Economic factors

The company chose the route via Narvik instead of using the Finnish port of Kemi because of cost, according to Swedish Newspaper Norrlänska Socialdemokraten. The shipments will reach China through the Northern Sea Route.

Christian Bonfils, managing director of Tschudi subsidiary Nordic Bulk, which will be transporting the iron-ore, estimates the journey is one third shorter than via the Suez Canal.

“This results in a significant reduction in fuel consumption and transportation time, and it also means much lower CO2 emissions. The fuel savings alone add up to approximately $180,000,” he said in a press release last month, when the Norwegian company announced it would be the first to send a non-Russian vessel on the route.

An additional advantage with Narvik is that bulk carriers can reach up to 300,000 dwt, five times more than the maximum capacity of Kemi, reports the BarentsObserver.

According to the shipping plan, the ore will first be transported from the Swedish Kaunisvaara mines near Pajala to Svappavaara by oversized Catepillar trucks, weighting 170 tons.

It will then be loaded onto the mining company LKAB’s trains, which will take it to the Narvik port.

Problems

However, infrastructure adjustments meeting the minimum requirements for heavyweight transportation from the Swedish-Finnish border to the port of Narvik will have to made first if the plan is to work.

Norrlänska Socialdemokraten reports Northland has already contacted Swedish authorities asking for an exemption from weight restrictions in order to drive the oversized trucks on ordinary traffic roads.

If the iron-ore ends up being transported by trucks to Svappavaara, then via rail onwards to Narvik, other railroad investments in the area will also be put on hold including the rail line from Kolari in Finland to Skibotn in Norway.

This would also affect projected railroad investments to connect to the Swedish network, as well as improvements on the Finnish side.

“All large-scale track improvement plans have now been suspended. The electrification of the railway track would have cost approximately EUR 50 million”, Director Kari Ruohonen from the Finnish Transport Agency told Helsingin Sanomat.

Northland hopes to begin production in the Swedish-Finish border mines by 2012, with adjacent shipments starting the year after.

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