Beowulf Regulatory News (BEM)

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17 December 2020

Beowulf Mining plc

("Beowulf" or the "Company")

Letter to the Swedish Government regarding the Kallak Iron Ore Project and Unesco consultation

Beowulf (AIM: BEM; Spotlight: BEO), the mineral exploration and development company, announces that Kurt Budge, CEO, has written to the Swedish Government regarding the Kallak Iron Ore Project and Unesco consultation.

A copy of the letter is shown below:

To:

Mr P Stagnell

Regeringen

(Näringsdepartementet)

Sent by email

15 December 2020

Dear Mr Stagnell,

Re: Unesco consultation regarding the Kallak Iron Ore Project ("Kallak")

I write on behalf of Jokkmokk Iron Mines AB ("JIMAB") regarding the Unesco review process by ICOMOS International ("ICOMOS") and IUCN of the planned Kallak mine and the conservation of the World Heritage Property 'Laponian Area' or Laponia. JIMAB is a wholly owned subsidiary of Beowulf Mining plc.

To ensure Unesco has the best possible knowledge of the circumstances in the case for establishing a sustainable mining operation at Kallak, we hereby provide you and Unesco with some further information.

We understand that Unesco has recently received a copy of the Heritage Impact Assessment ("HIA") for Kallak which was completed and submitted to Bergsstaten (the "Mining Inspectorate") in April 2017.

We would like to make some clarifications due to previous communication in the case and hope these are helpful to Unesco. We request that a copy of this letter is forwarded to Dr Mechtild Rössler at Unesco's Culture Sector, World Heritage Centre.

Timeline, previous consultation and comments

In October 2015, the Mining Inspectorate recommended to the Government that the Exploitation Concession for Kallak be awarded. Länsstyrelsen Norrbotten (the "CAB") had previously supported the economic case for Kallak.

Comments were received from ICOMOS and IUCN in February 2016, and from Naturvårdsverket ("NV") and Riksantivarieämbetet ("RAÄ") in March 2017. NV and RAÄ confirmed that Kallak would have no direct impact on Laponia.

The Company appointed independent consultants to conduct a HIA and this was completed in April 2017. The previous comments were therefore made before a HIA had been carried out. The HIA was submitted to the Mining Inspectorate and for more than 3.5 years the Company has not received any feedback on it from NV, RAÄ, or any other party. The HIA remains valid.

Operational Guidelines of the World Heritage Convention and their relevance to this case

We would like to clarify that the planned mine is not located within Laponia. Section 172 of the Operational Guidelines for the Implementation of the World Heritage Convention (the "Guidelines"), referred to in correspondence between 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."

Since the planned mine is not located within Laponia, the States Parties, in this case the Government, are not expected to inform the World Heritage Committee. 

Furthermore, the planned mine at Kallak covers an area of 13.6 square kilometres and not 80 square kilometres, as IUCN stated in 2016. Laponia covers 9,400 square kilometres. The planned mine is 0.14% in comparison to the area covered by Laponia.

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. 

Also, it would seem unreasonable to suggest that Kallak is a 'proposed intervention'. There is no definition in the Guidelines for what constitutes a 'proposed intervention'. The only definition that the Company has found is as follows:

"An intervention is any action, other than demolition or destruction, that results in a physical change to an element of a historic place." Source: Definition from the Standards and Guidelines for the Conservation of Historic Places in Canada.

As the planned mine is not within Laponia, nor in in its immediate vicinity, it is apparent that the mine's development will not result in such a 'physical change' of Laponia as stated in Section 111 of the Guidelines. 

With reference to the Guidelines, it is apparent that a HIA for the development of Kallak is not required. Voluntarily, in response to the comments made by ICOMOS and IUCN in 2016 and NV and RAÄ in 2017, the Company engaged independent consultants to produce a HIA. 

The HIA was submitted to the Mining Inspectorate in April 2017 and for more than 3.5 years the Company has not received any feedback on it from NV, RAÄ, or any other party. The HIA remains valid.

