New Legislation Paves The Way For Mining Pledge

Introduction

Pursuant to a recent mining legislation reform, the new Finnish Mining Act (621/2011) (the "Mining Act") together with certain decrees has been introduced in Finland. From the financing perspective, of particular interest in the Mining Act and the relevant decree are the provisions on pledges over both mining permits and exploration permits (collectively mining pledges). As one of the new features, such provisions allow the grant of both first and second ranking mining pledges, which may be practicable e.g. in large mining projects involving both bank and debt capital financing. Further, pursuant to the revised provisions, the previously experienced uncertainties in respect of the establishment of an effective mining pledge have been overcome. Generally speaking, the mining pledge can nowadays be considered as an effective and bankable security.