Kallak Update

RNS Number : 8103A

Beowulf Mining PLC

07 February 2022

 

7 February 2022

Beowulf Mining plc

("Beowulf" or the "Company")

Kallak Update

Beowulf (AIM: BEM; Spotlight: BEO), the mineral exploration and development company, informs shareholders that the Company has been given the opportunity to comment on statements received by the Government in respect of the Company's application (the "Application") for an Exploitation Concession for the Kallak North Iron Ore Project ("Kallak").

The Company has been given a deadline of 14 February 2022 and, in line with the Minister of Enterprise and Innovation's (the "Minister") comments in the Swedish media, is hopeful, that having all the information he needs, the Minister is fully appraised of the facts and the Government can finally decide on the Company's Application.

In this update, the Company summarises key information in response to the significant mainstream media and social media interest regarding the Company's Application; to clarify facts and challenge certain misinformation that has been published, while building a foundation for constructive and inclusive dialogue with our key stakeholders, including those who want the Kallak mine to go ahead and those who do not.

Beowulf has been listed in Sweden since 2008. The Company is over 75 per cent owned by Swedish shareholders trading on the Spotlight Exchange.  As a listed Company in Sweden, and the UK, when making disclosures to the markets and investors, technical and financial information, the Company's reports and announcements comply with industry codes, standards and market rules. In addition the Company's Directors have specific legal and fiduciary duties.

Much has changed during the nearly nine years since the Company submitted its Application in April 2013, the presence of the Climate Emergency in our daily lives, and in Norrbotten the rapidly developing market opportunities for fossil-free steel making and the demand for high quality iron ore in both innovative and traditional steel making processes, in Sweden and Europe; the drive to remove CO₂ from the steel production equation, improving energy efficiency, minimizing waste and the impact of waste disposal, for which Kallak's market-leading 71.5 per cent iron magnetite concentrate is ideally suited.  When it comes to mining in the north of Sweden, mines can effectively be plugged into the renewable electricity grid, and use hydrogen also produced from renewables to power mobile equipment.

Sustainability, short and secure supply chains of primary raw materials, and, in this context, the need for mines to supply regional manufacturers and thereby meet society's needs are critical to achieving the transition to a Green Economy.  Sweden can lead the global mining sector's efforts and demonstrate how mining can be done in balance with the environment and stakeholder interests for the benefit of wider society.

Kurt Budge, Chief Executive Officer of Beowulf, commented:

"Since I became CEO of Beowulf Mining plc in October 2014, the Company has worked to meet the expectations of its diverse stakeholders and conscientiously address any specific issues with our application.

"The Company's application is comprehensive and satisfies the requirements of the prescribed application process for an Exploitation Concession. Where specific problems have been identified, we have fixed them, such as, in November 2014, eliminating the proposed transport route through the Jelka-Rimakåbbå Natura 2000 area and potential impacts on reindeer husbandry.

"The future conditions for mining and reindeer husbandry to coexist at Kallak are possible, learning from local sameby, their knowledge, and from the many examples across Sweden where coexistence is a reality.  The Company is committed to doing all it can to achieve this, through preventative and precautionary action and compensation deemed necessary.  

"The 2013 Area of National Interest designation by the Swedish Geological Survey confirmed the importance of the Kallak deposits as a valuable source of materials, both nationally and for the EU.  I am genuinely excited that Beowulf now has the opportunity to be part of a fossil-free steelmaking supply chain in Norrbotten.

"To date, iron mineralisation of up to 389 million tonnes has been defined in the Kallak area, which could significantly extend Kallak North's production life and give Norrbotten's fossil-free steel producers an alternative source of high-quality iron ore for decades to come.  

"With Kallak, we have the opportunity to build the most sustainable mine possible. I firmly believe that there is no better country than Sweden in which to make this vision a reality, and where mining can take place in balance with the environment and stakeholder interests for the benefit of wider society.

