Kallak North Exploitation Concession Update

Report this content

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations ("MAR") (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of Kurt Budge, Chief Executive Officer. 

6 March 2018

Beowulf (AIM: BEM; AktieTorget: BEO), the mineral exploration and development company, focused on the Kallak magnetite iron ore project and the Åtvidaberg polymetallic exploration licence in Sweden, and its graphite portfolio in Finland, understands the letter written by Kurt Budge, Chief Executive Officer, in response to the Government’s request for final comments in respect of the Company’s application for an Exploitation Concession for the Kallak North Iron Ore Project has been made public. The letter is now attached to this announcement.


Beowulf Mining plc
Kurt Budge, Chief Executive Officer Tel: +44 (0) 20 3771 6993
Cantor Fitzgerald Europe(Nominated Adviser & Broker)
David Porter Tel: +44 (0) 20 7894 7000
Tim Blythe / Megan Ray Tel: +44 (0) 20 7138 3204


Beowulf Mining plc

201 Temple Chambers

                                                                                                                                                3-7 Temple Avenue


                                                                                                                                                EC2Y 0DT            





                                                                                                                                                2 March 2018

Dear Ms. Adlercreutz,

Subject: Bearbetningskoncession Kallak Nr 1 N2017-04553

Thank you for giving Jokkmokk Iron Mines AB, a 100% owned subsidiary of Beowulf Mining plc (“Beowulf” or “the Company”), the opportunity to make final comments to the Government in respect of our application for an Exploitation Concession for the Kallak North Iron Ore Project.

I joined Beowulf in September 2014, having worked in the mining sector for over 20 years, in business development with the multi-national company Rio Tinto, in operations in the UK coal industry, and in banking and private equity. My values are centred around working in partnership with stakeholders and delivering sustainable development. This is what I have done in my career, when managing operations, permitting, and developing new mines.

Since I joined Beowulf, the company has done everything it can to build and strengthen relationships with the community in Jokkmokk, and with regulators and decision makers in Norrbotten and Stockholm. During this time, the mayors of Jokkmokk and Luleå, and entrepreneurs and landowners in Jokkmokk, have voiced their support for the Kallak project. They want companies to come to Jokkmokk and Norrbotten, to invest, to create opportunities for job creation and economic growth; Beowulf has done just that, and I have made it clear that the Company’s approach is to develop Kallak in partnership with local and regional stakeholders, in a responsible and sustainable way, and in harmony with the environment.

The delays and constant waiting for an authority to give an opinion or take a decision on our application have significantly impeded discussions with the Saami. We share the Minister’s view that mining and reindeer herding can coexist, and the Kallak project is no exception, as the evidence shows for existing mines in Sweden. We see many examples in Sweden where agreements have been reached between companies and the Saami, and positive working relationships have been developed; this is the Beowulf’s intention. Despite perceived threats to reindeer herding, studies show that reindeer herding in Sweden is on the increase, and we have found no examples of a cooperative being forced to close because of a new industrial development, not just mining.

Before October 2014, there was good exchange between Länsstyrelsen in Norrbotten and the Company, with questions being asked and answers given on our application. By the autumn of 2014, the Company had drilled almost 28,000 metres at Kallak, and on 28 November 2014 updated its mineral resource statement, including the deposits of Kallak North and Kallak South, indicating the potential for a global tonnage of iron ore mineralisation of circa 250 million tonnes.   To date, Beowulf has invested SEK 77 million in Kallak.

It is widely acknowledged that Länsstyrelsen has consistently failed to follow the prescribed process for assessing an Exploitation Concession application.   Now it writes about the need for State investment in infrastructure to support Kallak; this has never been proposed or suggested by the Company.

In Norrbotten, Inlandsbanan, the Port of Luleå, and LKAB and Trafikverket are all looking at expanding infrastructure capacity. As we tried to demonstrate with the Copenhagen Economics’ project study, titled 'Kallak - A real asset, and a real opportunity to transform Jokkmokk', there is a 'Bigger Picture' positive impact that Kallak can deliver, both in Jokkmokk and Norrbotten, as major projects in the region are interlinked and interdependent.

Mining the Kallak North deposit has the potential to provide around 250 direct jobs and SEK600 million in additional tax revenues to the Municipality of Jokkmokk over 14 years. If the mine life is extended with the Kallak South deposit, then SEK1 billion in additional tax revenues could be generated over 25 years.

A well-engineered plan is essential, so that the local community reaps the benefits of Kallak’s potential, and Beowulf believes that the full potential benefits will only materialise through partnership and collaboration with local and regional stakeholders.

Länsstyrelsen’s latest statement contradicts its July 2015 position, when it supported the economic case for Kallak, then verbally confirmed its support to Bergsstaten for the Company’s application, and Bergsstaten, in October 2015, recommended to the Government that the Concession be awarded. It is based on statements such as this, that Beowulf has continued to invest in Kallak.

