TIDMBEM
RNS Number : 2385B
Beowulf Mining PLC
09 June 2021
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation ("MAR") (EU) No. 596/2014, as incorporated into UK law
by the European Union (Withdrawal) Act 2018. Upon the publication
of this announcement, this inside information is now considered to
be in the public domain.
9 June 2021
Beowulf Mining plc
("Beowulf" or the "Company")
Kallak Iron Ore Project - UNESCO comments
Beowulf (AIM: BEM; Spotlight: BEO), the mineral exploration and
development company, has assessed UNESCO's comments on the
Company's application for an Exploitation Concession for the Kallak
Iron Ore Project ("Kallak").
Main comments from UNESCO
-- UNESCO suggests that the Swedish Government seek a 'revised
and extended In-Depth Assessment which provides a more secure basis
for assessing the impact of the proposed development on the World
Heritage Property...prior to any decision being taken to approve
the mining exploitation'.
-- UNESCO refers to Decision 37 COM 7 of the World Heritage
Committee and a '"No-go" commitment by not permitting extractive
activities within World Heritage properties and by making every
effort to ensure that extractive companies...cause no damage to
World Heritage properties'.
-- UNESCO states that 'the role of the Sami Parliament is
clearly relevant to the assessment of the impact of the proposed
development on the World Heritage property'.
-- UNESCO suggests the Swedish Government 'should consider how
the practice of reindeer husbandry outside the property and
directly related to reindeer husbandry within the property will be
protected'.
Overview of the Operational Guidelines of the World Heritage
Convention
The planned mine at Kallak is not located in the World Heritage
property Laponian Area ("Laponia"). Section 172 of the Operational
Guidelines for the Implementation of the World Heritage Convention
(the "Guidelines"), referred to in correspondence between the
Swedish Government's Näringsdepartementet and UNESCO, states:
"The World Heritage Committee invites the States Parties to the
Convention to inform the Committee, through the Secretariat, of
their intention to undertake or to authorize in an area protected
under the Convention major restorations or new constructions which
may affect the Outstanding Universal Value of the property. Notice
should be given as soon as possible (for instance, before drafting
basic documents for specific projects) and before making any
decisions that would be difficult to reverse, so that the Committee
may assist in seeking appropriate solutions to ensure that the
Outstanding Universal Value of the property is fully
preserved."
The planned mine at Kallak will cover an area of 13.6 square
kilometres. This is significantly less than the 80 square
kilometres, as IUCN stated in 2016, when it recommended a revised
Environmental Impact Assessment needed preparing. Laponia covers
9,400 square kilometres. The planned mine is 0.14% in comparison to
the area covered by Laponia.
Acknowledged by UNESCO, the closest point from the planned mine
to Laponia is 33.8 kilometres. The reindeer migration route from
the planned mine to Laponia is approximately 45 kilometres
long.
The location and the size of the mine in relation to Laponia is
shown in the map below.
Please follow the link:
https://beowulfmining.com/wp-content/uploads/2020/12/20201217-Kallak-Proximity-to-Laponia-.pdf
The area of Laponia is by far the largest of the World Heritages
sites in Sweden. UNESCO asked for a clarification of the boundaries
of Laponia and other World Heritages sites in 2017. After the
clarification was made by Sweden, UNESCO had no further questions
regarding the boundaries (WHC-17/4.COM/8D).
A buffer zone around Laponia has never been considered
necessary. As Section 99 of the Guidelines points out, the
boundaries should be drawn to incorporate all the attributes that
convey the Outstanding Universal Value and to ensure the integrity
and/or authenticity of the property.
UNESCO has never questioned the fact that no buffer zone exists.
An objective assessment of the area would conclude that the area is
large enough to meet the criteria set by UNESCO for World Heritage
sites.
In addition, Kallak is not included in any Management System for
Laponia as described in Section 111 of the Guidelines. Using the
Guidelines terminology, it is neither 'in' Laponia nor within a
buffer zone, as none exists.