"Following our guiding principles, Beowulf seeks to build mutually respectful relations and productive partnerships with Jokkmokks Kommun, local entrepreneurs, landowners and reindeer herders. The Beowulf team is looking forward to establishing our proposed 'Task Force' with the municipality, local agencies and enterprises, to help build local capacities and to maximise local economic opportunities during Kallak's development, construction and when the mine is in operation.

"As we hopefully move onto the next stage of Kallak's development, the Company remains committed to working constructively - and in good faith - with all stakeholders and engaging in meaningful dialogue. I believe there is space for us all to be part of Jokkmokk's future, one that is sustainable, diversified and thriving. Beowulf is planning for that future."

Kallak discovered by the Swedish Geological Survey  

The Kallak deposits and iron mineralisation in the area has been known to exist since the 1940s. It was first investigated by the Swedish Geological Survey ("SGU", a Government Office) during 1948, with seven diamond drillholes completed. The SGU returned and investigated the area again in the early 1970s, then with six new drillholes. Comprehensive ground geophysical surveys were carried out in connection to these two exploration campaigns. 

Kallak designated an Area of National Interest by the SGU

In February 2013, the Kallak deposits were designated an Area of National Interest for minerals ("ANI" or the "Designation") by the SGU. 

Jokkmokk Iron Mines AB ("JIMAB"), the Company's wholly owned Swedish subsidiary which had been working on Kallak since 2006, was formally notified of the Designation by the SGU, in accordance with Chapter 3, Section 7 of the Swedish Environmental Code, following its consultation process with the requisite local government authorities.

Chapter 3, Section 7, second paragraph of the Environmental Code states that 'areas containing deposits of valuable substances or materials that are of national interest shall be protected against measures that may be prejudicial to their extraction. Within such areas, municipalities and central government agencies may not plan for or authorise activities that might prevent or be prejudicial to the exploitation of mineral resources' ( https://www.sgu.se/en/mineral-resources/legislation/mineral-deposits-of-national-interest/ ).

In assessing and defining mineral deposits as being of national interest, the SGU considers the importance of a deposit on the basis of, inter alia, its strategic value, the quality of its documentation, whether it represents a unique natural asset with special properties and socio-economic importance from a long-term perspective.

In its 2013 decision on the Kallak deposits, the SGU observed, inter alia, that "Sweden is currently the largest producer of iron ore in the EU. During 2012, over 26 million tonnes of iron ore was produced in Sweden from four mines. The demand for iron ore and iron ore products is great and iron ore extraction creates over 3,300 jobs directly and more than 10,000 indirectly. Currently however, there are only a few iron ore deposits in Sweden that can be classed as economically viable for mining while the general need is expected to continue to be great. The medium sized deposits which are currently being extracted (except for Kiruna) have a lifespan of 15 to 20 years which is why SGU considers it important to ensure long term availability of ore…SGU considers the Kallak deposits to be well documented and that they contain good levels of iron. The area is important from a material supply perspective and of importance to the mining industry on a national basis."

Thus, mining the Kallak deposits was considered to be of national interest, to ensure the continued availability of iron ore, an important foundation of the Swedish economy, and secure supply of critical primary raw materials for the nation and EU. Today, there is added importance, given Kallak's role in ensuring the integrity of Sweden's rapidly developing fossil-free steel supply chain in Norrbotten.

On 7 July 2015, the County Administrative Board for the County of Norrbotten (the "CAB") stated that there were no conflicts within the Concession Area where national interests are considered, as the Concession area is designated as an ANI for minerals. No other national interests were identified.

Reindeer Herding

The Kallak project is located in an area where reindeer herding is practiced by two sameby, Jåhkågaska tjiellde ("Jåhkågaska") and Sirges.

Before February 2017, when an overlapping area was designated an Area of National Interest for reindeer herding by the Sametinget, there were no conflicting national interests for the Concession Area, or for those areas taken by operational facilities necessary to support mining. 