Also, in July 2015, Länsstyrelsen acknowledged that there were no conflicting national interests for the Concession Area. This was also the case for those areas taken up by operational facilities necessary to support mining. In February 2013, the SGU designated Kallak an Area of National Interest for its mining potential. Four years later, in February 2017, Sametinget placed national interest for reindeer herding directly on top of the Kallak Concession Area.

Now, Länsstyrelsen gives no consideration for the period when there were no conflicts, and it watched the Company continue to invest in Kallak. It now chooses to build a case around reindeer herding being the most important national interest, but this is based on false arguments. I would suggest that to most observers, the fact that Sametinget asserted national interest for reindeer herding directly on top of the Kallak Concession Area four years after the SGU designation, and late in the application process, would appear nothing but an attempt to obstruct and frustrate our application.

With respect to Laponia, Kallak is 34 kilometres away at its closest point. Existing mines operate in closer proximity and have not threatened Laponia’s World Heritage Status. Naturvårdsverket and Riksantvarieämbetet have confirmed that Kallak will have no direct impact on Laponia.

Laponia's boundary has been established to protect what lies within the boundary, and not to restrict development, such as Kallak, which is located far beyond any conceivable 'buffer zone'.

It is the Company's view that suggesting Kallak could have such an impact on Laponia as to threaten Laponia's World Heritage Status is not a reasonable argument.  The Company's ambition, to develop a modern and sustainable mining operation, in partnership with local stakeholders, protecting all interests, will further ensure that Laponia is unaffected.

The Kallak application and the Company's Heritage Impact Assessment have comprehensively assessed the direct and indirect effects of Kallak on Laponia.  The Company maintains that mining and reindeer herding can prosper side by side, and there should be no material impact on reindeer herding in Laponia, and when it comes to transport, environmental permitting will safeguard the interests of Laponia.

I have never during my previous career, in any country, been involved in a permitting process where the authorities have shown such a lack of willingness to engage with a company on a major application.  The permitting process we have experienced has been inefficient, slow and unpredictable. Our application has been passed back and forth, from one authority to another, with no questions put to the Company, nor feedback given on additional documentation we have provided, nothing.  No authorities have made any attempt to reconcile the differences between the Saami villages and the Company, or to facilitate the discussion that could lead to an understanding between the parties. Instead decision makers choose to sit in isolation, and determine the fate of our application, evidently misrepresenting the facts, and biased in their analysis.

Länsstyrelsen’s actions have so far hindered Beowulf, the Kallak project, and, as commented by industry participants in Sweden and mining analysts in London, are damaging Sweden's reputation as a place to invest and do business.

On 22 February 2018, the Fraser Institute in Canada, published it latest rankings on Investment Attractiveness of mining jurisdictions globally, and Sweden has fallen eight places to 16th. Beowulf did not take part in the survey, but comments from another exploration company included, “Sweden is a stable system; however, there is still room for improvement. Investors have concerns over permit delays, lengthy legal disputes, and inconsistent environmental regulations”.

In January 2017, I spoke in Stockholm on the comparative advantage of doing business in Sweden.  What should be a real advantage to Sweden, is being damaged by uncertain application processes, a distinct lack of respect shown by Swedish authorities for mining companies and their permit applications, scant regard for the significant investments being made and the potential job opportunities being created.  

I heard the Minister speak at SveMin's Höstmöte in Stockholm, at the end of November 2017, about the importance of the mining industry in Sweden, and the problems being experience with permitting new mines.  More recently, I see that the Swedish Government has given SEK10 million to the SGU to explore for ‘Battery Minerals’ in Bergslagen. It may interest the Minister to know, that Beowulf has a portfolio of graphite projects in Finland, which we are actively exploring.

In September 2017, the Minister was quoted in the Swedish media as saying that Swedish law is enough for testing our application, and that the permitting process should be "by the book". 

We hope that the Government now looks objectively at the facts, the Company's investment, its commitment to developing a modern and sustainable mining operation, and the approach we have taken with all our stakeholders in Jokkmokk, including the Saami villages, to develop the Kallak project in partnership with them. We are willing to take all necessary precautions to minimise the impact on reindeer herding and have also several times stated that any eventual remaining impact shall be fully compensated.

In October 2015, Bergsstaten recommended to the Government that an Exploitation Concession be awarded for Kallak Nr 1. Over the last three years, the prescribed process in Sweden for an Exploitation Concession has not changed, we have addressed specific concerns raised by Norrbotten Länsstyrelsen regarding transport, provided supplementary information to demonstrate that mining and reindeer herding can prosper together, and a Heritage Impact Assessment to dispel any concerns about the interaction of Kallak and Laponia.

In Jokkmokk, no other Company has invested SEK77 million and created an opportunity like Kallak, that has the potential to transform the town, and deliver a thriving, diversified and sustainable economy for the people living there.

Kind regards,

Kurt Budge, Chief Executive, Beowulf Mining plc


Dokument & länkar