Finland is not exactly the most exciting place for hedge funds, except for Tiger cubs who are shorting Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) in a pack. But another crowded short bet that is gaining some high profile shortsellers is Outotec Oyj (HEL:OTE1V), a Finnish company that provides services in the mining and metallurgic business. David Einhorn’s Greenlight Capital has also established a short position in the company—the fund started shorting Outotec in mid-July and has now increased its position to 1.64% of Outotec‘s shares, one of the largest short bets disclosed on Outotec, and equal to around $40 million.

Greenlight Capital

Other notable bets against Outotec have been placed by Maverick Capital, Marshall Wace, Israel Englander’s Millennium Capital and Citadel. The total short interest disclosed to the Finnish regulatory authority is equal to 12.6% of Outotec’s outstanding shares. The largest bet has been placed by Lee Ainslie’s Maverick Capital which is holding 2.9% of Outotec’s shares short.

Betting against the mining technology company has been profitable so far, as Outotec’s shares have lost 14% YTD. Outotec provides technologies related to the processing of copper, nickel, zinc, lead, gold, silver, platinum, industrial minerals etc and also provides services in the coke, bioenergy, oil shale and sands sector. The company reported  revenues of  €2.1B in FY2012, while annual earnings amounted to €0.69 per share.

Greenlight shorts mining servicer but is bullish on gold miners

David Einhorn’s Greenlight Capital is sitting on a 10.7% gain through July of this year. In the latest quarterly update, the hedge fund disclosed that it had covered short positions in J.C. Penney Company, Inc. (NYSE:JCP), Boston Properties, Inc. (NYSE:BXP), Essex Property Trust Inc (NYSE:ESS) and Greenhill & Co., Inc. (NYSE:GHL). He did not disclose any new shorts so this is one of the first ones to surface in Q3. Unsurprisingly, Einhorn is not bearish on the gold mining industry, in Greenlight Capital’s Q2 earnings call, he said that the fund has scaled back exposure in gold bullion slightly to buy gold miners at cheap levels.

Greenlight Capital’s other short positions in Europe include, FLSmidth & Co. A/S (CPH:FLS), Elekta AB (STO:EKTA-B) and Daily Mail and General Trust plc (LON:DMGT).

Shorts rising in mining industry services

Shorts in the mining services industry have been on the rise lately. As the metals and mining sector is pressured due to constriction of demand from China, companies that have high exposure to the sector are being targeted by shortsellers with newly found energy. Metso Oyj (OTCMKTS:MXCYY) (HEL:MEO1V), another Finnish company with similar business profile to Outotec is a short bet of Odey Asset Management, John Griffin’s Blue Ridge Capital and more recently, Conatus Capital, a Tiger grandcub founded by David Stemerman. Metso is down 15% YTD, the company provides products like crushers and grinders to mining industry and is also involved in manufacturing of paper. Paper industry, a major business in Finland, is a troubled sector, so it seems Metso is getting heat from all sides.

The Weir Group PLC (LON:WEIR) is another company that provides services to the oil, gas and minerals industry and has been heavily shorted, short interest is upto 13.1% of Weir’s outstanding shares. While Outotec and Weir core customers may be different, the basic short thesis is the same, slowdown in the mining sector bodes trouble for complementary industries.

According to Markit data, Outotec Oyj (HEL:OTE1V) is among the top 10 most shorted European companies along with names like Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) and AIXTRON SE (NASDAQ:AIXG), German semiconductor company. The high short interest indicates an expected near term fall, said Markit in early July.