 2. Extent and Delimitations........................................................................................................ 7 3. Methods.................................................................................................................................. 7 4. Results .................................................................................................................................... 7

4.1 Local trade and industry in Pajala .................................................................................... 7 4.2 Local trade and industry in Kolari.................................................................................... 8 4.3 Commerce and Private Service in Pajala ......................................................................... 9 4.4 Commerce and Private Service in Kolari ......................................................................... 9 4.5 Tourism in Pajala ........................................................................................................... 10 4.6 Tourism in Kolari ........................................................................................................... 10 4.8 Mine related industries in Kolari.................................................................................... 11

5. Cooperation between Pajala and Kolari ............................................................................... 12 6. Conclusions .......................................................................................................................... 12 7. Key Indicators ...................................................................................................................... 13 8. Stakeholders ......................................................................................................................... 13 References ................................................................................................................................ 13 Appendix 1 .............................................................................................................................. 15 Table 1: Businesses in Pajala, 2006 ........................................................................................... 8 Table 2: Businesses in Kolari, 2006........................................................................................... 9

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1. Introduction This report gives a description of the local trade and industry in the municipalities of Pajala in Sweden and Kolari in Finland. The description of the local trade and industry concerns structure, relating and supporting industries especially to the mine industry. The study is a sub-project within a socio-economic baseline study accomplished on request of Northland Exploration Finland OY. The sub-project was carried out by Assistant professor Lena Rantakyrö.

2. Extent and Delimitations The geographic delimitation in this study is Pajala municipality in Sweden and Kolari municipality in Finland (see Appendix 1). The study is only outlining the current conditions and do not take into consideration plans for the future or give any suggestions or recommendations.

3. Methods Facts and figures are collected from information on the Internet. Supplementary details were collected by interviews with representatives for the municipalities, representatives for Pajala Utveckling AB and Tuomas Qvist, Hotel Ylläshumina.

4. Results First in this section is the local trade and industry in Pajala and Kolari outlined, followed by a presentation of commerce and private service, tourism and finally the mine related industry in each of the two municipalities. Mine related industry refers to businesses within trades that are supposed to be subcontractors in the mining industry such as transportation, construction, machine shops and so on.

4.1 Local trade and industry in Pajala On October 31st 2006, 264 privately held businesses were registered in Pajala municipality “Business Register”. Most of the businesses are self-employed (166) and micro-businesses with less than 5 employees. Ten businesses have 5-10 employees, one has 15-20 and, two have about 30 employees. The largest business is a saw mill with 40 employees (www.pajala.se). The largest line of business in Pajala municipality is the public sector including health, social care and education. Pajala municipality and Norrbotten County Council employ about 44 % of the labor. The largest line of business within the private sector is forestry and farming and, related industry such as saw mills and wood manufacturers.

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Most of the 264 companies are located in Pajala village (157 companies) and in the larger villages in the rural district. 27 companies are located in Tärndö, 24 companies in Junosuando, 20 in Korpilombolo and 16 companies in Kangos (for location of the villages, see Appendix 1). Rest of the companies are located in several smaller villages in Pajala municipality (http://www.palaja.se) The table below shows privately held businesses in Pajala municipality classified by industry 2006, based on Pajala Utveckling AB, “Business register”. Table 1: Businesses in Pajala, 2006

Industry

Number of companies

Activity, tourism 16 Administration 3 Agriculture and forestry 28 Commerce 36 Construction 10 Consultants 10 Culture and art 6 Education 2 Electricity, water and sewage 13 Food industry 6 Ground preparation 4 Handicraft 10 Health 6 Hotels and restaurants 11 Manufacturing industry 27 Private service 21 Real estate 1 Timber industry and carpentry shops 14 Transportation 26 Other industry and unclassified 14

4.2 Local trade and industry in Kolari According to Statistics Finland there were 347 companies in Kolari in 2006. Almost a fifth of them (19%) were hotels and restaurants, which indicates the significance of the tourism for the municipality. In 2006 there were 46 retail trade units in Kolari employing 116 persons (http://www.stat.fi). The table below shows companies in Kolari, classified by industry 2006 (http://www.stat.fi).

