UPDATE 1-Finland eyes 1.7 bln euros mining investments

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By Brett Young

HELSINKI, Sept 16 (Reuters) - Finland's growing mining industry could attract up to 1.7 billion euros ($2.38 billion) in investments in the coming years, the government said on Tuesday, outlining plans to facilitate such spending.

"The numbers show that mining operations are alive and well in Finland, if not even in a time of amazing new possibilities," Finland's Minister for Economic Affairs Mauri Pekkarinen told a news conference.

Pekkarinen said a major element of the push to ease investments was the ongoing reform of the country's mining law.

A working group is due to report to the government this month and parliament to review the proposal in spring 2009.

Pekkarinen said he hoped the law could come into force in 2010, but the current timetable was 2011.

The government outlined over 45 mining projects, including 18 gold, 10 nickel and 7 diamond mines. Taking into account all mining activity, investments would total some 3.3 billion euros and thousands of new jobs could be created, it said.

Current projects include Talvivaara's (TALV.L) nickel mine in Sotkamo, due to start output in October; Vale Inco's (VALE5.SA) nickel mine in Inari; and six separate gold mine projects of Dragon Mining Plc (DRA.AX).

"The state could help investments if they are so large and long-lasting that there would be a significant impact on the national and local economies as well as employment," the government said in a statement.

Finland also said it would improve infrastructure around the mines. It said at least 600 million euros must be earmarked for rail and infrastructure improvements for six advanced projects in northern Finland.

"The basic point is that if thousands of jobs are created in Lapland via the mining industry, it would be silly if the government could not help with the infrastructure," Finnish Transport Minister Anu Vehvilainen said on the sidelines of the news conference.

(Reporting by Brett Young, Editing by Peter Blackburn)