Reindeer herding is not a static activity, and the importance of any specific area varies from year to year.  Therefore, in preparing its application the Company has been careful in its analyses to consider the proposed mine's potential impacts on Jåhkågaska reindeer herding activities in their totality, whatever the designation of any specific land area may be. The 2017 ANI Designation therefore did not change anything in the Company's assessment of the potential impacts on reindeer herding.

Kallak's total area of 13.6 km² represents about 0.5 per cent of Jåhkågaska's available pasture lands of 2,640 km², and Jåhkågaska estimated 4,500 reindeer make up less than 10 per cent of the total number of reindeer that are present in Laponia over some part of the year. When, in October 2014, the CAB provided specific concerns about risks to reindeer herding, the Company immediately took action, eliminating the Jelka-Rimakåbbå transport route from its plans. 

In the future, the Company will work more closely with Jåhkågaska, to learn from them, their annual reindeer herding management plan ("renbruksplan"), such that a joint plan can be made for our respective activities. 

In Sweden, there are solutions in use for how to manage the competing land requirements of mining operations (and other industrial activities) and reindeer herding, and these are being duly considered and assessed by the Company as it seeks to find optimal approaches to coexistence. 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 the Kiruna area where LKAB ( the state-owned Swedish iron ore company) is operating close to the Abisko National Park.  Abisko National Park 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 are no examples in Sweden of a reindeer herding cooperative becoming unsustainable because of mining, while there are examples of reindeer herding and mining coexisting (such as the Abisko case); commercial agreements are made, parties benefit, as do wider stakeholder groups from the ensuing economic development.

In the Kallak application the Company has included preventative, precautionary frameworks, to be developed into management plans in consultation with the reindeer herding communities. At the appropriate time, and when details are available, the Company will engage in meaningful consultation and make definitive agreements.  The Company has also committed to fully compensate Sami villages deemed necessary.

It is reasonable to assume that with a mutually respectful approach, the application of all best available technology and meaningful consultation processes, mining and reindeer herding can coexist at Kallak.

Mineral Resource Estimate ("MRE")

Beowulf began working on Kallak in 2006, when the Company was issued an Exploration Permit by Bergsstaten (the Mining Inspectorate, part of SGU) and has completed 27,895 metres of drilling, including 131 drill holes.

On 25 May 2021, the Company published a 'Mineral Resource Estimate and Exploration Target Upgrade'.  The statements were classified by Competent Person, Howard Baker (FAusIMM(CP)) in accordance with the PERC Standard 2017. The MRE has an effective date of 9 May 2021.

MRE announcement in full: https://polaris.brighterir.com/public/beowulf_mining_plc/news/rns/story/x8q5k9x  

For Kallak North, a Measured and Indicated Resource of 111 million tonnes ("Mt") grading 28 per cent iron ("Fe") content has been defined. With an additional Inferred Resource of 25 Mt grading 28.3 per cent Fe.

For Kallak North and South combined, BGS derived a Measured and Indicated Mineral Resource of 132 Mt grading 27.8 per cent Fe and an Inferred Mineral Resource of 39 Mt grading 27.1 per cent Fe.

In addition to the figures above, exploration targets were reported for Kallak South and the Company's Parkijaure licences.

Market Leading Products

On 17 September 2020, the Company announced the findings of an expert market assessment by Dr. Bo Arvidson, which investigated the market potential of future products from the Kallak deposit, based on the results of laboratory and pilot plant testwork. 

Announcement in full: https://polaris.brighterir.com/public/beowulf_mining_plc/news/rns/story/x8l7kjr  

Highlights of the announcement were as follows:

· Testwork on Kallak ore has produced an exceptionally high-grade magnetite concentrate at 71.5 per cent Fe content 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, 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.

Mine Life

Bergsstaten wrote to the Government and recommended that the Exploitation Concession for Kallak North be granted in a letter dated 9 October 2015.

In January 2018, Bergsstaten remarked to the Government that the mineral resource underlying any Exploitation Concession application is the known part of the mineralisation which makes a mine likely to be economically profitable, such that a Concession can thereby be granted.