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Table 2: Businesses in Kolari, 2006

Industry

Number of companies

Agriculture, hunting and forestry 5 Construction 49 Electricity, gas and water supply 1 Financial intermediation 1 Health and social work 7 Hotels and restaurants 67 Industry unknown 3 Manufacturing 26 Mining and quarrying 2 Other community, social and personal service activities

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Real estate, renting and business activities 61 Transport, storage and communication 48 Wholesale and retail trade; repair of vehicles, motorcycles, personal and household goods

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The classification of companies differs between Finland and Sweden. Nonetheless, the lists above give an idea of the diversity of local trade and industry. The lists show the relative importance of tourism in the Kolari area (Ylläs area) with 67 hotels and restaurants and 61 real estate and renting companies in comparison to Pajala municipality with 11 hotels and restaurants and only one real estate company. Among the 16 companies in Pajala municipality classified as “Activity, tourism” there is one company working with tourism activities and also renting out cottages for tourists.

4.3 Commerce and Private Service in Pajala The commerce and private service in both Pajala and Kolari are diversified and cover most of the day-to-day needs for ordinary people. Most of the shops in Pajala municipality are located in Pajala village, where you can find retail shops providing paint, construction equipment, flowers, apparels, sports equipment and so on. There is also a liquor store, pharmacy, two banks and postal service. Grocery stores are located in Pajala and in the larger villages in the rural district (http://www.pajala.se). There are eight companies providing passenger services including five taxi and three coach companies. (http://www.pajala.se). Pajala-Ylläs Airport with connection to Luleå twice a day is located about 12 km from Pajala village (http://www.pajalaturism.bd.se). Pajala has also bus connections with Luleå and Gällivare on daily basis (http://www.ltnbd.se).

4.4 Commerce and Private Service in Kolari In the centre of Kolari there are various kinds of shops: book store, car part shop, undertaker’s office, liquor store, pharmacy and post office. The grocery stores are located in the centre of

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Kolari and in the villages of Ylläsjärvi and Äkäslompolo (location of the villages, see Appendix 1). Alongside with Kolari’s centre, various shops are located near Ylläs in the villages of Ylläsjärvi and Äkäslompolo. The shops in Ylläs area are more concentrated on tourism, but there are also basic services such as post office (http://www.yllaksenmatkailu.fi). There are daily flights from Helsinki to Kittilä airport, about 75 km from Kolari, 40 km from Ylläsjärvi and 55 km from Äkäslompolo. Pajala-Ylläs airport is about 35 km from Kolari (http://www.yllaksenmatkailu.fi). Kolari has daily train connection with the main cities in the southern part of Finland (http://www.vr.fi) and daily bus connections to Rovaniemi, Kemi, Tornio and Oulu (http://www.matkahuolto.fi). There are 21 taxi and 5 bus companies in Kolari, most of them owned by private entrepreneurs (http://www.kolari.fi).

4.5 Tourism in Pajala Tourism is an important business in Pajala and the neighboring rural districts and there are several companies specialized on adventure tourism. Three different companies located in Pajala village are offering traveling and tourism arrangements. There are also several camps and rental accommodations located in Jarhois, Junosuando, Kangos, Khilanki, Kitkiöjärvi, Muonionlusta, Ohtanajärvi, Peräjävaara and Pajala villages (for location of villages, see Appendix 1). Some are specialized on fishing and hunting tourism, some on hiking and skiing and several of them also offer cabins for rent (http://www.pajalaturism.bd.se). Two hotels and a youth hostel are located in Pajala village. One of the hotels has conference facilities. There is a camping ground for trailers also offering cabins and rooms for rent. Tourism in Pajala is mainly related to nature experiences such as fishing, hunting and hiking. One of the largest natural bifurcations in the world is found in Tärendö River. A natural bifurcation is a connection between two different river systems with no natural marked watershed. A bifurcation appears when a river branches off and creates a new stream that falls into another river. Some kilometers north of Junosuando, the Torne River branches off and about 56% of the river’s water is led into a new stream, Tärendö River. After about 52 kilometers, the Tärendö River falls into the Kalix River and thereby connects two different river systems, Torneå River and Kalix River (Puro-Tahvanainen et al., 2001). There are several rapids in Torne River and Kalix River known for good fishing. Jupukka nature reserve area is another nature experience within Pajala municipality. Jupukka is on Unesco’s list of World Heritage. The Jupukka area is about 205 acres and located north of Torne River, close to Erkheikki village about 10 kilometers northwest of Pajala (Wennström, 2004; Länsstyrelsen i Norrbottens län, 2007). Pajala municipality has also restored old ironworks foundry from the iron industry epoch that started in the 1600s and lasted to the late 1800s. These historical sights have become popular tourist attractions. (http://www.pajalaturism.bd.se)

4.6 Tourism in Kolari Tourism is a significant industry for Kolari. Almost every fifth (19%) company is a hotel or a restaurant. There are nine hotels in Kolari, a majority of them are located close to the skiing center of Ylläs. Tourism is active during every season of the year, but the main season is winter. The number of accommodation facilities is growing rapidly. The central rental agency offers about 350 cottages, but the number of total rentable cottages in the area is substantially higher (http://www.yllaksenmatkailu.fi; www.yllas.fi).

