Terrafame, a battery chemicals company, was established in 2015 and is owned by Finnish Minerals Group Oy—a special-purpose company wholly owned by the Finnish state—along with the Galena funds and Mandatum Oyj. The company’s open-pit mine and production facilities are located in Sotkamo. In 2024, Terrafame’s net sales amounted to €544.5 million. On average, around 2,000 people worked in the indus-trial area, of which 793 were Terrafame’s own employees.
The battery chemicals production process begins at Terrafame’s own open-pit mine, where ore is excavated. The mined ore is crushed, agglomerated, and transferred to bioleaching heaps. In the bioleaching process, naturally occurring microbes in the ore are used to separate metals from the rock. Air is blown into the ore heaps, and they are irrigated with an acidic production solution to create optimal conditions for microbial activity. The ore is first leached for approximately 18 months in the primary heap. After that, it is moved to a secondary heap for final leaching. Bioleaching is an energy-efficient production method.
At the metals extraction plant, metals are separated from the production solution through a step-by-step precipitation process into nickel-cobalt, zinc, and copper sulfides. The nickel-cobalt sulfide is fed into the battery chemicals plant located in the same industrial area, which began operations in summer 2021. There, it is refined into battery chemicals—nickel and cobalt sulfates. A by-product of the production pro-cess is ammonium sulfate, which is used as fertilizer. Zinc and copper sulfides are filtered and sold for further processing for use in various industries. In summer 2024, Terrafame launched a uranium recovery plant, where uranium is separated from the production solution. The end product of the process is urani-um oxide, which is used as fuel in nuclear energy production.
Terrafame publishes an annual sustainability report, which is available on the company’s website: www.terrafame.com. A review of the nearby waterbodies is published annually and is targeted especially at local stakeholders. The review is available (in Finnish) on the company’s website: www.terrafame.fi.
| AAA | |||||||||||||
| AA | |||||||||||||
| A | |||||||||||||
| B | |||||||||||||
| C | |||||||||||||
| Community Outreach | Biodiversity Management | Tailings management | Water management | Climate change management | Mine closure | Occupational health and safety |
| Crisis management preparedness | Internal review | Training and exercises | |
|---|---|---|---|
| Crisis Management Planning – Corporate | |||
| Crisis Management Planning – Site |
Terrafame does not conduct mineral exploration in new areas. The company’s geological surveys and test drillings are related to existing deposits.
| Yes | No | |
|---|---|---|
| Location in a nature reserve* | ||
| Environmental Management System ** | ||
| Environmental impact assessment required (in accordance with the EIA Act) * | ||
| Measurements for dust | ||
| Measurements for noise | ||
| Measurements for vibration | ||
| Environmental risk assessment carried out | ||
| Deviations from environmental permits *** | ||
| Closure plan for the mine | ||
| Plan for the controlled shutdown of the mine in unexpected situations |
| Yes | No | |
|---|---|---|
| Staff initiative system | ||
| Performance appraisals concerning the entire personnel | ||
| Staff training plan | ||
| Equality plan | ||
| Employee representation in company administration | ||
| Occupational health and safety management system* | ||
| Occupational safety card for everyone working in the area | ||
| Own rescue unit |
Terrafame has no operations within reindeer herding areas. Terrafame’s stakeholder engagement considers the municipality, local residents, landowners, professional fishers, tourism operators, and environmental organizations. As in previous years, Terrafame’s employment impact in the Kainuu region remained significant. In 2024, the company had 793 full-time equivalent (FTE) employees (2023: 842), of whom 93.9% (93.5%) were on permanent contracts. At the end of the year, 80.2% (78.4%) of the personnel lived in Kajaani and Sot-kamo. In addition to its own staff, an average of 1,217 (1,038) contractor and subcontractor employees (FTE) worked at the industrial site during the year.
Recreational use in the surrounding area is mainly focused on fishing and other water-based activities. Most of the treated discharge water is directed via a pipeline to Lake Nuasjärvi, a large water body located between Kajaani and Sotkamo. The lake is surrounded by both permanent and holiday residences and is a key recreational area in Kainuu.
Monitoring results show that the treated discharge water has increased sulfate concentrations in the lake, but no changes have been observed in fish populations. In a 2023 study conducted by the Natural Resources Institute Finland (LUKE), a sensory evaluation panel trained in food quality assessment found that the taste and texture of pike-perch from Lake Nuasjärvi were comparable to those from Lake Oulujärvi. LUKE published a video about the study and its background in October 2023, available on its YouTube channel: youtube.com/@LuonnonvarakeskusLuke.
Other significant nearby lakes used for recreation are located approximately 10 km from the industrial site. These lakes have shoreline properties and are used for leisure fishing. A small amount of treated discharge water is directed to these lakes annually, with only minor impacts on water quality, mainly slightly elevated sulfate levels.
Treated discharge water has also been routed through small nearby water bodies to both the north and south. These small waters were the primary discharge route during the operations of the previous operator, when sulfate and metal concentrations in the discharge water were higher than today. As a result, some lakes experienced long-term sulfate stratification, disrupting natural seasonal mixing. Elevated metal concentrations were also observed in some lakes. In 2012, authorities issued a recommendation for four nearby lakes advising against the use of lake water for sauna or household purposes. This recommendation remains in effect.
