KNI submits EU Critical Raw Materials application
Our EU critical minerals Investment Kuniko (ASX: KNI) submitted its application for “Strategic Project Status” under EU’s Critical Raw Materials Act.
“Strategic Project Status” is a new term given to projects inside Europe that the EU government see’s as important for security of supply regionally.
Projects that are granted that status are then subject to accelerated permitting timeframes (a set limit of 27 months) and could be eligible for government support when it comes time for project financing.
KNI’s application is for its Ringerike Project in Norway which hosts a ~23 Mt @ 0.31% nickel equivalent JORC resource.
The first set of applications would be reviewed and a decision made by December this year - so we will know the outcome of today’s application before the end of this year.
What “Strategic Project Status” could mean for KNI
IF KNI’s application is successfull it could mean:
- KNI’s project is selected for accelerated permitting - a 27 month timelimit is placed on the permitting for the project. In the EU permitting is usually a big hurdle for mining projects so that certainty would make KNI a lot more attractive for investors/corporates looking for exposure to KNI’s projects.
- Potential access to funding - Strategic Project Status would put KNI ahead of other companies for project funding for “government supported funding opportunities” and “collaboration with EU institutions”.
Context on the EU Critical Raw Materials Act - how KNI fits into the equation
Just recently Europe legislated its own Critical Raw Materials Act.
(Source)
The whole purpose of the act is to diversify away the EU’s reliance on single trade partners for critical raw materials.
Overall, by the year 2030, the Act set the following targets for domestic production:
- at least 10% of the EU’s annual consumption for extraction
- at least 40% of the EU’s annual consumption for processing
- at least 25% of the EU’s annual consumption for recycling
- no more than 65% of the EU’s annual consumption from a single third country
At the moment the EU is very far away from hitting any of those targets across most of the critical raw materials listed in the act.
And the problem is especially bad when it comes to nickel supply…
We think that was a key reason for $74BN capped Stellantis’ investment in KNI.
Stellantis is the world’s fourth largest carmaker and invested $7.8M in KNI at 46.7c per share - well above KNI’s current share price.
Stellantis is KNI’s biggest shareholder holding ~19.4% of the company.
The EV maker is likely well aware that nickel is a major pain point for the EU at the moment.
As one commentator recently put it regarding the bind the EU is in:
(Source)
To hit the targets set out by the Critical Raw Materials Act & for the EU to sure up its supply chains there will need to be new nickel mines coming online inside the EU.
We are hoping KNI can work up its projects and be one of those that are considered for development.
What’s next for KNI?
- 🔄 Commence field work following up on EM survey (ongoing)
- 🔲 Upgrade nickel resource (expected by Q4-2024)
- 🔲 Early stage feasibility studies (start end of 2024)
- 🔄 Outcome of “Strategic Project Status” application (EU Critical Raw Materials Act)