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Ylläs area consist of seven fells and the skiing center combined with several different activities such as spa, snow mobile riding, cross country skiing, reindeer- and husky safaris, snow shoes hiking, horseback riding, fishing, hiking, trekking, canoeing and so on. Nature is the most important attraction factor in the area. Ylläs is surrounded by the Pallas-Yllästunturi National Park. In Kolari there are several private accommodation rentals, which rent mainly cottages for tourists (http://www.yllaksenmatkailu.fi). 4.7 Mine related industry in Pajala Mine related industry refers to businesses that operate within trades that are assumed to be important subcontractors or service for the mining industry such as transportation, construction, machine shops and so on. There are a number of companies in Pajala village and the rural district of Pajala that can be assumed to be important for a mining industry either during the construction phase or later in the production phase. One forestry company is specialized on not only lumbering but also excavation. There are also two companies within the construction business specialized on excavation and ground preparation. There are 14 haulage contractors in Pajala rural district. One of the haulage contractors is specialized on non-polluting freights. Two of them are, except haulage, specialized on digging and excavation and one has equipment such as a crushing mill, grinding and grading machinery for gravel pit work. (http://www.pajala.se). At least two machine shops in Pajala are doing service, repairing and welding, on machinery and industrial equipment. There are also five garages of which one is specialized on automobile electronics. About ten construction contractors are located in Pajala rural district. (http://www.pajala.se). Representatives of Pajala Utveckling AB, the local development company owned by the municipality and the local industry, were interviewed about the current local businesses and their capacity. According to Pajala Utveckling AB, most of the companies within the construction industry are too small, with insufficient capacity to be sole constructor in construction of a mine such as roads, plants and other buildings. Therefore they assume that the construction work will be done by other than local companies. There are several haulage companies in the municipality but according to Pajala Utveckling AB, none of them has probably the capacity to supply a mine’s needs of transportation. There is one company in Pajala with skills to carry out welding and repairing jobs on large parts or machines, but their facilities are not large enough to take in larger parts or objects. Several companies from other parts of the region have been in contact with Pajala Utveckling AB to find out possibilities for establishing businesses in Pajala in view of opening of the mine. According to Pajala Utveckling AB there are industrial parks and facilities available in Pajala village.

4.8 Mine related industries in Kolari According to Statistics Finland (http://www.stat.fi) there were 2 mining and quarrying companies in Kolari 2006. One was classified to “Mining of coal and lignite; extraction of peat” and the other one was classified as “Other mining and quarrying”. In Kolari there are several companies which are related to mining industry. There is for example one company classified as “Manufacture of other non-metallic mineral products”, one as “Manufacture of basic metals and fabricated metal products” and one as “Manufacture of machinery and

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equipment n.e.c.”. Related to the construction phase of the mining area it is notable that there are 49 construction companies.

