It’s been a busy few weeks for Beowulf Mining (LSE:BEM), which just received a green light from the Swedish government to go ahead with plans for an iron ore mine.
However, the company, which is listed on the AIM market in London and the Spotlight Exchange in Sweden, has a long road ahead as the mine in Kallak has been opposed by indigenous people because of concerns that it would endanger the ecosystem.
Climate activist Greta Thunberg commented on Twitter: “Sweden pretends to be a leader for environment and human rights, but at home they violate indigenous rights and continue waging a war on nature.”
Fridays for Future put out a statement, in which it said that the government was saying “no to indigenous peoples’ rights, environment, climate and our common future” with the approval for the mine.
So what happens next?
Beowulf Mining will need to conduct an environmental study and meet a range of conditions before it can start processing ore. The group’s CEO Kurt Budge said that they plan to “build the most sustainable mine possible”.Despite the controversy, the company’s shares shot up 79% on the day of the announcement to 21p. However, they soon lost much of those gains as it became clear that the environmental study will be a significant hurdle. Still, over one year the group’s shares are up 187.9% and now stand at 11.95p.
Earlier this month Beowulf Mining took a majority stake in Vardar Minerals in Kosova, paying £200,000 for an increase from 49.4% to 51.4%.
But many of Beowulf Mining’s projects are in the early stage of development. Kallak is the group’s most advanced project.
In its annual results, Beowulf reported a consolidated loss of £1.49m over the year, up from a loss of £1.29m in 2020, mainly due to higher administration expenses. At year end the company had a cash position of £3.3m. Back in 2020, the company raised £7.4m in capital to continue to advance its portfolio.
If Beowulf Mining is able to secure the necessary approvals to start processing ore in Kallak it would be a big boost for the business.
How great is the resource at Kallak?
Iron ore is essential in the production of steel and in previous years there have been supply constraints. Previously, the company said Kallak could contain 389 million tonnes of iron mineralisation. This could shore up Europe’s supply of iron ore, as the Russian invasion of Ukraine has put the spotlight on commodity supplies. Together, the two countries account of 8% of global iron ore production. And according to a note from Bank of America, supply disruptions could push the iron ore market into deficit in 2022.
In the annual results, CEO Budge commented: “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.
With Kallak, the company believes 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.”
