Sotkamo among Finland's leading mining municipalities: Mines boost employment and the economy

In the second episode of our podcast series, mining is discussed through the lens of the municipality of Sotkamo. The discussion explores the impact of mining on the regional economy and employment, while also addressing environmental effects, local acceptance, and the coexistence of mining with other industries.

FMG’s CEO Matti Hietanen is joined by Mika Kilpeläinen, the mayor of Sotkamo municipality.

Mining visible in local infrastructure and employment

The Sotkamo area is home to three operating mines: Terrafame, Sotkamo Silver, and Mondo Minerals’ talc mine. Mining activities are clearly reflected in the everyday life and infrastructure of the municipality of approximately 10,000 residents. New pedestrian and cycling routes have been built, and new apartment buildings have been constructed to meet the housing needs of mine workers.

Mining has also had a significant impact on employment in the region. Between 2015 and 2023, the number of jobs in Sotkamo increased by 24 percent, placing the municipality fifth nationwide.

“If we count both direct jobs and jobs with subcontractors, Sotkamo has just under 5,000 jobs in total, of which around 2,500 are directly related to mining. Sotkamo’s job self-sufficiency rate is 110 percent,” explains Mika Kilpeläinen.

For example, Terrafame employs approximately 900 people, 80 percent of whom live in the Kainuu region, with just over one fifth residing in Sotkamo. The availability of skilled labour is ensured by maintaining high-quality basic services and by engaging in close cooperation with mining companies and educational institutions in the region.

Mining tax reform raises local concerns

The economic significance of mining for the municipality is also substantial in terms of tax revenues. In 2026, Sotkamo is expected to receive approximately EUR 32 million in tax income, of which around EUR 5 million will come from the mining tax. In addition to the mining tax, mines generate other tax revenues, such as property taxes and earned income taxes.

However, the recent significant increase in the mining tax and the government’s decision to allocate 70 percent of the revenue to the state have raised concerns in the region. The municipality’s share falling to 30 percent and the redistribution of benefits elsewhere have sparked discussion among municipalities.

Kilpeläinen notes that tighter taxation could, at worst, have negative effects on the lifecycle of mines. According to estimates, the tax increase could shorten mine lifespans by as much as 4–8 years.

“This is a good example of the old saying that you shouldn’t slaughter the cow that gives you milk. A longer operating life ultimately brings greater overall benefits, by any measure,” Kilpeläinen states.

Environment, tourism, and mining in seamless coexistence

In addition to mining, Sotkamo is home to Vuokatti, one of Finland’s most significant tourism destinations. The coexistence of different industries is possible when communication is open and based on facts.

Environmental considerations are important to both sectors. According to Kilpeläinen, the condition of local water bodies is now even better than it was in the 1970s. The municipality works closely with various stakeholders, and residents’ views on environmental issues are actively heard through, for example, local working groups.

“The closer you can examine issues, the more rationally you can relate to them. In environmental matters, it is crucial that accurate information and experts are available when decisions are made,” Kilpeläinen emphasizes.

The benefits of mining are recognized locally

At the local level, the reputation of the mining industry in Sotkamo is positive, as its importance to both the Kainuu region and Finland as a whole is well understood. Nationally, however, perceptions are still in need of updating.

According to Kilpeläinen, the industry’s overall reputation could be improved by more boldly raising awareness of its societal significance and key end products, and by correcting outdated perceptions of what mining work looks like today.

“We need to dare to openly talk about what the mining industry really is today. There’s still this old image from Snow White and the Seven Dwarfs—going to work with a pickaxe on your shoulder and coming home with a face covered in soot. Today, it’s something entirely different,” Kilpeläinen concludes.

 

The second episode of our podcast series Mineraalit ja miljardit is titled Sotkamo – Finland’s leading mining municipality? Listen to the episode on FMG’s YouTube channel!

What did you think of the episode? We welcome feedback and ideas for future topics and guests.