ARCTIC RAILWAY

Rovaniemi–Kirkenes

Arctic railway, preliminary study

– Part of the development of transport and logistics connections in the Arctic Corridor –strategy

– Goals• Estimate of impacts on employment, economic life and environment

• Estimate of the significance of using the railway in mining projects as well as regarding oil and gas investments in the Barents area and opening of the Northern Sea Route

• Preliminary estimate of the economic preconditions and alternatives of railway construction

• Promotion of the market value and interest in the Arctic railway connection

– Study period: November 2009 – February 2010

– Nord-Lapland Regionråd, Kirkenes Næringshage and Ministry of Employment and Economy participates in the financing of the work

– Consultants: Liidea Ltd & JT Con

NEW MINING PROJECTS IN LAPLAND

• AEM, Suurikuusikko, Kittilä (Au)

• First Quantum Minerals, Kevitsa(Ni, Cu)

• Lappland Goldminers Oy, Pahtavaara (Au)

• Northland Resources, Sahavaara, Tapuli, Pellivuoma, Hannukainen (Fe, Cu, Au)

• Yara, Sokli (P)

• Anglo American, Sodankylä?

ARCTIC CORRIDORThe EU’s most important link to the North

• The Arctic Corridor is an international corridor from Finland to Norway and Russia that facilitates the development of transport, energy management and livelihoods

• The Arctic Corridor links Finland and the Baltic Sea area to the deep-water harbours of the Arctic Sea, large production regions of the oil and gas industry and the western end of the Northern Sea Route

Existing railway network

– The railway network is notvery extensive in the North Calotte area: the railway net-work in Finland extends to Kolari in western Lapland and to Rovaniemi-Kemijärvi-Salla line in eastern Lapland; in Russia to Murmansk and Nikel

– Railway connection is plannedbetween Kirkenes and Nikel

– Main part of Lapland and the whole northern Norway donot have a railway networkand railway connections

Port of Kirkenes– Port is located on the northern end of the Arctic Corridor and is included in

the national port development programme of Norway

– Port is an important node for passenger traffic and the end point of Hurti-gruten: regular, all-year traffic operations between Bergen and Kirkenes

– Port has ore transport (2,9 million tonnes), fish transport and servicetransport of oil and gas industry (total volume of other transport is 112 000 tonnes)

– Deep-water channel and all-year ice-free transport services

– Ready-made plans and ongoing investments exist for developing the port for unit load transport

– Already 2-3 billion crowns have been invested in the port

Jäämeren rata

• The Barents area has large raw material reserves – investments of almost 70 billion euros have been planned in the area by the year 2015

• Oil and gas industry as well as fish industry are experiencing strong growth in Norway and Russia

• Transport needs of extractive industry will significantly grow in Finnish Lapland: several new and potential mining projects

• Forest industry is strong in Lapland and it has significant transport needs which will increase with stronger forest growth and increasing use of wood in energy production

• Unique nature and climate as well as tourist resorts attract plenty of tourists to the area, tourism has significant growth potential in the Saariselkä and Pyhä-Luosto areas

• Utilization and processing of raw materials significantly increase the mobility needs of labour force

• Opening of the Northern Sea Route from Europe to Asia and to the Pacific Ocean creates a significant opportunity to organize the logistics system of Finland and Europe in a new way

Transport potential

Kuljetuspotentiaalit

Northern Sea Route

Source: YLE

Transport potential

Transport

potential

before 2020

(railway to

Sodankylä)

by 2030

(railway to the Arctic Sea)

Mining industry

500 000–800 000

tonnes 800 000–1 000 000 tonnes

Forest industry

400 000–500 000

tonnes 400 000–500 000 tonnes

Tourism & com-

muting to work 1 train / day 1–2 trains / day

Fish transport &

other freight

transport 100 000 tonnes 300 000 tonnesTransport on the

Northern Sea

Route

0 3–7 million tonnes (approx. 10% of

estimated container traffic volumes

between the Northern Baltic Sea

area and Asia will pass through the

port of Kirkenes)

Oil & gas

0

40 million tonnes along the

Northeast Passage --> 0.4 million

tonnes shifted to the railway (1% of

oil and gas transport volumes)

TOTAL 5–6 trains / day 20–40 trains / day

• Railway will be implemented in two phases: in the first phase to Sodankylä and in the second phase to the Arctic Sea coast

• Railway will be built to standard which enables fast and cost-efficient passenger and freight transport connections

– electrified single-track main railway

– axle load of 25 T

– speed of 140 km/h

• There are several conservation areas and sensitive areas with regard to natural values in the impact area of the railway: railway alignments are planned to follow the existing road traffic corridors as much as possible

• The usability, feeder connections, construction potential and impacts on regional development have been considered in the identification of railway alternatives

Implementation and alternatives of the railway

Railway alternatives

Estimates of construction costs

– 1A-2-3A: 1169–1606 M€– 1A-2-3B: 1107–1523 M€– 1B-2-3A: 1201–1650 M€– 1B-2-3B: 1139–1567 M€

– In Finland total of 558–1038 M€– In Norway total of 384–838 M€

– Kemijärvi–Sodankylä 173–238 M€– Rovaniemi–Sodankylä 205–282 M€

– Sodankylä–Ivalo 256–352 M€

– Kolari–Sodankylä 222–306 M€

First implementation phase of the railway -2020

– Transport demand of mining activity and forest industry would attract traffic volumes to the railway which correspond to the existing freight traffic flows on several rail sections in Finland

– There will be sufficient transport demand if starting, planned and other potential mines choose railway as their main mode of transport and the volume of mining operations is high enough

– Raw wood transport and passenger traffic development poten-tial of tourism resorts support the first implementation phase of the railway

– Implementation of the railway can be argued for from the viewpoints of promoting functional transport system, industrial policy and regional policy

Economic preconditions

Second implementation phase of the railway -2030

– Transport volumes can grow significantly and even exceed rail capacity

– Preconditions for implementation will also exist in the long run for the second implementation phase of the Arctic railway, but they are based on heavy assumptions on the use of the Northern Sea Route and how the logistics system and transport volumes will develop between Europe and Asia

– Implementation of the railway can be argued for based on the above mentioned preconditions from the viewpoints of industrial policy and national competitiveness