Chairman's review

Terrafame is ready to take the next developmental steps

During 2017, Terrafame succeeded in reaching its key targets and took major steps forward again. We achieved production records in nickel and zinc, our lost-time injury frequency rate continued to clearly decrease, and our full-year EBITDA was positive. Also, our environmental situation is stable. I would like to thank everyone at Terrafame for these achievements.

Financing arrangements and new ownership were milestones over the last year. In early 2017, we announced a EUR 250 million financing package to ensure finalisation of the ramp-up of our operations. With this package, the Galena Fund, part of the Trafigura Group – which specialises in international commodities trade and logistics – as well as the Finnish financial group Sampo, became owners of the company in addition to the Terrafame Group, owned by the Finnish State. As a result of the arrangement, our Board of Directors was strengthened by two new members who have international metals industry and trade expertise. In this connection, the Terrafame Group’s representative also became a member of the Board.

In November, we announced that we are planning production of nickel and cobalt chemicals, which are used in battery manufacturing for electric vehicles. We also published a new USD 200 million financing package concluded with the Trafigura Group and Sampo for designing and constructing a battery chemicals plant.

Along with the ownership and financing arrangements implemented during the year, the Terrafame Group’s stake in Terrafame will decrease to 71.2%. The Trafigura Group’s stake will increase to 28.7% and Sampo’s holding is 0.1%.

Private funding for finalising the ramp-up of operations was a very important milestone for Terrafame’s operations, and also for the Finnish mining industry in general, as well as for the economy and employment in the Kainuu region. Terrafame has a major impact on the vitality of Kainuu, also bearing in mind the positive effects that indirectly extend to the whole of Finland.

The plan for investing in chemicals used in manufacturing batteries for electric vehicles, which will have a very important role in future road traffic, also demonstrates Terrafame’s commitment as a key international player in the manufacturing chain of electric vehicles. The plan also represents a significant initiative in the development of the Finnish battery industry. It is to the benefit of all Finns that Finland´s natural resources are used so that the highest possible amount of added value remains in Finland.

I have confidence in 2018 for Terrafame. The financing arrangements and new investment plans, together with metals production records, are strong evidence of the exciting future opportunities in Terrafame.


Lauri Ratia
Chairman of the Board
Terrafame Ltd