The coexistence of mining and reindeer herding
Reindeer herding is not a static activity and the importance of
any specific area varies from year to year. Reindeer migrate over
an area, so their presence on and around Kallak is days in the year
and not permanent. The Company has been careful in its analyses to
consider the proposed mine's potential impacts on Jåhkågaska
tjiellde's ("Jåhkågaska") reindeer herding activities in their
totality.
As the Company moves forward with the project, we will work more
closely with Jåhkågaska, to learn from their annual reindeer
herding management plan ("renbruksplan"), such that we can plan
together our mutual activities. Kallak represents only about 0.5
per cent of Jåhkågaska's available pasture lands, and Jåhkågaska's
4,500 reindeer make up less than ten per cent of the total number
of reindeer that are present in Laponia over some part of the
year.
It is an established fact that there are solutions for how to
manage the competing land requirements of mining operations (and
other industrial activities) and reindeer herding.
With regards to migration, for example, reindeer can be moved
around an obstacle, such as a mine, using specific fenced
corridors, Eco ducts or even trucks. A highly relevant practical
case can be found in LKAB-Kiruna-Abisko National Park area. Abisko
is like Laponia, a protected area which is used by reindeer
herders. The reindeer herders at Abisko are maintaining their
traditional activities, whilst sharing their winter pasture with
the industrial activities present around Kiruna and
Svappavaara.
There is no example in Sweden of a reindeer herding coop
becoming unsustainable because of mining, while there are many
examples of reindeer herding and mining coexisting; commercial
agreements are made, parties benefit, as do wider stakeholder
groups from the ensuing economic development.
Kurt Budge, CEO commented:
"On Tuesday morning this week, the Company was notified by the
Finansinspektionen, Sweden's financial supervisory authority, whose
role is to promote stability and efficiency in Sweden's financial
system as well as to ensure sustainability and an effective
consumer protection, of UNESCO's comments.
"UNESCO's letter was dated 2 June 2021 and Finansinspektionen
wrote that the UNESCO document appeared to have been in the hands
of members of the general public (including elected Sami officials)
for a number of days, with associated posts on social media.
"During the last six years, there have been several occasions
where 'market sensitive' information in Sweden has been made public
before Beowulf has been informed. Each time damage has been caused
to the Company's share price, individual's investments and Sweden's
reputation as a country in which to do business. The Company treats
this matter very seriously and is taking legal advice.
"It is unsurprising that, given its remit, UNESCO has an opinion
on Kallak and this does not consider the 'big picture'.
"The Company maintains it is inappropriate for UNESCO to write
about an area that we would strongly argue falls outside of its
jurisdiction. Beowulf has been granted permits to invest, explore
and develop Kallak since 2006. Kallak has never been a "No-go"
area.
"Jokkmokks Kommun is one of the poorest municipalities in
Sweden. It has been forced to cut its budget by SEK 28 million over
the last two years, impacting public services and infrastructure
which it can no longer afford to provide for the benefit of the
community.
"Kallak would bring SEK billions in investment to Jokkmokk. It
would create 250 direct jobs and 300 indirect jobs in the town and
be in operation for 25-years or more, potentially generating SEK 1
billion in tax revenues.
"The Company has been working with Kallak over 15 years,
invested over SEK 80 million, defined a significant iron ore
resource, with upside potential demonstrated by the recent Mineral
Resource Estimate upgrade, from which we have produced a market
leading concentrate of 71.5 per cent iron content.
"Kallak is ideally positioned with respect to the HYBRIT and
H2GreenSteel projects and can similarly leverage renewable power to
ensure the integrity of a fossil-free supply chain in
Norrbotten.
"Importantly, UNESCO does not conclude that Kallak cannot be
mined. It is an easy recommendation to suggest the Company could
provide more information, but the checks and balances already exist
in Sweden's laws and permitting processes, granted they need to
function effectively, for everything that needs to be done, to get
done.
