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The employment and population impacts of the boom and bust of Talvivaara mine in the context of severe environmental accidents – A CGE evaluation

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  • Törmä, Hannu
  • Kujala, Susanna
  • Kinnunen, Jouko

Abstract

There had been a mining boom in Finland before the current recession. The most ambitious investment was the Talvivaara nickel and zinc mine in Kainuu. The operation phase began in 2008, and for three years the mine produced nickel and zinc according to expectations. Then everything changed: two accidents occurred in 2012, which had severe environmental consequences. There was a failed attempt at corporate restructuring. The production company of Talvivaara is now in bankruptcy, and the national government is financing the mine. Our aim is to present an evaluation of the impact these events had on the employment and population of Kainuu region. Our results for the period 2009–2014 indicate that the Talvivaara mine still had a positive cumulative effect on the employment of Kainuu, in spite of the environmental accidents. The results for the period 2015–2022 suggest that the full implementation of the rejected corporate restructuring plan would have been a tolerable solution for the employment and population of Kainuu region. Considering the uncertain future of the mine, we suggest follow up studies.

Suggested Citation

  • Törmä, Hannu & Kujala, Susanna & Kinnunen, Jouko, 2015. "The employment and population impacts of the boom and bust of Talvivaara mine in the context of severe environmental accidents – A CGE evaluation," Resources Policy, Elsevier, vol. 46(P2), pages 127-138.
    • Handle: RePEc:eee:jrpoli:v:46:y:2015:i:p2:p:127-138
    DOI: 10.1016/j.resourpol.2015.09.005
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    Cited by:

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    5. Thomas Moritz & Thomas Ejdemo & Patrik Söderholm & Linda Wårell, 2017. "The local employment impacts of mining: an econometric analysis of job multipliers in northern Sweden," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 30(1), pages 53-65, April.
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    More about this item

    Keywords

    Economic impacts; Mining; CGE modeling; Evaluation;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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