More than 800 people, including staff and contractors, were hit when Northland Resources, which had sparked a business boom when it opened the iron ore mine in the town of Pajala in 2012, filed for bankruptcy just two years later.
The mine was closed and its old offices are now being rented out to Sweden's migration agency Migrationsverket. But some hope that the Sweden's refugee crisis could lead to a silver lining for the town, where unemployment at 9.1 percent exceeds the Swedish average of 7.8 percent.
"It has created 70 new jobs," Social Democrat councillor Harry Rantakyrö told the TT newswire about the 700 asylum seekers placed by migration officials in the town of 6,200 residents.
He hopes that some of the new arrivals will choose to stay in Pajala, 10 kilometres from the border to Finland, after they are granted asylum. Like many other rural towns, it has been suffering from a dwindling population, which was only briefly interrupted during its brief booming mining years.
Northland Resources' former offices at Pajala. Photo: Fredrik Sandberg/TT
Rantakyrö, who lost his job when the mine closed, still remembers, one and a half years on, how Northland Resource's bankruptcy brought the isolated town from boom to bust.
"There had been a constant state of decommissioning here, and then we had development. People started moving to the village. We're now back on square one again. But we have to look towards the future," he said, mentioning wind power and tourism projects with Finland as two ways forward.
One of Pajala's asylum home residents. Photo: Fredrik Sandberg/TT
A Syrian asylum seeker named only as Akram told the news agency he was building a new computer system for the refugee accommodation centre to facilitate administrative tasks. The former university teacher said he had made new Swedish friends and would like to stay in Pajala.
"But then I have to find a job here," he said.
A family staying at Pajala's accommodation centre for refugees. Photo: Fredrik Sandberg/TT
However, Pajala's intake of migrants has also caused tensions in the town. An unnamed teenage girl speaking to TT said she and her friends felt less safe as a result.
"They are so many. And they always move around in large groups. I dare not go out by myself in the evenings any more, and my mum says I'm not allowed to," she said.
Sweden took in an unprecedented 163,000 refugees last year, but struggled to provide housing for all of them. The numbers have since gone down, after the government introduced border ID checks and stricter asylum rules.