"When you look objectively, without bias, at the Kallak story,
and understand that it is not about a mine, it's about producing
high-quality iron ore for fossil-free steel production, and with
that the regeneration of Jokkmokk, giving the town a strong
economic future that lives beyond mining, which also includes
reindeer herding, tourism, forestry and entrepreneurs, and you
understand that all the evidence says mining and reindeer herding
coexist in Sweden, then the Swedish Government should be moving
closer to a decision.
"The Company has already spoken to the Government and will be
doing so again to seek clarity on next steps.
"The Company will provide further updates in due course."
About Kallak
The Kallak iron ore deposit is located approximately 40
kilometres ("km") west of Jokkmokk in the County of Norrbotten,
Northern Sweden, 80 km southwest of the major iron ore mining
centre of Malmberget, and approximately 120 km to the southwest of
LKAB's Kiruna iron ore mine. The first Exploration Licence for
Kallak was awarded by the Mining Inspectorate of Sweden in
2006.
In April 2013, the Company applied for an Exploitation
Concession for Kallak North (the "Concession") and in October 2015,
the Mining Inspectorate recommended to the Swedish Government that
the Concession be awarded. The Company is still waiting on the
Swedish Government to take a decision.
Kallak Iron Ore Project - Mineral Resource Estimate ("MRE") and
Exploration Target Upgrade
RNS dated 25 May 2021
https://polaris.brighterir.com/public/beowulf_mining_plc/news/rns/story/x8q5k9x
-- An additional 19 million tonnes ("Mt") of iron mineralisation
equating to a 12.5 per cent increase in the resource.
-- Measured and Indicated Mineral Resource of 132 Mt grading 27.8 per cent iron ("Fe").
-- Inferred Mineral Resource of 39 Mt grading 27.1 per cent Fe.
The definitions of Measured, Indicated and Inferred Resources,
as well as Reserves, as used in this MRE, conform to the
definitions and guidelines of the PERC Reporting Standard,
2017.
Market Leading Potential
RNS dated 17 September 2020
https://polaris.brighterir.com/public/beowulf_mining_plc/news/rns/story/x8l7kjr
-- Testwork on Kallak ore has produced an exceptionally
high-grade magnetite concentrate at 71.5 per cent Fe with minimal
detrimental components.
-- This would make Kallak the market leading high-grade product
among known current and planned future producers.
-- The next best magnetite product is LKAB's (the state-owned
Swedish iron ore company), which produces magnetite fines ("MAF")
with a target specification of 70.7 per cent Fe and is regarded as
unique, until now, due to its exceptionally high iron content.
-- Kallak magnetite concentrate would reduce the carbon
footprint of traditional steel manufacturing, improve energy
efficiency in any downstream process and reduce waste. Magnetite
has inherent energy content, which ultimately results in lower
energy demand for steel manufacturing when compared to current
common practice.
-- Globally, the feedstock for steelmaking is 80 per cent
hematite and 20 per cent magnetite. The demand for high-quality
feedstock and therefore magnetite should increase as producers look
to protect the environment by improving energy efficiency,
minimizing waste and the impact of waste disposal.
Economic Potential
In response to the Government's request, in the middle of 2015,
for the County Administrative Board for the County of Norrbotten
(the "CAB") to provide comments on the national economic assessment
for Kallak, the CAB's findings were as follows:
-- Mining is economically relevant and that the Kallak North
project generates economic benefits at local, regional and national
levels, including direct and indirect jobs, tax revenues, and more
broadly across mining equipment and services sectors in Sweden.
-- The Concession Area applied for by the Company creates no
conflicts where national interests are considered.
-- The Concession is designated as an Area of National Interest ("ANI") for minerals.
-- The Company should work with communities that could be
affected by the development of a mining project, in order to
eliminate or mitigate any impacts, including reindeer herders and
Sami villages.
