SUCCESS CONTINUES FOR GRANGEX
I am pleased and proud to say that the performance of GRANGEX in 2023 has exceeded our expectations so far. In June, the Swedish Land and Environment Court granted permission to restart mining operations at the Dannemora mine. This is a very important milestone in GRANGEX’s development and, thanks to a very fast and efficient court process, we are now well on track with our timetable for restarting the mine in the summer of 2025.
Earlier this year, another milestone was achieved when we signed an agreement with the major UK mining company Anglo American regarding a strategic partnership.
The agreement with Anglo American has secured important funding for Dannemora via a royalty agreement of USD 10 million and a supply agreement with an estimated sales value of approximately SEK 15 billion over 11 years. The supply agreement requires Anglo American to contribute a defined amount in the upcoming plant funding. With Anglo American as a strategic partner and the environmental permit obtained, the implementation risk of the Dannemora project has been significantly reduced.
During the second quarter, we also entered into an exclusive agreement with OMF Fund II H (Orion), an investment fund focused on the mining industry, to acquire Sydvaranger Mining AS.
The planned acquisition of the mine in Sydvaranger, Kirkenes, allows us to restart the production of ultra high-grade iron ore concentrate with a sustainable and commercially sound production. Sydvaranger is Norway’s largest iron ore mine, with a planned nominal capacity of 4 MT per year of high-grade pellet concentrate and mineral reserves that are among the largest in Europe. In addition, the mine has all the necessary permits, which significantly reduces the implementation risk for GRANGEX once we have completed the acquisition.
By acquiring the mine in Sydvaranger, we will take the first step in our communicated consolidation strategy and position GRANGEX as a future Scandinavian supplier of significant volumes of ore concentrates for the green transition of Europe’s steel industry. Market analysts expect an increasing demand for high-quality ore concentrates but a lack of supply. Based on this, I believe that the restart of Dannemora and the upcoming restart of Sydvaranger are well-timed. As a result, Anglo American is involved in both projects as a strategic partner.
The opportunity to acquire the Sydvaranger mine results from the successful development in Dannemora and the credibility that GRANGEX’s project development expertise brings, a testament to our strength as a green mine developer. We see a good chance, as in Dannemora, to adapt the planned new production and ore product to strengthen both climatic and economic sustainability.
In January, the Dannemora project entered the implementation phase. Design work and procurements are now underway. For example, time-critical equipment for water treatment and drainage of the mine has already been ordered. The level of activity in the Dannemora project is high and increasing.
An important part of the phase we are now in concerns the plant funding. Following the announcement of the environmental permit, we are seeing increased interest from potential lenders and have recently received indicative loan funding proposals from several leading European banks. Thanks to our sustainability profile and an ore product adapted to the steel industry’s green transition, there is an increasing interest in us as a company. This is very gratifying, of course, and I look forward with confidence to an exciting autumn.