Most of these small water bodies have recovered, although some still show minor stratification. For example, deep waters in Lake Kivijärvi were stratified from 2011, but since 2020, mixing has resumed. Sulfate concentrations in the deepest part of the lake have decreased from previous levels of 2,000–4,000 mg/l to an average of 41 mg/l. Another small deep basin has also shown positive development.
Terrafame has acquired water and land areas near the mining concession for future expansion. These include areas around the affected small water bodies, which no longer have active shoreline properties. Some of these small water bodies will be covered by construction, and the recovery of remaining ones will be ensured through restoration measures if necessary. One such water body is Lake Salminen, which has been heavily stratified since 2012 and has not recovered naturally like other nearby lakes. The Regional State Administrative Agency of Northern Finland granted a restoration permit for Lake Salminen as part of the main permit decision in June 2022. Terrafame carried out restoration measures in 2023–2024 during the construction of the secondary leaching area. The condition of nearby water bodies is described annually in the Waterbody Review, which is distributed to local residents and based on annual monitoring reports.
Deposition areas, such as waste rock and spent ore heaps, are closed during operations once they reach capacity. Landscaping measures, such as vegetation of topsoil deposition areas, are carried out during operations. The entire production area will be landscaped after operations end. Environmental impact assessments have included visual modeling and visibility analyses to evaluate landscape impacts. Waste rock and spent ore heaps will result in permanent changes to the landscape.
Terrafame’s primary external communication channel is its website, where news and announcements related to the company’s operations are published. The website also provides stakeholders with the opportunity to submit anonymous feedback, which is processed systematically according to established procedures. The company’s annual sustainability reports are available on the website.
Terrafame also communicates through press releases and direct dialogue with stakeholders via phone and email. Social media is actively used, with LinkedIn being the most prominent channel. Recruitment communication is conducted via Facebook (@kykyjentalteenottofi) and Instagram (@terrafameoy).
Internal communications utilize a wide range of channels, including meetings, interactive Teams tools, intranet, information screens across the industrial site, and an SMS alert system for emergencies. Quar-terly staff meetings are held in connection with interim reports, where the CEO presents financial results and other current topics. A monthly staff magazine is published, including a quarterly “Contractor Extra” edition featuring updates relevant to partner companies operating on-site. In 2024, four regular Contrac-tor Extras and one Safety Extra were published and distributed to both Terrafame employees and partner companies. Regular meetings are held with key contractors to discuss safety and current issues.
Since 2022, Terrafame has operated a dedicated local cooperation group comprising diverse expertise from the company’s area of influence. The group meets 1–2 times per year, with active participation and broad discussions on Terrafame’s operations and outlook. The company also maintains direct dialogue with nearby residents and communicates through dedicated neighborhood channels, including a section on the website. Water impacts are of particular interest to local residents. Since 2019, Terrafame has published an annual Waterbody Review, distributed with local newspapers to households in Kainuu and avail-able on the company’s website. Open and timely communication helps reduce concerns and build trust between the company and local communities.
Nearby residents are informed of exceptional situations or other relevant updates via a dedicated group SMS system. Similar systems are in place for Terrafame personnel and contractors. While not an official emergency communication channel, the SMS system can support authority communications with permission.
Terrafame’s industrial fire brigade operates as a contracted unit under the Kainuu Rescue Department, improving emergency service coverage in surrounding rural areas. In 2024, the brigade responded to nine incidents outside the industrial site as part of the regional rescue service.
Terrafame has organized various events such as public information sessions, family days, and community meetings. Under normal circumstances, the company meets approximately 2,500–5,000 people annually through these events.
Sponsorship:
Terrafame primarily supports sports, culture, safety initiatives, and students in process industry-related fields in the Kainuu region. The company allocates approximately €60,000 annually to sponsorships. In 2024, key sponsorships included Sotkamon Jymy, the Finnish Biathlon Association, and Kajaanin Hokki. The company also supported students in chemistry and mining studies. Sponsorship applications are re-viewed 2–3 times per year by a dedicated team to ensure alignment with Terrafame’s values and goals. Terrafame supports the local village association and organizes annual clean-up events along access roads in cooperation with partners. The company also participates in Tuhkakylä village events, where safety and environmental topics are discussed.
Between 2019 and 2024, Terrafame has conducted four two-year apprenticeship programs in cooperation with Kainuu Vocational College and Oulu Region Vocational College, leading to vocational qualifications in process industry. Three of these programs supported staffing for the battery chemicals plant launched in 2021, with 67 graduates, most of whom were employed by Terrafame. A fourth group began studies in autumn 2023, aiming to work primarily at the uranium recovery plant and other production units.
To ensure access to skilled personnel, Terrafame continued close collaboration with educational institutions in 2024, particularly with Kainuu Vocational College, Kajaani University of Applied Sciences, and University of Oulu. This cooperation included apprenticeships, internships, summer jobs, thesis projects, and site visits.
In 2024, around 50 Terrafame employees participated in various qualification programs, mainly vocational or specialist degrees in process industry, maintenance, or vehicle technology. Training for staff at the ura-nium recovery plant also continued.
Process development is primarily conducted as part of regular business operations and included in normal operating costs. In 2024, development focused on enhancing bioleaching, battery chemicals production, and metals recovery. The company also explored alternative solutions for cover and base structures and conducted research and pilot projects related to process optimization, raw materials, and circular economy.
Terrafame actively contributes to the development of Finnish and European battery strategies and en-gages in R&D collaboration with several universities and research institutions.