Talvivaara must deal with market forces - new minister
By Ritsuko Ando
HELSINKI (Reuters) - Finland's new minister in charge of state ownership said mining company Talvivaara and others which have received state investment should deal with market forces without relying too much on government support.
Pekka Haavisto was chosen late on Wednesday by his party, the Greens, as the new Minister for International Development. In addition to overseeing foreign aid, he will also be responsible for the state's investments in companies.
"Basically, state-owned companies, or companies in which the state has a share, have to survive in the market," he told Reuters in an interview after announcing that he would succeed fellow party member Heidi Hautala, who resigned last week in a scandal over her handling of a Greenpeace protest.
Despite moves toward privatisation since the 1990s, the government still owns stakes in 14 companies listed on Helsinki's main bourse and in around 40 others.
The country of 5.4 million people has a limited pool of private capital, but is one of the few euro zone economies with a triple-A credit rating.
Talvivaara warned last Thursday it needed another cash injection, just six months after an earlier fundraising, and its shares have since fallen to record lows on concerns about its viability.
Finnish state fund Solidium, which took part in the earlier fundraising and is the biggest investor with a 17 percent stake, has said it is undecided about more financing.
Talvivaara's mine was initially seen as one of Finland's most promising enterprises, pioneering a technology called bioheapleaching which uses bacteria to extract nickel from relatively low-grade ore. The mine has suffered repeated problems, including a waste water leak.
"Talvivaara has an extra problem, with environmental challenges," said Haavisto, adding that it was too early to decide on how to deal with Talvivaara.
Haavisto said the government may shift its investments to new growth areas such as clean technology, and cut investments in firms which are not of strategic interest to Finland.
He did not name any specific companies, although Solidium last month trimmed its stake in TeliaSonera to 10.1 percent from 11.7 percent and analysts say it may also cut back on its stake in investment group Sampo .
"If we don't have any strategic interest then of course we are free to sell. And we are free to buy, and we can have our priorities," he said. "My priority is to look at all the ways and means to support new technologies, clean tech companies, and to find new ways to get the new sector flourishing."
Haavisto, who is expected to be officially appointed on Thursday, is likely to face strong pressure from left-leaning lawmakers to protect union jobs. At the same time, the government is looking to sell some shares to bolster its coffers.
His predecessor Hautala resigned after being criticised for trying to dissuade a state-owned shipping company from filing a criminal complaint against Greenpeace protesters.
(Editing by Andrew Roche)
