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Finland: Northland Resources axes jobs and goes into formal reorganization

  • Author: YLE News
  • Updated: September 28, 2016
  • Published July 17, 2014

The mining company Northland Resources announced on Tuesday it will lay off 29 employees during the probationary period of their contract, and says a court application for a debt restructure has been accepted.

The iron-ore producer will also postpone the start of operations at the new Hannukainen mine in Kolari, Lapland, following an earlier announcement that they have temporarily suspended all payments to suppliers and creditors.

The company says it intends to decrease further impact on its workforce by avoiding outsourcing positions to consultants and subcontractors.

The 29 layoffs come as part of a wider attempt to preserve liquidity in the iron-ore mining firm, which operates in northern Sweden and Finland. In June the directors unveiled a program of savings, in which cutting jobs was one option to try and improve the company's finances.

"We're disappointed that we cannot offer continued employment to our workers beyond the end of the probationary period of their contracts," CEO Johan Balck said in a statement. "These reductions will however allow us to operate more efficiently whilst maintaining our production levels," he said.

Payments suspended

As part of June's savings strategy, the company said it was temporarily suspending payments to its suppliers and creditors. This move was opposed by one supplier, prompting Northland to apply to the Luleå District Court in Sweden for a formal debt reorganization, in an attempt to keep the company afloat.

On Monday, the court approved the application for a restructure in Northland Resources and its subsidiaries.

The board of directors has also said it will postpone bringing its Hannukainen mine into production, even though the project is near technical completion.

This story is posted on Alaska Dispatch News as part of Eye on the Arctic, a collaborative partnership between public and private circumpolar media organizations.

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