-- The Company should consider in its ongoing studies the
potential impact of its mining activities on tourism and transport
infrastructure.
In 2017, Copenhagen Economics produced a 'Big Picture' study for
Kallak ("the Study" or "the Kallak Study"):
https://beowulfmining.com/wp-content/uploads/2018/10/Copenhagen-Economics_Presentation_SEP17_Swedish.pdf
The Study built on the work carried out by the Company and
others, including the 2015 independent socio-economic study
initiated by Jokkmokks Kommun, completed by consultants Ramböll,
which in its findings concluded that a mining development at Kallak
would create direct and indirect jobs, increase tax revenues and
slow down population decline, and the 2010 study by the Economics
Unit of Luleå University of Technology, 'Mining Investment and
Regional Development: A Scenario-based Assessment for Northern
Sweden'.
Copenhagen Economics had previously reviewed the attractiveness
of the Swedish mining sector on a number of parameters, including
licensing and regulation, commissioned by the Swedish Agency for
Growth Policy Analysis, part of the Government of Sweden.
The Study demonstrated that the economic effect of Kallak is
'not just about a mine'. A mining project would economically
transform Jokkmokk and support other major capital expenditure and
economic activity e.g. Inlandsbanan, Luleå Hamn, Vattenfall etc,
spreading the benefits, through Norrbotten and beyond.
When it comes to Kallak's economic effect on Jokkmokk, the Study
highlights were as follows:
-- A mining operation at Kallak has the potential to create 250
direct jobs and over 300 indirect jobs in Jokkmokk, over the period
that a mine is in operation.
-- These jobs could be sustained over a period of 25 years or
more, if the Kallak South deposit is mined after the Kallak North
deposit, and further deposits at Parkijaure can be defined.
-- The Company will seek to establish a 'Task Force' with
Jokkmokks Kommun and local employment agencies, so that between now
and the start of operations, plans are developed and implemented to
make sure as many as possible jobs are available to people living
in Jokkmokk.
-- Kallak has the potential to generate SEK 1 billion in tax
revenues, considering the case where 70 per cent of the mine's
workforce are based locally, with annual tax revenues of SEK 40
million over a 25-year mine life.
-- These tax revenues would help to develop and sustain public
services and infrastructure in Jokkmokk, which are at risk due to a
lack of new investment and job creation in the community, a
declining population, and an ageing population.
Enquiries:
Beowulf Mining plc
Kurt Budge, Chief Executive Tel: +44 (0) 20 7583
Officer 8304
SP Angel
(Nominated Adviser & Broker)
Ewan Leggat / Stuart Gledhill Tel: +44 (0) 20 3470
/ Adam Cowl 0470
Blytheweigh
Tim Blythe / Megan Ray Tel: +44 (0) 20 7138
3204
Cautionary Statement
Statements and assumptions made in this document with respect to
the Company's current plans, estimates, strategies and beliefs, and
other statements that are not historical facts, are forward-looking
statements about the future performance of Beowulf. Forward-looking
statements include, but are not limited to, those using words such
as "may", "might", "seeks", "expects", "anticipates", "estimates",
"believes", "projects", "plans", strategy", "forecast" and similar
expressions. These statements reflect management's expectations and
assumptions in light of currently available information. They are
subject to a number of risks and uncertainties, including, but not
limited to , (i) changes in the economic, regulatory and political
environments in the countries where Beowulf operates; (ii) changes
relating to the geological information available in respect of the
various projects undertaken; (iii) Beowulf's continued ability to
secure enough financing to carry on its operations as a going
concern; (iv) the success of its potential joint ventures and
alliances, if any; (v) metal prices, particularly as regards iron
ore. In the light of the many risks and uncertainties surrounding
any mineral project at an early stage of its development, the
actual results could differ materially from those presented and
forecast in this document. Beowulf assumes no unconditional
obligation to immediately update any such statements and/or
forecast .
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