Bergsstaten stated that after the start of a mine, further exploration is typically carried out, with the aim of gradually increasing the resource base, thereby extending the production life of a mine.  Additional resources that are found are benefited by the infrastructure and operational facilities that already exist, improving the economic conditions for continued production.

Bergsstaten gave examples of existing mines in Sweden, which have done just this, applying for separate Exploitation Concessions over time, thereby extending their production lives.  These included Boliden's Aitik mine, in operation since 1968, the Garpenberg mine, in operation since the thirteenth century, and the Kristineberg mine, in operation since 1940.

Bergsstaten concluded that while it is not possible to estimate the exact production life of mining at Kallak, Bergsstaten's comments on the potential for the discovery of additional resources, that support an extended production life, as evidenced by other mines in Sweden, should be taken into consideration.

To date, iron mineralisation of up to 389 Mt has been defined in the Kallak area, which could support mining over a 30-40 years' period.

Economic Case

In September 2017, Copenhagen Economics completed a study, titled 'Kallak - A real asset, and a real opportunity to transform Jokkmokk' (the "Study").  The Study built on work carried out, by the Company and others, including the 2015 independent socio-economic study initiated by Jokkmokks Kommun (municipality), completed by consultants, Ramböll 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'.

The socio-economic study initiated by Jokkmokks Kommun concluded that, a mining development at Kallak would create direct and indirect jobs, increase tax revenues and slow down population decline.

Highlights of the Copenhagen Economic's Study 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 jobs as possible 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.

Follow the link below for a Swedish version of the Copenhagen Economics Study:

https://beowulfmining.com/wp-content/uploads/2018/10/Copenhagen-Economics_Presentation_SEP17_Swedish.pdf  

The Company maintains that Kallak is simply a cornerstone on which Jokkmokk can build an economic future, one that is diversified, thriving and sustainable.  In 2019, the Company contributed to the OECD's Rural Policy Review 'Linking the Indigenous Sami People with Regional Development in Sweden' and Beowulf is committed to taking the findings of the report and incorporating them into the development of Kallak.  An example could be enterprise funding for Sami entrepreneurs and SME development, similar to the fund created in collaboration with Jokkmokks Allmänning.

As stated by the CAB on 7 July 2015, in a response to questions from the Government, mining is economically relevant, and 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 Copenhagen Economics Study shows that the influence of mining at Kallak would create economic activity for the Inlandsbanan, regional railways and ports and equipment manufacturers.  Since the Study was completed, fossil-free steel making has come to Norrbotten, completing an ecosystem that can be powered by renewable energy, and creating the conditions for a sustainable and secure supply chain.

Exploitation Concession Application

JIMAB submitted its application for an Exploitation Concession at Kallak North to Bergsstaten in April 2013.  An updated application, revised and expanded, was resubmitted in April 2014, following the CAB's request in late November 2013 for further information and clarification on certain aspects of the Environmental Impact Assessment ("EIA"), a component of JIMAB's original application.

JIMAB added certain supplements to the EIA, along with further technical description and commentary. The enhanced report comprised 164 pages, including various figures and tables, with an additional 16 appendices of more than 200 pages in length covering various technical and specialist aspects based on work performed by the Company's expert team of Swedish consultants.  The EIA was supplemented in the following principal areas:

· The reindeer husbandry section was complemented by further analysis commissioned from consultants Swedish Geological AB.  It was also supplemented and revised based on certain comments and information received from the local Sami villages.

· Additional investigations regarding safety aspects for hydroelectric power dams were conducted by Ramboll Sweden AB.

· Questions raised regarding security issues surrounding any tailings dams for the project were further investigated and addressed by Tailings Consultants Scandinavia AB.

· Various comments received on the socio-economic aspects were responded to by Luleå University of Technology.

· Additional investigations concerning local hunting and fishing activity and specialist environmental aspects, including water ecology and water chemistry, were conducted by Pelagia Miljökonsult AB.

