Beowulf wants dialogue with Sami but wont take no for an answer!

Published by MAC on 2016-02-07
Source: London Mining Network, Beowulf Mining

Beowulf wants dialogue with Sami but won’t take no for an answer!

By Richard Solly, Co-ordinator, London Mining Network

http://londonminingnetwork.org/2016/02/beowulf-wants-dialogue-with-sami-but-wont-take-no-for-an-answer/

5 February 2016

It was standing room only at the Extraordinary General Meeting (EGM) of Beowulf Mining plc in London this morning. Mind you, it was a very small room. There were only fifteen people there including the company’s board and the registrar, but not enough seats for all of us to sit down.
The purpose of the meeting was to get shareholders to approve two resolutions  which would enable Beowulf to go ahead with acquisition of Finnish graphite company Fennoscandian  and raise enough funds to continue its efforts to begin iron ore mining at Kallak in Sweden.

The Kallak iron ore project is smack in the middle of the area in which indigenous Sami people graze their reindeer. There have been protests against the project in the past  and local Sami have made it clear repeatedly that it threatens their livelihoods.

In December 2011 there was a Sami protest against the company outside the annual ‘Mines and Money’ conference  and the following year two of us from London Mining Network attended the Beowulf AGM to raise concerns on behalf of Sami communities. Sami representatives attended the Beowulf AGM in 2013 to reiterate their opposition to the Kallak project.

So the Swedish Sami National Association asked London Mining Network to attend today’s Beowulf EGM to make clear yet again the level of opposition to the company’s plans. The company’s Notice of Meeting warned that if the proposed resolutions were not passed, the company may breach the terms of the Acquisition Agreement with Fennoscandian and may not be able to fund its proposed upcoming expenditure. No assurance could in that case be given that it could continue as a going concern. Well, frankly, that might be good news from the Sami point of view. So I went along.

The Chairmen of the two Sami villages most affected by the company’s activities and the Swedish Sami National Association had put four specific questions to the company in advance of the meeting. As I went in, company CEO Kurt Budge informed me that he had answered the questions  a couple of hours earlier. In the meeting, he explained what he had done to draw the questions and answers to shareholders’ attention, including posting them on the company’s website.

Now, Kurt Budge struck me as a decent sort of chap (though he has previously been involved with both African Minerals  and Rio Tinto so however decent he may be, he has kept some pretty dodgy company). His predecessor, Clive Sinclair-Poulton, was a colourful character, and his legacy may well not be easy to live with. But despite a marked change of style, Mr Budge is offering precisely the same as Sinclair-Poulton: he wants ‘dialogue’ with the Sami.

Given that the local Sami communities have repeatedly, and vociferously, made clear that they oppose the mine, the only thing to dialogue about, surely, is the manner and timing of the company’s departure? But that’s not what the company is suggesting: it wants a dialogue about how to mine in a way that respects the Sami’s wishes. There’s a bit of a disconnect there. I drew attention to it at the EGM – though it must be as plain as the nose on shareholders’ faces. I quoted the letter that I had received from the Chairmen of the Jåkkågaskka and Sirges Sami communities, Jakob Nygard and Jan Erik Länta, and the Chief Executive of the Swedish Sami National Association, Jenny Wik Karlsson: “Sami communities will never accept a mine and will pursue the issue legally, nationally and internationally.”

The point was not entirely lost on other shareholders. I am 56, and I hope other shareholders will not feel offended if I say that it was clear that I was very, very much younger than most of the others. One of them, sitting in the front row (there were only three rows) said that he had been attending company AGMs for five years now and there was always talk of reindeer wandering through the area and still no official go-ahead for the project. He asked how long it was going to be before iron ore production began. He looked rather glumly round at other shareholders, clearly worried that none of them would see any return on their investment before they were no longer in a position to enjoy it.

