Nordic Mining ASA (EN Expand:NOM) - Interim report per 31 December 2020
Please find enclosed Nordic Mining’s interim report and company presentation for the fourth quarter of 2020. The interim report and company updates will be presented digitally today, Tuesday 16 February 2020 at 10.00 (CET). The presentation and Q&A session will be held in English and transferred via webcast at: https://channel.royalcast.com/landingpage/hegnarmedia/20210216_10/
You will have the opportunity to post questions online throughout the webcast session.
Important events in the fourth quarter of 2020 and year to date 2021:
CORPORATE
Titanium and lithium added to EU’s list of Critical Raw Materials
In September, the EU added titanium and lithium to its list of Critical Raw Materials to reflect the changed economic importance of the minerals in the transition towards a green and digital economy, and the need to develop resilient value chains for Europe's industrial ecosystems by reducing dependency on third countries, diversifying supply sources and improving resource efficiency and circularity.
The minerals which will be produced at Engebø and in Keliber are well aligned with EU’s requirements and priorities going forward.
ENGEBØ RUTILE AND GARNET PROJECT (100% ownership)Expected reduction in initial CAPEX in the range of USD 100 million
In January 2020, the Company published the results of the DFS for the Engebø project. The study reinforced Engebø as a world class rutile and garnet project with solid financial fundamentals. Following the finalization of the DFS and because of the uncertainties caused by the Covid-pandemic, Nordic Mining initiated a third-party Value Engineering review with the purpose to increase the project’s robustness to future market conditions.
The process to update DFS is progressing in line with expectations, however with the prolonged Covid-pandemic resulting in minor delays. Preliminary results from ongoing optimizations and responses from the contractor market indicates a reduction in the initial capital expenditure in the range of USD 100 million from the USD 311 million in the DFS from January 2020. In contrast, an expected reduction in demand for garnet in the short term implies a revision of projected sales volumes in the first years of production. The full economic results of the updated DFS optimizations will be presented as soon as the study is finalized.
In light of the abovementioned practical implications of the Covid-pandemic, Nordic Mining will present the main results of the study at latest in the first half of April 2021.
The Group is fully financed for the finalization of the DFS update and into H2 2021 based on current plans and forecasts.
Electrical dryers reduce CO2 footprint by more than 80%
In the process to update the DFS, Nordic Mining has been able to commercialize a concept for use of electrical dryers for drying of minerals in the production process. The concept uses proven technology that has been qualified for increased production volumes. The use of electrical dryers will reduce the CO2 emissions from the project with more than 80% and in effect make the process plant completely free of CO2 emissions.
Implementation of environmental and social management systems ongoing
The Company is in the process of implementing an integrated and comprehensive Environmental and Social Management System (ESMS) for the Engebø project to ensure environmental and social issues are managed in accordance with IFC Performance Standards and the Equator Principles, as well as Norwegian permits and regulations.
The Company has developed a Stakeholder Engagement Plan to strengthen and build sustainable stakeholder relations prior to construction. The plan defines a management system for systematic communication and engagement with stakeholders at a local level, and includes a system for continual stakeholder identification, defines tools and platforms for communication and engagement, and a concerns and grievance management system. The plan has been reviewed by the international mining consultancy firm SRK Consulting (SRK) to ensure its compliance with International Finance Corporation’s (IFC) standards. As part of strengthening the stakeholder involvement a local resource group has been established where key stakeholder groups are invited to participate in the Company’s environmental monitoring program. The first group meeting was held in October 2020.
Plans for effective management of extractive waste and efficient energy use are being developed with support from SRK. The plans will be finalized before start of construction.
Revised discharge permit granted
Nordic Mining is continuously investigating measures to minimize the environmental impact of the Engebø project. In June 2020, the Company submitted, after extensive test work proving that the consumption of chemicals could be reduced by 99%, an application to the Environment Agency for substitution of chemicals from the original discharge permit of 2015. In January 2021, the Agency granted the revised discharge permit, commenting that the significant reduction in chemical consumption will have lower impact on the environment than the previous planned consumption.
Operating license completes the main regulatory permits for the project
In June 2020, the Directorate of Mining granted the operating license for the Engebø project. The license is granted for the life of mine of the project which includes an open pit and underground phase. The operating license completes the main regulatory permits for the project.
The Directorate’s decision was appealed by various stakeholders. In November 2020, the Directorate confirmed that the appeals received do not provide any basis to revoke or change the decision. The matter has therefore been forwarded to the Ministry of Trade, Industry and Fisheries for final confirmation.
Long-term market fundamentals supportive for Engebø
The market outlook for rutile and garnet remains uncertain in the short to medium term with reduced economic activity as result of the Covid-pandemic. In the longer-term, the economic fundamentals for rutile remain solid with global supply expected to decrease as rutile deposits are depleted, and at the same time demand is expected to increase driven by value and importance for industrial processes and applications. The average rutile price in 2020 is reported to be around USD 1,220 per tonne (FOB), which is around USD 80 per tonne higher than the long-term price used in the DFS from January 2020.
The garnet demand in 2020 was impacted by reduced economic activity and lower oil price. Prices to end-customers in the main markets in Europe and USA are to a large extent reported to remain relatively unaffected, despite demand having contracted. The existing main producers of garnet are in Australia, China, India and South-Africa, with no production in Europe. In the USA, domestic production is significantly short of the demand. Various garnet buyers have indicated that long-term supply of high-quality garnet from Europe is important for supply security and efficient logistics. Nordic Mining has provided garnet samples for testing and is continuing constructive discussions with potential customers for long-term offtake agreements.
Oslo, 16 February 2021
Nordic Mining ASA
Nordic Mining ASA (
Nordic Mining ASA (“Nordic Mining” or the “Company”) is a resource company with focus on high-end industrial minerals and metals. The Company’s project portfolio is of high international standard and holds significant economic potential. The Company’s assets are in the Nordic region.
Nordic Mining is undertaking a large-scale project development at Engebø on the west coast of Norway where the Company has rights and permits to a substantial eclogite deposit with rutile and garnet. Nordic Mining also holds 16.3% of the shares in Keliber Oy, which is developing a lithium project in Finland to become the first European producer of battery grade lithium hydroxide.
In addition, Nordic Mining holds interests in other initiatives at various stages of development. This includes patented rights for a new technology for production of alumina and exploration of seabed minerals.
Nordic Mining is listed on Euronext Expand Oslo with ticker symbol “NOM”.