Talvivaara may not expand if hit by tax: report

HELSINKI Fri May 25, 2012 12:00am EDT

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HELSINKI (Reuters) - Finnish mining company Talvivaara (TLV1V.HE) TALV.L may halt plans to expand its nickel mine if Finland levies new taxes on mining as punishment for environmental problems, Talvivaara chief executive told weekly newspaper Tekniikka&Talous.

Some Finnish lawmakers have called for more taxes on the mining industry after a series of environmental problems at new mines, including a death of a worker at Talvivaara's mine in Sotkamo, eastern Finland, from high levels of hydrogen sulphide. Nearby residents have also complained of odors.

Talvivaara has been carrying out an environmental assessment for a possible expansion to Sotkamo.

"All decisions, such as reforms of mining law and possible mining tax, will impact it," CEO Harri Natunen said of the expansion plans in an interview published on Friday.

Finland's environment minister has said the company must curb pollution by the end of the year or face penalties including a possible shutdown.

Police are examining the Sotkamo mine for discharging waste water with high levels of sodium, sulphate and manganese into nearby lakes.

(Reporting by Terhi Kinnunen; editing by Jason Neely)

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