Swedish industrialists buy iron ore plant from bankrupt Northland
A group of Swedish industrialists including the chairman of BP have bought key assets from bankrupt miner Northland Resources, law firm Advokatbyrån Kaiding said on Wednesday July 15.
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The purchased assets include the Kaunisvaara processing plant in northern Sweden – including all equipment inside the concentrator such as the first processing line and related transformers, control systems and pumps – as well as 134 railway wagons used for transporting the iron ore to the port of Narvik in northern Norway.
The purchase price for the assets was SKr50 million ($5.9 million), a spokesman for the industrialists told Steel First on Wednesday.
Carl Henric Svanberg, chairman of oil and gas major BP and of car manufacturer Volvo, is among the group which acquired the assets, through buyer company Abecede.
The other industrialists involved in the purchase are: Mats Paulsson, principal owner of construction company Peab, one of Northland’s key suppliers; Bert Nordberg, chairman of Danish wind turbine producer Vestas Wind Systems; Erik Selin, ceo and principal owner of property company Fastighets AB Balder; and Bruce Grant, principal owner and executive chairman of management consulting firm Applied Value Group.
“I and the buyer are satisfied and pleased that [this] maintains a possibility for a restart of the processing plant and the mine,” Hans Andersson, bankruptcy trustee and lawyer at Kaiding, said.
“It can provide opportunities for hundreds of new jobs and a positive development of the basic industry in the region,” he added.
The bankruptcy estates are still owners of all properties, usage rights, environmental permits, mining concessions, etc, that are associated with the maintenance and possession of mining and environmental permits. They will also continue to be responsible for operations in Kaunisvaara.
“However, there is a clear declaration of intent from the buyer, through this transaction, to create a deadline that allows the buyer and the bankruptcy estates to find a long-term solution for the mine in Kaunisvaara together with several important parties,” the law firm said.
The initial timeline for finding a long-term solution is six months. The process will require co-operation from the government and the local municipality, the industrialists’ spokesman said.
Separately, Northland’s terminal in the port of Narvik has been sold to the port authority for SKr5.7 million ($670,000), although its construction cost SKr328 million ($39 million), according to various local media reports earlier this week.
Finnish company Hannukainen Mining bought Northland’s Hannukainen iron ore deposit in May, while the Swedish operations were expected to be sold before the start of the summer holidays.
Northland filed for bankruptcy in December last year after two years spent operating amid financial difficulties prompted by overrun costs revealed in January 2013.
The 2 million-tpy Kaunisvaara iron ore concentrate project in northern Sweden was idled in October, as the company’s funding crisis escalated with the dramatic drop in iron ore prices.