Australia has the right mix of metals to be a leader in the electric vehicle rush, but Sweden has an equally good mineral mix and a better location for access to the world’s leading car makers which is why it appeals to an increasing number of ASX-listed explorers.
Talga Group (ASX: TLG), which has its foot on a world-class graphite deposit, was one of the early Australian movers to stake a claim in Sweden, attracted by the geology, deep mining culture, and direct access to the rapidly electrifying German car industry.
More Australian explorers are likely to join the Swedish mineral hunt and will be hoping for greater success than past attempts to master the complexities of doing business in a foreign country.
Few players in earlier waves of Aussie miners making the long trek to the home of Abba and Ikea made the fortunes they were seeking, possibly because they were focused on “old” minerals such as the zinc which drew North Ltd – before it was acquired by Rio Tinto (ASX: RIO) – to the historic Zinkgruvan mine which has been in continuous operation since 1857.
Important as zinc is in many industrial applications, it is very much one of yesterday’s metals, and the same can be said of the iron ore mined in northern Sweden around the town of Kiruna since 1900 with its current claim to fame being the world’s biggest underground iron ore operation and the site of a nearby “ice hotel”.
The current attraction of Sweden to Australian miners is the combination of location and a 1,000-year history of supplying Europe with minerals, including the metals undergoing a revival thanks to energy transition revival such as copper, nickel, and graphite.
There are other reasons for Sweden enjoying a revival among Australian explorers, including a shared geology with the wider Scandinavian region hosting a range of rock types familiar to Australian geologists, and the attraction of doing business in an environment which is safe in both legal and personal terms, unlike much of Africa and South America.
Graphite potential in the north
The three companies chosen for this look at the revival of interest among Australian small caps are at different stages of evolution.
The most advanced in terms of production is Talga. While lithium, used as a cathode in batteries, has been the primary interest of most small miners looking for a way into the battery business, this company chose to focus on the anode side of energy storage, where graphite performs best.
Northern Sweden, which has long been recognised for its graphite deposits, is where Talga is developing a mining and mineral processing operation which aims to supply Europe’s battery makers with high quality anode material.
The starting point for Talga is the Vittangi graphite structure close to the iron ore mines at Kiruna with the plan being to rail mined material to a processing centre at the port of Lulea at the top end of the Baltic, where low temperatures and abundant cheap electricity have attracted high-tech companies such as Facebook for data storage facilities.
Talga is also travelling down the tech road with a range of advanced “green graphite anode” products which is being marketed to battery makers and car producers in Germany, along with a product development centre at Cambridge in Britain where a high-tech form of graphite called graphene was invented.
Talga has also returned to its exploration roots by launching a program to expand its graphite resource base.
While not a star performer this year with a share price which has dropped by 30% to $1.31, Talga has attracted a number of high-powered Australian and European investors who believe in the well-proven business plan of supplying Swedish minerals to the rest of Europe.
Swedish precious metal plays
A promising silver discovery near the historic (and prolific) mining centre of Sala in central Sweden jolted Alicanto’s share price last month effectively doubling the stock from $0.11 to $0.20.
Assays are pending but the first of two diamond drill holes returned broad zones of mineralisation traditionally seen in the Sala mine, which closed in 1964 after producing 200 million ounces of silver at an average grade of 1,244 grams per tonne, starting in the 15th century.
Limited exploration has been conducted in and around the historic mine, largely because of a belief that the orebody did not extend below 320m, a theory which Alicanto is now testing.
While silver has caught the eye of Australian investors with an interest in precious metals, the primary target of Alicanto is the Greater Falun copper and gold project about 100km to the north-west of Sala.
Closed in 1992, the Falun mine produced 28 million tonnes of high-grade copper-gold ore over an estimated 1,000 years of production.
Alicanto’s plan is to test new targets as well as look for extensions to known orebodies in a region known for its “skarn” style mineralisation which is generally high-grade and formed after a volcanic intrusion forces its way into limestone or dolomite.
The hunt for “Falun 2” has revealed mineralisation in all targets drilled so far with a bonanza lode possible as geological knowledge grows and drilling continues.
Significant copper and nickel discovery
It’s been the best part of a decade in the making but Ragnar (formerly known as Drake Resources) appears to have made a significant discovery at its Granmuren project about 20km west of Alicanto’s Sala silver discovery.
In what can be seen as a comment on the richly mineralised nature of Sweden’s geology, the Ragnar find is the Tullsta copper and nickel bearing structure which first came to notice in 2012 when near-surface mineralisation was detected in a helicopter-borne magnetic survey.
Last month a sniff of what might have been found at Tullsta rekindled interest in Ragnar with early interpretation of drill core revealing zones of copper (and nickel) rich mineralisation which, even without assays at the time, more than doubled the share price from $0.03 to $0.08.
First assays of that core came through earlier this week and while encouraging, they only produced a modest share price reaction, perhaps because of the relatively low grade and depth of a 60.2m mineralised zone starting at 498.2m.
Overall, the discovery area assayed 0.75% nickel and 0.47% copper, but included richer sections in five different zones with the upper section returning 7.6m at 2.08% nickel and 1.57% copper.
More assays will follow the four-hole drilling program which should revive interest in Ragnar.