Company Chairman Bevan Metcalf and CEO Kurt Budge agreed that if approval was granted by the Swedish government the project could begin producing in four or five years’ time. I am not sure that the questioner was greatly comforted by this. When was the government going to approve it? The point was made that the Finnish graphite mines could be producing profitably much more quickly – in only three or four years’ time. This seemed more welcome news.

Bevan Metcalf attempted an explanation of the delay in approval. The local Jokkmokk municipal council is preoccupied with resettling 5,000 refugees from Syria and elsewhere. The national government is also taken up with the refugee crisis, but is in addition concerned about the difficulties through which the mining industry is passing and the financial problems of a number of small mining companies in Sweden – smaller than Beowulf, that is, so don’t start worrying about that. (Mr Metcalf did not dwell on the catastrophic fall in iron ore prices or the impact of the high production policy of the larger producers, which is driving smaller companies into bankruptcy.) Plus, apparently, there are ‘teething troubles’ between the government coalition partners, the Greens and the Social Democrats.

It was not clear that shareholders accepted this explanation.

When it came to a vote on the resolutions, I was the only person in the room voting against them. There were umpteen million proxy votes in favour as well, so the board got the result it wanted.

After the meeting I got into conversation with Kurt Budge. Like Clive Sinclair-Poulton before him, he was very keen that I should tell my Sami contacts – as he had told them himself – that he wanted dialogue. I recounted the experience of indigenous communities in the Philippines opposing Rio Tinto’s mining plans some years ago. They told colleagues of mine that they felt ‘dialogued to death’ because every time they told the company – very clearly – that they did not, under any circumstances, want mining on their land, the company would ask for further dialogue. And in the end, Rio Tinto pulled out because of the strength of community opposition. A shareholder who was part of this conversation said that the mining project was inevitable and that the Sami would get more out of it if they entered into dialogue and came to a reasonable agreement with the company. I noted, referring once more to the Philippines, that three other massive global mining companies – Anglo American, BHP Billiton and Glencore – had also pulled out of projects in the face of unrelenting community resistance. Corporate victory is not inevitable.

So, we’ll see what happens. At London Mining Network, we will continue to offer our solidarity to our Sami friends in their struggle to control what happens on their land – and they’ve made it pretty clear they don’t want Beowulf’s Kallak project.

You can read more articles about Beowulf Mining and the Sami here.

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Open Letter to the Chairmen of Jåhkågasska and Sirges Sami Villages

Open Letter to the Chairmen of Jåhkågasska and Sirges Sami Villages

Beowulf Mining plc reply

(“Beowulf” or the “Company”)

5 February 2016

Beowulf (AIM: BEM; Aktietorget: BEO), the mineral exploration and development Company focused on the Kallak magnetite iron ore project in northern Sweden and its graphite portfolio in Finland, provides an Open Letter to the Chairmen of Jåhkågasska and Sirges Sami Villages (“Sami Villages”), which are situated in the vicinity of the Kallak project.

The Chairmen of the Sami Villages have asked Beowulf several questions relating to the Company progressing its application for an Exploitation Concession at Kallak; their questions were included in an announcement made on 2 February 2016 by the Svenska Samernas Riksförbund, the Swedish Sami National Association.

Beowulf’s CEO Kurt Budge answers their questions below:

Will the Company continue its plans to develop a mining establishment despite the Sami people’s wishes?

The Company has applied for an Exploitation Concession for Kallak North and is awaiting the decision of the Swedish Government on its application.

The Company intends to continue to invest in the Kallak project. It is an outstanding orebody and the Company has shown it can produce market leading iron concentrates.

The Swedish Geological Society (“SGU”) has recognised Kallak as an Area of National Interest and the Company’s application now has support from the County Administrative Board (“CAB”) for the County of Norrbotten, and the recommendation of the Mining Inspectorate of Sweden.

A mine at Kallak will bring jobs and prosperity to Jokkmokk and the region. Jokkmokk Kommun’s own study in 2015 showed that a mine would create jobs, tax revenues and reduce population decline.

