The harbor Liinahamari in Petsamo was important for the Finnish economy during the First World War as the Baltic Sea was blocked by the Germans. In the Tarto Peace Treaty (1920) the Soviet Union ceded Petsamo to Finland.
Deposits of Nickel were found after Petsamo became a part of Finland, and in 1934 it was estimated that the deposits contained over five million tons of Nickel. Mining operations started in 1935 by Canadian and French corporations.
Construction of a road from Sodankylš through Ivalo to Liinahamari started in 1916 and was completed in 1931. After that Petsamo became a popular tourist attraction as it was the only port at the Barents Sea that could be reached by automobile.
In 1941, during the Continuation War, Petsamo was used by Nazi Germany as a staging area for the attack towards Murmansk. In 1944 the Red Army occupied Petsamo again. Petsamo was ceded to the Soviet Union according to the Paris Peace Treaty.
After the war the Soviets expanded the mining operations which had a catastrophic impact on the environment.