Beowulf expresses frustration with Swedish government over Kallak

Mineral exploration and development company Beowulf Mining updated the market on its application for an exploitation concession for the Kallak Iron Ore Project on Thursday.

The AIM-traded firm said its chief executive officer had written again to the Minister of Enterprise and Innovation, Ibrahim Baylan.

In the letter, the CEO made a number of points, including that two and a half months had passed without any new information on the situation, since the minister wrote in his letter on 30 September that a decision by the government on Beowulf's application was “forthcoming”.

The CEO had requested that the government provide the company with details on when it could expect the decision on Kallak to be taken.

He also said that it seemed evident that the coalition government had been struggling to reach consensus on Kallak, and that politics were standing in the way of a decision being taken.

The letter noted that the government had told the company previously that Swedish law was “sufficient” for assessing the Kallak application, and that any assessment of Kallak should be “by the book”.

It said that, to ensure that the Government was provided with all relevant facts, the company submitted a concluding statement for Kallak on 8 November, prepared by the law firms Mannheimer Swartling and Fröberg & Lundholm.

The statement summarised all circumstances relevant to a judicial review of whether Beowulf should be awarded the exploitation concession, with the CEO saying the statement demonstrated that the government had sufficient facts for an exploitation concession to be awarded.

Beowulf’s CEO also claimed Sweden's attractiveness as a destination for investments in mining had been decreasing over several years.

Mining analysts and journalists were continuing to comment on the inability of its authorities to decide on mining applications, he claimed, while having allowed companies to explore for minerals and make significant investments.

“The minister's comments at the recent SveMin Höstmöte look to a future when permitting procedures in Sweden are predictable, but they provide no comfort to already committed mining investors and specifically Beowulf's shareholders,” said Beowulf’s CEO Kurt Budge.

“I read yesterday that the minister, in response to a question from a fellow politician, has stated that the starting point for the Government's handling of an application 'is always that it should be done quickly, efficiently and without compromising legal certainty'.

“The government's handling of the Kallak application, since the summer of 2017, has been neither quick nor efficient, and is a 'black cloud' over Beowulf's share price.”

Budge said it made equity fund raising more costly, and was damaging the value of the 64.76% of Beowulf owned by Swedish shareholders and the remainder of the company owned by UK shareholders.

“The legal certainty that the Government seeks is contained within the concluding statement sent by Beowulf to the Government in early November.

“The board has noted Aura Energy's written notification to the Swedish Government under the Energy Charter Treaty seeking compensation over the uranium ban introduced in Sweden on 1 August 2018, and the financial loss to Aura resulting from this decision.”

Budge described that as an example of “the goalposts being moved” after a company had made a significant investment in developing a mineral project.

“In the Kallak case, the Minister has commented on there being 'several different national interests.'

“In the County Administrative Board's assessment in July 2015, it stated that there are no conflicts within the Kallak Concession area where national interests are considered, as the concession area is designated as an Area of National Interest for minerals.

“No other national interests were identified.”

That remained the case until Sametinget placed national interest for reindeer herding directly on top of Kallak in February 2017, 11 years after Beowulf acquired its first exploration licence and had invested the majority of the SEK 80m spent on Kallak.

“As we have repeatedly stated, it is not a case of mining or reindeer herding, as both can prosper, as they already do across Sweden where industry and reindeer herding interact. Kallak will be no different - that is Beowulf's commitment.

“If the government sticks to the facts then the concession should be awarded.

“The Kallak application has been assessed to the absolute limit and there should be no need for further deliberation.”

At 1544 GMT, shares in Beowulf Mining were up 0.98% at 5.18p.