Good morning and welcome, everyone, to this third quarter interim presentation here at Nordic Mining. My name is Ivar Fossum, I'm the CEO of the company. The CFO, Christian Gjerde, should have joined me in this presentation, but he's home with the flu, but he will join us later on for the Q&A session. Let us start. I'll leave the disclaimer video for a second. We will run this session with quite a normal agenda. All the presentation will be recorded and posted on our web, along with all the other material. Please also be informed that you can post your questions while I speak, and we will read them loud in the audience for me to answer at the end of the session.
After the intro, we will start out with the Engebø Rutile and Garnet Project, followed by an update on Keliber and some other developments before we close off with the status of financials. Finally, a Q&A session. First of all, let me draw your attention to the awareness of the climate change that we have seen in recent years, and in particular in recent weeks. I think the whole society around the globe, politicians, and all of us are becoming aware of the need to change, the need to transfer our economy over to a greener society. We see that most of us are becoming aware that in order to enable such transition, we need more minerals, different minerals, and more volume of minerals.
Regardless of recycling, less use, more advanced technology, there is no doubt that we need more supply of minerals. I am glad to see that the new government in Norway also adopts that awareness and has ambitions and focus on the mineral industry in Norway. We have to supply more minerals, but we have to do it in a sustainable way. I am proud to say that Nordic Mining has been a promoter of the Towards Sustainable Mining rating system, which we have adopted from Canada and which is now being rolled out in the Norwegian mineral industry. I will come back to that later in my presentation. Just a quick glance over assets, focusing over core projects in Norway for titanium and in Finland on lithium, but also over positioning with regard to seabed minerals off the coast of Norway, but potentially also internationally.
Today, I also would like to highlight the two R&D projects that Nordic Mining is involved in. First of all, the AltSiKal project, which is 100% funded by the EU through their Horizon 2020 program. Secondly, the NordGBAT project run by NTNU in Trondheim and funded by the Norwegian Research Council. Both of them are good examples on how technology and progress can see and create new avenues for minerals and technology, making completely new value chains, which may replace traditional production of minerals and metals and batteries and other things we need in society. I will come back later and explain more about the AltSiKal project specifically. Just a quick glance of some of the main topics we will touch upon on the presentation today.
First of all, the court ruling a couple of weeks back, the signing of construction agreements, progressing our engineering, a little bit about the retail market, and our adjustment of our fair value assessment of our investment in Keliber. Let's start with Engebø rutile and garnet. I want to highlight the court ruling, which happened a couple of weeks back, which clearly confirmed that the mining rights we have at the whole Engebø deposit are valid. There is now no doubt about, from the court ruling, that there will only be one mining operator at the Engebø deposit, and that will be Nordic Mining. That was a great relief to us, even though the court ruling was as expected. It is also clear that the court ruling and the delay in the final decision from the ministry about the operation license has caused uncertainty and some delay.
I'll come back to that later in the presentation. We are waiting for the final decision from the ministry, which we suppose will come any day soon. The signing of the fixed price agreements with three of four of our EPC partners a couple of days back has been a major milestone for us. EPC1 with Earthworks and Tunneling, with SIPA as the contractor, Åsen & Øvrelid with EPC2 Civil Work and Buildings, and Nordic BOKE with Structural Mechanical Installation and Underground Comminution are very, very important contracts. The signing of these represents a milestone in our cooperation and the kind of execution model that we have established for the Engebø project. We will see the signing of the last one coming soon. We are progressing as we speak also with detailed engineering work, actually work which belongs to the construction package of work.
In many ways, you can see that we have already initiated the construction of Engebø by way of engineering. Finally, I'm also glad to say that we have engaged Mr. Terje Gundersen as Project Director for the Engebø project. Execution of industrial projects is a major task, and we need specialists. Terje has extensive experience from large projects in the oil and gas industry, as well as larger infrastructure projects. We look forward to getting him on board on the owners' team in Femte. This picture indicates a little bit about the engineering work ongoing. This is a sketch from EPC3's engineering work on the comminution unit, which is one of the major buildings at the plant sites. ESG has been a strong value driver for our company and for the Engebø project, and will remain so now throughout construction and throughout the whole operation.
We have pinpoints, as I've told you before, four specific focus areas for our ESG goals for the company. I'd like to follow up this to tell you a little bit more about the Towards Sustainable Mining concept. It is a transparent scorecard or rating system divided in eight specific protocols, which belongs to three different groups: communities and people, environment, and energy efficiency. Each of these eight protocols has, again, specific criteria. This creates a landscape which is covering all aspects of ESG for a mineral project or a mineral operation. Not all of these are equally important for any project. You have to find your heights within this landscape. It represents a major step forward for the mineral industry in Norway, probably also Scandinavia. It has been developed for many, many years in Canada through the Mining Association of Canada.
It will bring consciousness, it will bring awareness, it will bring transparency, it will bring confidence to us as operators, to our shareholders, to our neighbors, to politicians, and all our stakeholders around us. This is a very, very important work. We will report according to this system from day one. That means already next year, where there will be a trial phase for reporting. Gradually, it will be a full-fledged reporting according to this system. I'd just also like to highlight another topic. It's about how things are looked when they are finally built. This is an item that was included in our building permit to the local municipality, showing how we are utilizing the topography and the height differences from the country road and down towards the coastline, where we are able to locate the whole process plant beneath the road level.
There is no doubt we are moving towards a completely fossil-free mining operation. We are currently at an extremely low level. With the pace of technology development that we see within all aspects, there is no doubt that we will get into a completely carbon-free operation at some point in time. What we are discussing internally is how can we cooperate with authorities to facilitate even faster progress towards such a fossil-free operation. Moving over to markets and a few words first about the titanium markets. We saw, as I told you last time, a strong recovery for demand of titanium feedstock into the pigment and metal sector, strongly driven by Asia, and that has continued. It has continued in such a way that producers have not been able to rebuild their inventories for pigment feedstocks. It is still a very firm and tight market.
