The Swedish mining company LKAB has signed a non-binding Letter of Intent with Talga and Mitsui with the intent to jointly develop the Talga project in Northern Sweden, according to an LKAB press release last Monday.
Australian-based Talga owns 100 percent of the graphite mining project Vittangi in Kiruna municipality, Northern Sweden. The development plan includes the construction of a facility for producing lithium batteries in North Bothnia.
Mitsui is a global trade and investment company with headquarters in Japan.
Feasibility study coming up
According to Chief Marketing & Communications Officer David Högnelid at LKAB’s special products business area, Talga will conduct and submit a feasibility study prior to the parties’ negotiating ownership and investments.
The detailed feasibility study is expected to be submitted in March 2021.
“We are now three parties having a dialogue and our ambition is to realize this together. Once we have a detailed feasibility study, we can go into more detail about how to do this”, Högnelid says to High North News.
Wants to diversify
LKAB refers to growth in the market for industrial minerals being a “strategic activity to reduce dependency on the iron ore market, which today accounts for some 90 percent of external sales”.
“Reducing this dependency is one of the reasons why we strengthen our industry and mineral activity, Högnelid says.
“We are mainly an iron ore company and right now that market is good. We recently introduced our most recent quarterly report demonstrating solid results; however, we are also affected by external factors such as the dollar exchange rate and the iron ore index, as well as prices on the world market, which we do not control. Thus, we are subject to market fluctuations. It is therefore good for us to have more than one leg to stand on, to deliver to the company.”
The company further states that there is also a clear sustainability-based rationale coupled with the growth ambition, to recycle and upgrade by-products and waste streams.
“Additionally, the growth will be accelerated through selected acquisitions and investments that offer synergies with LKAB’s market, operations and sustainability ambitions. Talga, with its proximity to LKAB’s existing mining operations in Northern Sweden, may offer synergies with resources, skills and infrastructure.”
“Graphite, which Talga works with, is a product classified as a critical raw material by the EU, and we see that there are many potential synergies between our and Talga’s products. Operationally, we have mining near where Talga is planning on operating. We are a major mining actor and there are interests which we want to explore further”, Högnelid adds.
This article was originally published in Norwegian and has been translated by HNN's Elisabeth Bergquist.