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THIS IS LKAB

PERFORMANCE IN IRONMAKING IT STARTS WITH THE IRON

1696 The ore-rich mountains 1912 Kiruna Church is completed, 1982 LKAB takes the decision 2010 LKAB earmarks a budget Luossavaara and Kiirunavaara, a gift from the company to the to introduce large-scale sub-level of billions of kronor for future after which LKAB was named, parish. The church will be moved caving, increasing productivity urban transformations in Kiruna are mentioned for the first time to the new centre of Kiruna as part noticeably. LKAB develops olivine and Malmberget. in a document by Samuel Mört, of the urban transformation. pellets, which prove to be a highly a bookkeeper at the Kengis works. competitive pellet product. 2011 LKAB makes record profits. 1940 Narvik is invaded by the The same year the LKAB Academy 1888 The first ore train rolls Germans and the port is blown up. 1989 The subsidiary Minelco, foundation is established to along the Ore Railway from Malm- Ore traffic focuses on Luleå until now LKAB Minerals, is estab- secure future recruitment. berget to Luleå. the port of Narvik is rebuilt. lished. Its task is to develop markets for the iron ore outside 2015 LKAB celebrates 125 1890 The company 1955 LKAB’s first pelletising of the steel industry. years and publishes a book about Luossavaara-Kiirunavaara plant – the first such plant in the company’s history. Aktiebolag – LKAB – is formed. Europe – is taken into operation 1997 Wireless communication in Malmberget, increasing the is introduced into LKAB’s under- 2018 The starting shot for the 1898 Hjalmar Lundbohm is degree to which the iron ore is ground mines using the Wireless SUM (Sustainable Underground appointed as local manager in upgraded and thus also the value Underground Communication Mining) initiative to develop a new Kiruna. Later he becomes the added for customers. System (WUCS) system. world standard for sustainable company’s first general manager, mining at great depths. and right up until his retirement in 1957 The Swedish state 2001 One of the world’s strong- 1920 he remains a strong driving becomes the owner of 96 est electric locomotives is called 2023 Estimated start of pro- force in the development of LKAB percent of the shares in LKAB. IORE. Both strong and incredibly duction for the ReeMAP initiative and the entire region. energy-efficient, it saves LKAB to produce phosphorous and rare 1964 The Svappavaara mine around 6 percent of energy per earth elements. 1902 The railway is completed is opened, along with the railway tonne of ore transported. all the way to Narvik, ensuring from Kiruna to Svappavaara. The 2035 The current main haulage that the iron ore can be transport- same year the new port in Luleå 2004 LKAB notifies the Munici- levels are expected to be mined ed to the ports of both Narvik and is completed – at the time, the pality of Kiruna that the continued out and the whole of the centre of Luleå. largest single investment ever ore mining will impact the built-up Kiruna is expected to have been made in a Swedish port. area of the city. moved. 1903 Grängesbergsbolaget takes control of LKAB. 1973 Driverless trains are 2004 LKAB establishes the 2045 In partnership with SSAB introduced into regular use in Hjalmar Lundbohm Research and Vattenfall, LKAB is running 1910 The first processing the underground mines. Centre and gives SEK 100 million the HYBRIT initiative for future plant is taken into use. The same in research grants to Luleå Uni- fossil-free steelmaking. If the year, property company Kiruna- 1976 LKAB becomes 100 percent versity of Technology. initiative succeeds it will make a Gellivare Fastighetsaktiebolag is owned by the Swedish state. decisive contribution to meeting formed. The company still exists Sweden’s climate goals for 2045. today, under the name LKAB Fastigheter.

CONTENTS

OUR BUSINESS...... 2 BUSINESS CONTEXT AND STRATEGY...... 4 PRODUCTS...... 7 HOW WE CREATE VALUE...... 8 EXPLORATION ...... 10 MINING...... 11 PROCESSING...... 12 TRANSPORT...... 13 EMPLOYEES...... 14 DEVELOPMENT FOR THE FUTURE ...... 16 SOCIAL RESPONSIBILITY...... 18 FURTHER INFORMATION...... 21 LKAB is one of the world’s leading suppliers of upgraded iron ore products and one of Sweden’s oldest industrial companies. We are also a growing supplier of industrial minerals, and we sell technology and innovations that we have developed ourselves to the mining and construction industries. This makes LKAB an important player in Swedish export industry and industrial development.

Kiruna and Malmberget are home to the world’s two largest underground mines for iron ore production. In Svappavaara the iron ore is mined in open-pit mines. From the processing plants at the mines the iron ore products are transported along the Ore Railway to the ports of Narvik and Luleå for shipment to customers Narvik around the world. Svappavaara Kiruna

Malmberget

ARCTIC CIRCLE Ore Railway

Luleå

THIS IS LKAB 1 OUR BUSINESS MINING OPERATIONS SUSTAINABLE IN THE LONG-TERM

Processing plants Open-pit mines Kiruna Svappavaara Svappavaara Research and Malmberget development Industrial minerals Mining and construction services Real estate Engineering services Property management

Rockwork Explosives Underground mines Drilling systems Kiruna Malmberget

The backbone of our business is formed by our highly upgraded iron ore products from the Swedish orefields. Today the LKAB Group has a broad product portfolio that includes industrial minerals and products involving other fields of application for iron ore. Other parts of the Group include highly efficient water drilling systems, rockwork and engineering services, explosives and a property company.

