General

As a limited liability company incorporated in Finland, Talvivaara is governed under the provisions of the Finnish Companies Act and its Articles of Association. Responsibility for the control and management of the Company is divided between the general meeting of shareholders, the Board of Directors and the Chief Executive Officer. The shareholders participate in the control and management of Talvivaara through actions taken at general meetings of shareholders.

Talvivaara complies with the Finnish Corporate Governance Code 2008 for listed companies (the "Finnish Code") and the Insider Guidelines issued by NASDAQ OMX Helsinki. In addition, the Company follows the

UK Combined Code on Corporate Governance dated July 2008 (the "UK Combined Code") insofar as it does not constitute a contradiction with applicable Finnish legislation and it is appropriate alongside with the corporate governance practices required by the Finnish Code having due regard to the UK Financial Reporting Council's (FRC) guidance on overseas companies. Pursuant to FRC's guidance, overseas companies listed on the Main Market are required to disclose the significant ways in which their corporate governance practices differ from those set out in the UK Combined Code.

The Finnish Code is available on the Securities Market Association's website at www.cgfinland.fi and the UK Combined Code on the Financial Reporting Council's website at www.frc.org.uk. Talvivaara's corporate governance and control system deviates from the following recommendations under the Finnish Code and the UK Combined Code:

Recommendation 41 and UK Combined Code provisions B.1.3 and A.3.1: Participation of the members of the Board of Directors in a share-related remuneration scheme

The Company granted options to the Non-Executive members of the Board as a part of the 2007 Option Scheme. The options were granted in 2007 prior to the listing of the Company's shares on the London Stock Exchange ("LSE"). The options granted were disclosed in the pathfinder and the final prospectus and published in connection with the listing of the Company's shares on the LSE Main Market. More details about the options can be found from the remuneration section of the Company's annual report or from the Company's annual accounts. Thereafter, no options have been granted to Non-Executive Directors, nor has the Company any intention to grant such options to Non-Executive Directors in the foreseeable future. Consequently, the Company also determines Mr. Haslam, Ms. Carr, Mr. Niiva and Mr. Titcombe as independent of the Company notwithstanding the options granted.