Environmental Permitting

When it comes to the transports from a future mine, which could cause indirect effects on Laponia, it is important to point out the following facts.

The Exploitation Concession, which is in question, only gives the Company the right to exploit the mining area. The environmental conditions for the planned operation will be set in a later permitting process by the Environmental Court, in accordance with the Environmental Code.

The transport solution from the mine to the Inlandsbanan railway has not been finalised, but is likely to follow existing routes and will be designed and engineered to minimise environmental impacts. The impacts of transport and necessary measures to eliminate, reduce, mitigate and compensate for such impacts will be developed in partnership with the community, including reindeer herders. 

It is worth noting that the Inlandsbanan railway is looking to build its business and considers Kallak as a future customer. The railway would enable production from Kallak to travel either north or south. Both JIMAB and the Inlandsbanan are seeking to implement fossil-free transport solutions in their plans. The development of the railway, as a sustainable means of transport, will benefit Jokkmokk and the region.

Given that transport is addressed by the Environmental Court and does not form part of the decision making process for an Exploitation Concession, it is premature and outside the norm for it to be raised as an issue at this time and in this case.

Despite the above, in November 2014, the Company eliminated the Jelka-Rimakåbbå transport corridor from its plans, responding to the concerns of the CAB about possible impacts on reindeer herding. No further specific comments regarding transport have been received during the last six years.

The coexistence of mining and reindeer herding

Reindeer herding is not a static activity and the importance of any specific area varies from year to year. Reindeer migrate over an area, so their presence on and around Kallak is days in the year and not permanent. The Company has been careful in its analyses to consider the proposed mine's potential impacts on Jåhkågaska tjiellde's ("Jåhkågaska") reindeer herding activities in their totality.

As the Company moves forward with the project, we will work more closely with Jåhkågaska, to learn from their annual reindeer herding management plan ("renbruksplan"), such that we can plan together our mutual activities. Kallak represents only about 0.5 per cent of Jåhkågaska's available pasture lands, and Jåhkågaska's 4,500 reindeer make up less than ten per cent of the total number of reindeer that are present in Laponia over some part of the year.

It is an established fact that there are solutions for how to manage the competing land requirements of mining operations (and other industrial activities) and reindeer herding.

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 LKAB-Kiruna-Abisko National Park area. Abisko 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 is no example in Sweden of a reindeer herding coop becoming unsustainable because of mining, while there are many examples of reindeer herding and mining coexisting.

Concluding statements

The Company voluntarily prepared a HIA, despite the Guidelines suggesting one is not required in this case, to give confidence to stakeholders in the Kallak project that a mining operation can be developed in a responsible and sustainable manner, and in partnership with the community.

The Company maintains that its application is comprehensive and, as stated previously, the future development of Kallak will be appropriately controlled by the Environmental Court.

To get to this point in time, the Company has been working on the project for over 14 years, since the first exploration licence was granted in 2006, and has invested SEK 80 million, defining an iron ore resource that could feed the Country's ambitions to manufacture high quality fossil-free steel. 

The Kallak project could transform the economic future of Jokkmokk municipality, creating over 550 jobs for decades to come, and create much needed diversification in the local economy, ensuring the sustainability of public services and infrastructure in the municipality on which the inhabitants employed in other sectors, such as tourism and reindeer herding, rely. 

Through no fault of its own, we hope Unesco understands the unacceptable delay to a decision being taken on the Company's Kallak application and that any assessment of the facts, in accordance with the Guidelines, can be swiftly concluded. We remain open to assisting Unesco, as required.

Kind regards,

Kurt Budge, CEO & Director Beowulf Mining plc

Copy:

Ms Carin Lundberg, Regeringen Näringsdepartementet

Sven Otto Littorin, Chairman & Director, Beowulf Mining plc

Magnus Fröberg, Advokat, Fröberg & Lundholm Advokatbyrå AB

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