Karelian backs out of mining plans in northern Finland

AIM-listed Karelian Diamond Resources has confirmed media speculation that it is pulling out of plans to mine for diamonds in northern Finland.

The Irish group said on Tuesday that it has withdrawn its application for a claim reservation in the far north of Finland. A claim reservation would have enabled the company to undertake some preliminary tests to see whether the area was worth developing.

The decision to pull out comes after protests from an anti-mining party who claimed that development would have a negative impact on the native Sami people and their land.

Dublin-based Karelian said the move was a "commercial and technical decision to concentrate diamond exploration efforts on central Finland".

In particular the company wants to focus on the Kuhmo region where it recently discovered a kimberlite body. However, exploration has not yet started in this area.

Karelian was trading 1.5% lower at 1.28p by 15:36.