5. Cooperation between Pajala and Kolari There have been several ongoing or finished EU funding joint projects in the municipality of Kolari and Pajala for example the project “Askel Steget” – the step towards full participation, tourism as part of an open service network. The aim of this project is to develop the supply of service and products for tourism in the Ylläs-Pajala area (http://www.pajala.se; http://www.kolari.fi). Another example is the project “Meän Väylä” (Älvlandet) in cooperation between the municipalities of Pajala, Kolari and Muonio funded by EU. The purpose of the project is to develop the cooperation between the municipalities, to create a common strategy to survive and develop and to harmonize the land use along the bank of the border river (http://www.pajala.se). “Gröna jobb i Tornedalen” is an environmental project were the partners are the County of Administrative Board of Norrbotten, The Swedish Forest Agency, The Swedish Public Employment Service, Lapin Ympäristökeskus (Lapland Regional Environment Centre), Lapin TE-keskus, Regional Council of Lapland and the municipalities of Enontekiö, Muonio, Kolari, Pello, Tornio, Pajala, Övertorneå and Haparanda. The lead partner is Lapin Ympäristökeskus. The objective of the project is to improve the significance of tourist industry in the area of building things such as theme trails, birdwatching towers, boat launch areas and maintained campfire sites on both sides of the border. The key words of the project are: cross-border cooperation, competitive tendering and education. The total employment effect is 287 man-hours per month. The best known feature being built is the Laestadius trail in Kolari. Along the trail the occasional traveller hiking from Sieppijärvi to Lappea can spot many of the botanical achievements of the 19th century revivalist preacher. The project started in fall 2004 and was completed in summer 2007 (http://www.gronajobbitornedalen.com). A newly started project is the “Meänmaa projekti” (meän maa can be interpreted our land). The municipalities of Kolari and Pajala are planning a joint development project concerning not only cooperation but a unification of the two municipalities, reports the local newspaper NSD on March 4th 2008. Funding for the project is applied from EU. The two municipalities have formed a common working team under political management. The vision is to develop a common municipality by the year of 2020. The two municipalities held a common municipal executive board meeting in Kolari on March 3rd 2008. The project Meänmaa covers different municipal areas such as culture, education, employment, infrastructure and planning of society (http://www.nsd.se).

6. Conclusions

The study shows that there is a diversified local trade and industry in the municipalities of Pajala and Kolari. In both municipalities there are service companies offering service and goods that ordinary people need for their living.

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Tourism is a significant business in especially Kolari municipality, especially in the Ylläs area, while Pajala has a more diversified business structure where forestry and manufacturing stands for a large part of the local business.

There are only a few industries in both municipalities, mostly construction companies, machine shops and haulages that might be able to provide service to mining industry.

The two municipalities cooperate in several joint projects concerning local and regional development. The latest project started in March 2008, a vision of one common community across the border.

7. Key Indicators New start ups differentiated into sector. Number of new employees in the municipality differentiated into sector. Change in number of employees over time in each of the municipalities.

8. Stakeholders Pajala municipality, 984 85 Pajala, Sweden. Phone: +46 978-120 00, Fax: +46 978-120 20 kommun@pajala.se, www.pajala.se Kolari municipality, Isonpalontie 2, 95900 Kolari, Finland. Phone +358 16 519 111, Fax: +358 16 561 924, www.kolari.fi Swedish Public Employment Service in Pajala. Box 83, 984 22 Pajala. Phone: +46 978 75820 www.ams.se

Employment Office (Tunturi-Lapin työvoimatoimisto), PL 75, 95900 Kolari. Puhelin 010 19 4090 ja 010 60 46922. Telefax 010 60 46929. www.mol.fi

Pajala Utveckling AB, Kengisgatan 8, 984 31 Pajala. Phone: +46 978-747 90. Fax: +46 978-120 21.

Local businesses in Pajala and Kolari municipalities.

References Printed sources Puro-Tahvanainen, Annukka; Viitala, Liisa; Lundvall, David; Brännström, Gunnar & Lundstedt Lisa (2001): Tornionjoki – vesistön tila ja kuormitus/Torne älv – tillstånd och belastning. Alueelliset ympäristöjulkaisut/Regionala publikationer 95. Lapin Ympäristökeskus/Länsstyrelsen i Norrbottens län, Rovaniemi. Länsstyrelsen i Norrbottens län (2007): Bevarandeplan Natura 2000. Jupukka SE0820231. Nr 511-4535-06. Fastställd av Länsstyelsen i Norrbottens län 2007-12-11.

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Wennström, Hans-Fredrik (2004): Struves gradmätning och meridianbåge som blivande världsarv in Kart & Bildteknik, 2004:1, Årgång 19, pp 8-9. Internet sources Pajala Utveckling AB. www.pajala.se Statistics Finland. http://www.stat.fiPajala Turism. http://www.pajalaturism.bd.seNorrbotten County Traffic Authority. http://www.ltnbd.se). Ylläs Travel Ltd. http://www.yllaksenmatkailu.fi). VR-Group Ltd. Finland. http://www.vr.fi) Oy Matkahoulto Ab. http://www.matkahuolto.fiKolari Municipality. http://www.kolari.fi. Ylläksen Matkailuyhdistys ry. www.yllas.fiGröna Jobb i Tornedalen. http://www.gronajobbitornedalen.comNorrländska Socialdemokraten. http://www.nsd.se

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Appendix 1

Map 1: Geographical area covered by the study.

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