· Additional information was gathered regarding Areas of National Interest and other interests of importance in respect of general water management and military defence aspects.

· Additional studies and inventories on the existing natural water sources in the project area were compiled by Hifab International AB, together with reports on dust and air quality issues.

· Further information was obtained on the Laponia World Heritage site, as well as on the general tourism industry in the Jokkmokk region sourced from the Destination Jokkmokk organisation.

The methodologies utilised in the enhanced EIA report were generally developed and conducted in accordance with the comments received from the CAB and reflected the feedback from a constructive meeting held with representatives of the Norrbotten County authorities in March 2014.

In October 2014, the County Administrative Board stated that it considered the EIA to be sufficient, however, it believed that the effects of the possible transport routes from the future mine through areas used for reindeer husbandry and the Laponia area, could be detrimental for these areas and that the Exploitation Concession should therefore not be granted by the Mining Inspectorate at this time.

In response to the CAB's concerns, the Company, in November 2014, eliminated proposed transport routes in a north/north-easterly direction through the Jelka-Rimakåbbå Natura 2000 area, to ensure that future transport routes would not lead to a significant impact on reindeer husbandry.

On 7 July 2015, the CAB published their response to the Government's request for comments on the national economic assessment of Kallak North.  The CAB stated in their response that 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. 

Bergsstaten wrote to the Government and recommended that the Exploitation Concession for Kallak North be granted in a letter dated 9 October 2015.

On 30 November 2017, the CAB made a further statement, which presented factually incorrect analysis and contradicted its July 2015 statement.

The CAB argued that the estimated 14-year production life of Kallak North, as included in the original application, is of such short duration, that it does not justify Government investment in infrastructure, it does not support a socio-economic case, and it is not a reasonable use of natural resources.  In addition, given the 14-year production life, the CAB views reindeer herding as the best use of land.  Finally, that risks to the World Heritage Status of Laponia remain unclear.

In January 2018, Bergsstaten remarked to the Government that the CAB's assessment of which national interest should take precedence under Chapter 3 of the Environmental Code, was predominantly based on the CAB's assumption of an estimated 14-year production life for the mine.  Bergsstaten stated that the mineral resource underlying any Exploitation Concession application is only the known part of the mineralisation which makes a mine likely to be economically profitable, such that a Concession can thereby be granted.

Bergsstaten concluded that while it is not possible to estimate the exact production life of mining at Kallak, Bergsstaten's comments on the potential for the discovery of additional resources, that support an extended production life, as evidenced by other mines in Sweden, should be taken into consideration.

In its November 2017 statement, the CAB asserted that the Government may have to invest in infrastructure to facilitate a mine at Kallak, and by using a 14-year mine life the CAB states that there is no case to support this.  The Company has never suggested that the Government needs to invest in infrastructure associated with Kallak.  It continues to be the case, that potential infrastructure partners, Inlandsbanan and the Port of Luleå, and others in the region, LKAB and Trafikverket when considering the Malmbanan, have their own expansion and investment plans.

Regarding reindeer herding, the CAB ignored the fact that the Company addressed its October 2014 concern regarding a transport issue outside of the Concession Area being applied for, eliminating the proposed Jelka-Rimakåbbå route. The CAB gave precedence to the national interest for reindeer herding, despite the pre-existence of an ANI for minerals and the Company's work and investment since 2006.  

In July 2015, the CAB stated that there were no conflicts within the Concession Area where national interests are considered, as the Concession area is designated as an ANI for minerals. No other national interests were identified.  In its November 2017 statement, the CAB made no mention of this fact.

In November 2019, the Company submitted a concluding statement (the "Statement") to the Government.  The purpose of the Statement was not to submit any new facts in the Kallak case, as all necessary and relevant facts had already been established as part of the application process. Rather, the Statement summarised the circumstances relevant to a judicial review of whether Beowulf should be awarded the Exploitation Concession for Kallak North.