Beowulf wants to involve all local stakeholders in the development of new ideas and the planning of a mine at Kallak. The Company wants to cooperate with all concerned. In October 2014, after hearing of the CAB’s concerns about a specific transport route, the route was eliminated from the development plan for Kallak.

As Beowulf CEO, I have contacted the Chairmen of the Sami Villages, Jan Erik Länta and Jakob Nygård, with the hope of being able to meet them in person, to hear their concerns and objections and to learn more about their reindeer herding business.

How does the Company view its moral and ethical responsibility to the indigenous Sami people?

The Company takes its responsibilities seriously: showing respect for all its stakeholders and listening to their concerns. The Company has a clear ambition to work with local interests in the development of Kallak. We want to become a local partner.

Since my appointment in October 2014, I have made regular trips to Jokkmokk to form a good understanding of what the opportunities and concerns are. I have had meetings with the Municipality of Jokkmokk, as well as other stakeholders who have shown interest in the Kallak project, and as mentioned, I have tried to meet with the Chairmen of the Sami Villages in person.

I have considerable experience in the development, operation, closure, restoration and rehabilitation of mines, and projects that have won awards for high standards of rehabilitation. The only way to do this well, is in close cooperation with the local community: to listen, learn, and take all concerns seriously. Beowulf’s stated ambition is to plan, build and operate a modern and sustainable mine at Kallak. A mining operation that has the minimum possible impact on the environment.

Sweden has a long tradition in mining and there is tremendous innovation and research taking place across all aspects of the mining industry. It is a great opportunity for the Company as much of this research is being championed by Luleå Technical University, situated on our own doorstep. This is very exciting and something the Company wants to be a part of.

Is the Company’s management transparent towards its shareholders regarding its relationship with the Sami people?

Beowulf is transparent with its shareholders and its stakeholders.

The Company looks forward to a continued dialogue with all concerned and hopes that the Chairmen of the Sami Villages have the opportunity to meet with me soon. Mining and reindeer husbandry has historically been able to co-exist in Sweden, and I believe that this is possible with a mine at Kallak.

I would like a meeting with the Chairmen of the Sami Villages to make a proper introduction, and to explain the approach that the Company is taking with regards to the development of Kallak, and share ideas and plans for the future.

Are the shareholders aware that environmental permitting will probably take several years?

Both management and shareholders are aware that the development of a mine at Kallak is a long process. The Company believes in Kallak and has a long-term commitment to Jokkmokk and the region. More than 41 percent of shareholders in Beowulf today are from Sweden.

I have stated that we want to have good cooperation with all those concerned in the community. I am convinced that a sustainable mining operation at Kallak, without negative effects on reindeer herding in the area, is both possible and beneficial to all.

Kurt Budge, Chief Executive Officer of Beowulf, commented:

“We respect all our stakeholders in the communities in and around Kallak, and it is my desire to work with the reindeer herders and the Sami Villages. That is the way I have worked in my career, in cooperation with the communities living around the mines that I have managed, building strong relationships founded on trust.

“Our approach is to develop Kallak in a responsible manner and to become a local partner. Throughout 2015, I listened to and engaged with the community in Jokkmokk, and I hope that a first meeting with the Chairmen of the Sami Villages can be organised in the near future. I would like to find ways in which we can work together.

“Beowulf is ready to continue its investment in Kallak. A company willing to invest and offer potential job creation must surely be viewed as good for Jokkmokk.”

Enquiries:

Beowulf Mining plc
 
Kurt Budge, Chief Executive Officer
Tel: +44 (0) 20 3771 6993
Cantor Fitzgerald Europe

(Nominated Advisor & Joint Broker)
 
Stewart Dickson / Jeremy Stephenson / Phil Davies / Carrie Drummond
Tel: +44 (0) 20 7894 7000
Beaufort Securities Limited

(Joint Broker)
 
Jon Belliss
Tel: +44 (0) 20 7382 8300
Blytheweigh
 
Tim Blythe / Megan Ray
Tel: +44 (0) 20 7138 3204