It also has been impacted by a number of events. It has been unrest in Africa. It has been COVID problems with many operations, in addition to resource depletion at some of the major suppliers. This has led to an adjustment of outlook prices. TZMI focused on a 15% increase for prices next year for rutile, with a long-term outlook price being 10% higher than what we have assumed so far in our projects. It is troublesome for some of the final producers in the value chain. It is very exciting for the supply chain of feedstocks for titanium. On the garnet side, the trade of garnet is still impacted dramatically by the chaotic situation in the freight markets, in particular with regard to container freights and in particular from exports out of Asia.
That has also partly been caused by COVID, with lack of people in the ports, also with the shipping staffing and so forth. We think it will continue for quite another while. We still have not seen the dramatic consequences on pricing, but we will revert back to you and report more about the situation into the next quarters. A brief update about project financing. We are working together with our financial advisors, Clarkson Platou and Sparebanken and Markus, and we are enjoying very positive discussions and processes with strategic investors, both for equity and for debt financing for the projects. We just also finalized and updated ITE review, particularly for the debt financing part of the projects. Having said that, and coming back to my comments on timeline, there is no doubt that progress on further financing is pending over the final decision on the operational license.
We will keep you posted once we are sort of engaging into a clear plan for financing, although we already have kicked off many important activities related to that. I move over to Finland and Keliber. I am sure many of you have noted the movements and the patterns in the trade of lithium and the plans for battery manufacturing. Keliber is progressing, and they have consistently drilled. In the third quarter, they updated their reserves, which have been increased by some 30%. It is now two deposits, which represent over 80% of the total resources for the project, with a mine life of approximately 15 years. It is a major improvement for the Keliber project as such. We also saw in the third quarter that their largest shareholder, South African actor Sibanye Stillwater, invested another EUR 10 million into Keliber, as scheduled according to the shareholders' agreements.
In parallel with all of these activities, the prices for lithium have rallied upwards, as you can see from the graphs, both for lithium hydroxide and also for lithium carbonate. Just in the recent weeks, we have seen that the shape of these curves has slightly begun to flatten out a little bit. This has caused valuation of lithium companies that we can compare Keliber with to rise tremendously. The graph on the curve is a comparison, is a peer group comparison with the hard rock companies such as Keliber being in a similar phase. We see that they have gained a valuation of over 300% in the recent period. That has led also us to have a new look of our fair value assessment of our investment in Keliber, which has been increased by around NOK 70 million, up to almost NOK 200 million.
Finally, I'll say a little bit about other developments, starting with the AltSiKal project. There are two major benefits and interesting aspects we see with this project. First of all, it's about making industrial minerals and products which we need in society from one rock. One ore can bring three different industrial minerals. It's fantastic utilization. To overcome that, you have to develop. You have to find new ways. The AltSiKal project is qualifying a technology where we are consuming CO2 and binding the CO2 in the product through the process. That's another great achievement with this project. It's a four-year project. They have come roughly halfway, and they have documented production of alumina and silica with the right grade and with the right limits of impurities, which are crucial for these products.
They will continue in the project to demonstrate acid regeneration, which is important, and production of precipitated calcium carbonates. Alumina, silica, and calcium carbonate are the three products coming out of this new production chain for alumina. We see that the interest is growing around the technology. I would like to highlight our review or renewed view, if you like, on seabed minerals. We have been engaged with seabed minerals for many years. We now see that the Norwegian Petroleum Directorate has kicked off an impact assessment on the Norwegian shelf in the area where they will open licenses for exploration and possibly exploitation of seabed minerals. The impact assessment will last approximately 1.5 years, followed by a hearing round and a decision process.
We are discussing and having dialogues on how we are going to position Nura to be in the right position to establish a robust and sustainable strategy for these forthcoming events in Norway and potentially also internationally. I will finalize with a financial update. We still have a very solid balance sheet in Nordic Mining. We see an increase of cash outflows in the third quarter. That reflects the pre-construction work, the engineering, and all of the setup around the project, which we discussed in some of the previous slides, which is actually part of the construction work that we outlined in the UDFS. That means also that most of this work is deductible from the original CapEx indication. Again, a change in the balance sheet coming from the fair value adjustment of our Keliber investment, which has gained value.
I'm glad to say that we still have no interest-bearing debt in the company and that we are comfortably funded to move forward towards construction of Engebø and the other activities that we outline on the other assets. With that, I've come to the end of my presentation, and we open up for questions, which with help from my assistants here, I will read them loud, and I will try to answer. I think also Christian is with us online to help us out. Please.
Thank you, Ivar. This must have been a fantastic presentation because we do not have any questions. If our viewers out there would like to post their questions, we are going to hang in another minute or two. Could you perhaps elaborate a little on when you think that the construction could start?
Absolutely. We are in a show-already stage. As I said, we have kicked off a lot of pre-construction activities pending the final outcome of the operational license. It would have been fantastic for me to give any specific dates, but hopefully within the first quarter next year, we can immediately start construction following the financing of the project.
All the processes are running as we speak.
Absolutely.
There is one question here. How much is the equity part of the investment, and how much of that will be asked from today's owners?
Oh, I think that's related to project financing on Engebø, and we are still discussing a gearing between 50-60%. A debt part of the financing somewhere between 50-60%, and the rest as equity. Of course, we expect to see a revaluation of the project and of the company when we move on towards financing.
We would like to thank all our viewers for participating in this presentation, and thank you, Ivar, for a very clear and good message today.
Thank you.