The Statement stressed that, as has previously been demonstrated by the Company, and acknowledged by the CAB, the establishment of a mine at Kallak would have significant positive effects on the local economy: creating jobs, generating tax revenues for Jokkmokk municipality, and stimulating and diversifying the business sector in Jokkmokk. In so doing, Kallak would help solve the continuing problems Jokkmokk is facing, a lack of investment in new enterprise and job creation, and a declining and ageing population, which is putting a burden on Jokkmokks Kommun it cannot afford.

The Statement noted that none of the Company's assessments had concluded that mining operations at Kallak would threaten the existence and livelihoods of local reindeer herding communities. Furthermore, the Statement highlighted the similarities between Kallak and available case law, which support the approval of the Concession.

Follow the link below for the Statement in Swedish:

https://beowulfmining.com/wp-content/uploads/2022/02/Yttrande-2019-11-08.pdf  

Laponian World Heritage Site

The planned mine at Kallak is not located within 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 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 km². Laponia covers 9,400 km². The planned mine is 0.14 per cent 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.

At the end of August 2021, the Company wrote to the Government and made the following points:

· The Company's application is comprehensive for this stage of permitting, and the assessment of it, by relevant authorities, is complete;

· There are no direct effects of Kallak on the Laponian Area ("Laponia");

· The potential indirect effects are limited and will be dealt by the Courts in the environmental permitting process, of which ICOMOS (International Council on Monuments and Sites) is seemingly unaware;

· The fact that other, already operating, mines are situated closer to Laponia than Kallak proves that mining does already exist without harming Laponia's Outstanding Universal Values;

· The fact that UNESCO has not, at any time, indicated the requirement for a 'buffer zone' around the boundary of Laponia proves that a 'buffer zone' has not been deemed necessary;

· The fact that the Company has already committed to take precautionary measures that will minimize the impact on reindeer husbandry and commits to fully compensate Sami villages; and

· The possibility for the Government to ascertain that this commitment becomes a precondition for the granting of the Exploitation Concession.

Iron Ore Market, Fossil-Free Steelmaking & Mining in the North of Sweden

In 2019, Sweden accounted for 92 per cent of the EU's iron ore production and produced 29 Mt of saleable iron ore products (Source: SGU).

In 2021, iron ore prices reached decade highs of over $200 per tonne for the benchmark 62 per cent Fe product. Kallak's 71.5 per cent product would attract a significant price premium due to its market-leading attributes, higher-grade and purity.

In recent years, there has been an emergence of fossil-free steelmaking in Norrbotten, able to leverage the County's natural resources, renewable power generation and mining assets.  LKAB is part of the consortium developing HYBRIT and, in early 2021, H2GreenSteel emerged as a new entrant. Both projects will demand high quality iron ore feed and Kallak is part of a diverse, sustainable and secure supply chain for the future. The SGU recognised Kallak's importance as such when designating it an ANI in 2013, "[Kallak] is important from a material supply perspective and of importance to the mining industry on a national basis".

In November 2020, LKAB announced plans to invest SEK 400 billion over 20 years into carbon-free iron ore and Göran Persson, the former Swedish prime minister and LKAB chairman, described it as "a risk, yes" but also an opportunity to secure the future of mining in the Swedish Arctic.

On 27 October 2021, LKAB, the state-owned iron ore company announced that operating cash flow was the highest ever for a single quarter, putting the company in a stronger position from which to lead the transition of the iron and steel industry towards a sustainable future.  However, Jan Moström, President and CEO of LKAB commented:

"The permit processes are the single greatest challenge to our operations and, by extension, to Sweden achieving its climate goals. We see a need to get these right so that they really deliver the increased environmental and social benefit which is crucial for the entire transformation and all the investments we are planning for."

Enquiries:

Beowulf Mining plc
Kurt Budge, Chief Executive Officer	Tel: [phone]
SP Angel (Nominated Adviser & Broker)
Ewan Leggat / Stuart Gledhill / Adam Cowl	Tel: [phone]
Blytheweigh
Tim Blythe / Megan Ray	Tel: [phone]

 

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