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A muddy trench, hundreds of metres long, marks what will become the Blaiken mine, which will start up in June 2006 in northern Sweden, evidence of a renaissance in Swedish mining thanks to surging metals prices.
Huge yellow digging machines are scraping away the earth from the mine, which will produce 120,000 tonnes of zinc in concentrate and 24,500 tonnes of lead in its first five years.
The mine, on a blustery hilltop near the town of Sorsele and overlooking one of the thousands of lakes in the region, will also produce gold, says owner ScanMining.
Just a few years ago, mining was in decline in Sweden and much of the sparsely populated, forested north looked like being left to logging companies and the native moose and reindeer.
The exception was the world's largest underground iron ore mine in Kiruna, north of the Arctic circle.
But thanks to strong demand for metals and rocketing prices, copper, zinc, gold and silver mining are undergoing a rebirth.
Mining companies will invest more than 30 million euros ($35 million) in exploration in Sweden this year, mainly in the north, according to estimates by the Raw Materials Group (RMG) consultancy, up from around 25 million euros in 2004.
Much of this is going into exploration of the Gold Line, which slices across the rolling forests from the city of Umea on the east coast northwards toward the border with Norway.
"We have a whole new gold district here," said Karl-Ake Johansson, chief executive of Lappland Goldminers, which hopes to start mining at its Faboliden site in 2008.
To the south of Faboliden is Svartliden, a gold mine that started production this year, and the area is dotted with new claims. Sweden's mining inspectorate has had twice as many applications for exploration permits in 2005 as it had in 2004.
"Better profits for mining companies from the higher metals prices mean that they are taking the opportunity to invest in their future," said Jan-Olof Hedstrom, chief mine inspector.
And it's not all gold.
North Atlantic Natural Resources' Storliden zinc and copper mine, opened in 2002, lies to the east. Above the Arctic Circle, mining and smelting firm Boliden is looking at extending the life of its Aitik copper mine as high prices make it worth exploiting lower ore grades.
Sweden will produce 7 tonnes of gold, 200,000 tonnes of zinc and 85,000 tonnes of copper this year, all above production levels of the previous year, according to estimates from RMG.
The country is the European Union's second largest silver, zinc and gold producer, its third largest copper and lead producer and its biggest iron ore miner.
Production and exploration are expanding because of the huge increase in demand for metals, led by China, which has pushed prices to record levels. Copper rose to record highs above $4,200 a tonne last week, zinc near an 8-year high of $1,570 per tonne and gold is close to an 18-year peak of around $475 a troy ounce.
"When gold was under $400 an ounce, there weren't any small companies out here looking," said Bart Stryhas, manager of US exploration firm Northland Resources, which is drilling for gold in Barsele and Norra on the Gold Line.
Resources in Sweden are relatively under-exploited, infrastructure is well developed and mining laws are supportive. The Swedish Geological Survey has detailed information on promising areas which it provides free.
But it is not all plain sailing.
Sweden has very strict environmental rules.
Australia's Dragon Mining, which operates the Svartliden mine, had a 2-year legal battle to start mining because of concerns over the effect on a colony of pearl clams.
"With all the environmental rules, you don't even drop a piece of paper after prospecting," said Jan-Ola Larsson, technical director of Beowulf Mining.
Labour costs are also high. Simon Solomons, Dragon Mining's general manager at Svartliden said it takes five teams to operate the mine compared to four if it had been Australia.
"Sweden has not caught up with economic rationalism yet," said Solomons. "It has quite precise labour rules."

Copyright Reuters, 2005

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