Finnish Minerals Group: A decade of increasing value for Finland and Europe
In the 2010s, the Finnish state established a special-purpose company to build a new, growth-creating industrial sector for Finland. Thanks to this far-sighted decision, a developing critical materials value chain and world-class production facilities have emerged in Finland.
In 2015, the situation at the Talvivaara mine was bleak. The mine had suffered serious environmental challenges for years, and the company operating it was eventually declared bankrupt.
At that point, the Finnish state rolled up its sleeves. To resolve the issue, Terrafame Group Ltd was established, and its subsidiary, Terrafame, purchased the business of the bankrupt’s estate in 2015.
“The starting point was extremely challenging. The state set Terrafame clear objectives to stabilise the environmental situation at the Sotkamo mine and to ramp up profitable production,” says Matti Hietanen, CEO of Finnish Minerals Group.
Determined work yielded results, and by 2017, the new company had stabilised the mine’s situation.
At the same time, it was clear that the electrification of transport was underway. It was predicted that emissions reduction targets and consumer desires would prompt car manufacturers to seek more environmentally friendly solutions.
The rise of new technologies highlighted new material needs. The idea emerged: could Finland meet these material needs and, at the same time, build a new export industry?
From rescuing a mine to building a new industrial sector
Once the challenges affecting the Sotkamo mine had been addressed, the government assigned Terrafame Group a broader mission. The company, commissioned by the state, began developing a comprehensive battery value chain in Finland, from mining industry towards end products of high technological expertise.
At the same time, Terrafame Group changed its name to Suomen Malmijalostus Oy in 2018 and adopted Finnish Minerals Group as its auxiliary business name.
Looking back in 2025, it is evident that the state has made a series of successful and far-sighted decisions.
Terrafame has evolved from a producer of intermediate products into a globally significant producer of battery chemicals. Its impact on the gross domestic product of the Kainuu region is estimated at 20 per cent.
This transformation is unparalleled in Finnish industrial history.
“Terrafame serves as the foundation for building the entire Finnish battery production value chain. Thanks to the company, we have been able to purposefully develop several projects across the value chain, each with significant economic and employment impacts,” Hietanen explains.
When minerals became strategic – the new global situation revolutionized the company’s importance
Since 2015, the world has also changed in ways that could not have been foreseen in the last decade.
In addition to the electrification of transport, the increased geopolitical tensions and disruptions to global trade in the 2020s have further increased the need to produce critical raw materials locally. As a result, the EU has paid increasing attention to developing the production of critical materials in the 2020s.
At the turn of the 2020s, the EU also set itself increasingly ambitious green transition targets. Their implementation is ongoing, and achieving the targets requires the electrification of transport.
“The strategic importance of our sector has grown year by year,” Hietanen describes. "It’s not just about jobs and economic impacts, but also about a clean transition and European strategic autonomy. In addition, recent events have highlighted the importance of critical minerals for the defence industry,” he points out.
In March 2025, Keliber’s lithium project and Terrafame’s Kolmisoppi deposit were granted strategic project status by the European Commission.
Production of new export products employs hundreds and brings significant tax revenues
The development of Terrafame has continued since its early years. In 2021, the company launched battery chemical production, and in 2024, a uranium production facility. This year, the its Kolmisoppi project received strategic project status from the EU Commission under the Critical Raw Materials Act.
Other projects are also underway.
Finnish Minerals Gorup’s associated company, Keliber, will begin mining and lithium processing in Central Ostrobothnia next year. Construction work on the cathode active material plant in Kotka will begin in April 2025.
In 2020, responsibility for developing the Sokli mining project in Eastern Lapland was transferred to Finnish Minerals Group. Studies assessing the area’s mineral resources and the profitability of the business are currently ongoing.
“In ten years, we have come a long way, but projects of this scale are complex and take time. There have been setbacks too,” Hietanen notes.
Each project reaching the finish line has significant economic impacts. For example, the Kotka plant will directly employ 270 people during operation and generate an estimated EUR 184 million in annual tax revenues. The operation will also generate significant multiplier effects, and the plant has the potential for further capacity expansion in the future.
Society benefits from a state-owned developer
Finland has gained attention in Europe for its effectively progressing project development and materials chain built with determination. As the EU accelerates the development of the critical sector, member states are engaged in increasingly fierce competition for battery value chain investments – some also with the help of state aid.
A small country like Finland cannot compete with large member states in terms of the scale of state aid.
“In Finnish Minerals Group’s operating model, the state is involved in project financing on commercial terms. It is a smart way to attract beneficial investments to Finland in the current operating environment,” Hietanen explains.
Since then, several other countries, such as France, Germany and Italy, have built operating models for commercial financing similar to Finnish Minerals Group to promote investments in critical raw materials and their processing in a way that is profitable for the taxpayer.
“There are clear shortcomings in the production of minerals in the European market. However, the sector requires large investments, and there are practically no entities in Finland to implement them. In this situation, a state-owned developer is an effective accelerator of investments,” Hietanen says.
“At the same time, it’s clear that domestic ownership is desired for the sector. Our model increases the acceptability of projects.”
In the next ten years, material needs will continue to grow. Even developing recycling solutions will not be enough to meet the emerging needs in the coming decades.
“The next ten years are crucial for European strategic autonomy, and the pace of development is accelerating even further. In Finland, we have started building a materials value chain in good time and are in a strong position now as the EU has also focused its attention on the sector,” Hietanen says.
“Finland must act smartly so that we can leverage our opportunities and attract high-tech investments. This is where Finnish Minerals Group will play a key role in the future as well.”
CEO Matti Hietanen