Questions and answers concerning the new situation

October 26, 2018

Press release: A new situation for Kiruna

What does this mean for LKAB?

“We find ourselves in a whole new situation and must make a concerted effort to broaden our operations and look for new deposits. We cannot take for granted that the orebody in Kiruna will continue to yield the same volumes. At the same time, we are well equipped and have already initiated several projects for the future; for example, development of next-generation large-scale underground mining, a carbon-dioxide-free steelmaking process, and recovery and recycling of valuable minerals from mine waste.”

Is the ore in Kiruna finished?

“No. We know that the mineralisation continues to the north and at depth, but we do not yet know how much there is. We need to do more testing and it will take two to three years before we have a clear picture.”

Will urban transformation be stopped?

“No. Mining will continue down to main level 1365, which means that all plans still apply up to about 2035, as we have reported.”

Will there be redundancies and cutbacks?

“No. Now it is matter of focussing on production and efficiency, so that we can ensure the financial strength necessary for maintaining LKAB’s competitive advantage and developing the company. The new findings will not affect us for the time being; it has more to do with LKAB’s future.”

Why has this not been foreseen earlier?

“We have seen, and reported, that the mineralisation decreases towards the south, but continues to the north. We do not know how much it decreases to the south because we have not tested at any appreciable depth along the entire orebody. This work began in 2016 to gain a basis for a decision as to a possible continuation of mining under level 1365.”

How long have you known about this?

“Prospecting has to do with building knowledge and making interpretations. These are the results of test drilling from 2016 up to the present, which have now been compiled and analysed. New conclusions have been reached in recent months. We wish to report on the change in prerequisites for our operations; therefore, we are announcing this now, despite the fact that we must continue testing for several more years in order to gain a clearer picture.”

Will there be any mining under 1365?

“It is too soon to say. We have to test the mineralisation more and we must develop new technologies that will allow us to mine in large scale at greater depth while maintaining safety and profitability. LKAB has already started the SUM project, Sustainable Underground Mining, together with ABB, Epiroc, Combitech and Volvo Group. A decision as to mining under main level 1365 will be taken within five years.”

Can you comment on the ore in Malmberget and Svappavaara?

“We are also prospecting in those locations, but we do not foresee the same changes as we have seen in Kiruna.”

Is LKAB looking for other deposits outside the orefields?

“Yes. We are ramping up our prospecting activities and, as a mining company, we must always look for new deposits. Primarily, we are testing in the nearlying area, but we may even look farther afield within the region.”

Is there any point in continuing to build Kiruna's new city centre?

“Yes. 450,000 square metres of residential and commercial space must still be replaced in Kiruna over a period of at least fifteen years. Urban transformation will not be halted as a result of new knowledge concerning the extent of the mineralization in Kiruna.”

Is there any risk that the money for urban transformation will run out? Will LKAB continue to meet its commitments?

“We will continue to assume our responsibility for urban transformation. To date, LKAB has paid about 6.8 billion kronor and reserved an additional 11 billion kronor for urban transformation. Since it is a prerequisite for continued mining, urban transformation will continue as long as we mine ore.”