A sustainable input material working with them for decades and we also conduct joint develop- Formed long ago when iron combined with oxygen, the minerals ment projects. Our geographical proximity also gives us a freight hematite and magnetite are mined to supply the world’s steelworks advantage over our competitors. There are also large markets in the with raw materials. Hematite is more common, while magnetite Middle East and North Africa. makes up only a tenth of the world’s known iron ore resources. The majority of LKAB’s iron ore is high quality magnetite, with an Competitiveness for the future iron content of 60 to 70 percent. Magnetite requires half as much It is our ambition to continue to translate customers’ requirements energy as hematite during the sintering of pellets. A high degree of in our research and development work, so that our products match processing and high pellet quality also reduce energy consumption our customers’ development into the future. We are also continuing and carbon dioxide emissions in the customers' steelmaking processes. to invest in innovation in respect of our own production and our own processes. Europe is our main market A long-term approach is fundamental to LKAB’s business and nat- The iron ore market is driven by demand for steel, which in turn urally includes considerable responsibility. LKAB’s operations impact is linked to developments and growth in the global economy. LKAB the environment and affect our local communities. At the same time, is Europe’s largest iron ore producer. Europe is also home to steel substantial value is created at many stages. Sustainability has long producers – particularly those delivering to the automotive and been an integral part of LKAB’s strategy, focusing on maximising the construction industries – with high requirements of quality and values created while at the same time taking responsibility for mini- sustainability. This means that LKAB’s pellets are in demand as an mising our negative impact on the environment and on communities. input material. In the case of most of our customers we have been

2 THIS IS LKAB OUR BUSINESS

LKAB aims to create prosperity by being one of the most innovative, resource-efficient and responsible mining companies in the world.

Rockwork Explosives Underground mines Drilling systems Kiruna Malmberget

28 25.9 bn 80% 100% companies in the sales in 2018. LKAB mines around 80 percent LKAB is owned by LKAB Group. of all iron ore in the EU. the Swedish state.

BUSINESS CONCEPT VISION To manufacture and deliver LKAB shall be perceived by customers as the upgraded iron ore products supplier that adds the most value, thus leading and services for ironmaking that the way in our chosen market segments. create added value for customers on the world market from our base in the Swedish orefields. OUR CUSTOMER PROMISE Other closely-related products Performance in Ironmaking is LKAB’s promise and services that are based on to customers. It means that we always put the LKAB’s know-how and that sup- customer at the centre and ensure quality, stability port our main business activities and delivery reliability throughout our value chain may be included in operations. from mine to port.

THIS IS LKAB 3 BUSINESS CONTEXT AND STRATEGY WELL POSITIONED IN THE GLOBAL MARKET

LKAB is affected by what happens globally in the world around us. Megatrends and changes in external circumstances are some of the 15% drivers that create new opportunities to enhance our competitiveness and develop our offering. At the same time, various factors – not least, lower emissions of CO2 per tonne of steel produced with the climate issue – bring great challenges. Here LKAB, together with LKAB’s pellets compared with hematite fines1. our customers and suppliers, has a great responsibility to influence developments in a more sustainable direction.

Metals and minerals are needed in order to build processes and to come up with completely new infrastructure, homes and other buildings, to raise processes. Today’s blast furnace process is based 1.7GJ standards of living and for sustainable development on fossil coal as both fuel and reducing agent. less energy is consumed per around the world. At the same time the industry Electric arc furnaces, using recycled scrap and tonne of steel produced with is facing major challenges, such as the issue of direct reduced iron as input materials, are therefore LKAB’s pellets compared with climate change. LKAB has both an opportunity and an interim solution in the transition to reduced 1 hematite fines . an obligation to contribute to finding solutions for carbon emissions. What the technology of the the global challenges that have been identified, so future will be, and how it is to be introduced, are that the UN Sustainable Development Goals can questions that are high on the steel producers’ be achieved. Iron and steel are closely linked with agenda. Whichever technology is chosen, the main the development of a more sustainable economy issue is having a supply of renewable energy at a and with innovation, including in areas such as low cost. In partnership with steel company SSAB construction and infrastructure, transport and and energy company Vattenfall, LKAB is running the the automotive industry, renewable energy and HYBRIT project which aims to develop steelmaking electronics. At the same time customers, interest that gives off water instead of carbon dioxide. groups and authorities are making ever greater demands of responsibility and transparency as Sustainable energy and industry regards the impact of the steel industry. Reducing Access to renewable energy at the right cost is essen- the climate footprint throughout the value chain has tial for the transition to sustainable steelmaking, but a high priority. we also need to increase resource efficiency all along the value chain. International and national initiatives High iron content is in demand within the context of the so-called fourth industrial Steelmaking causes substantial carbon emissions. revolution – with greater focus on innovation and the Using more highly upgraded input materials in opportunities offered by digitalisation – mean that steelworks enables companies to have more effi- all production is developing towards greater flexibil- cient processes and increase productivity, resulting ity, shorter lead times and increased automation. in lower emissions. LKAB’s product range is entirely Magnetite ore from the Swedish orefields not in line with increased demand for higher grade iron only has a very high iron content, but also gives ore products with a reduced climate impact. off energy when processed into pellets. This means that LKAB already has one of the world’s most New reduction technologies energy-efficient and least climate-impacting indus- The core issue as regards reducing carbon emis- trial processes from mine to finished iron ore pro sions in steelmaking is to find a way to reduce the duct. However, we are continuing to work to develop oxygen in the iron ore without generating green- technology and optimise production and energy in house gases. A lot of development is taking place in the processing chain in order to move towards our this area, both to reduce emissions in existing steel long-term vision of carbon-free production.

1Benchmarking on carbon dioxide emissions from iron ore pelletizing. The report is contract research commissioned by LKAB.

4 THIS IS LKAB BUSINESS CONTEXT AND STRATEGY

LKAB supports all of the UN’s 17 global Sustainable Development Goals. However, our core business is more clearly linked to some than others.

AGENDA 2030: THE UN’S SUSTAINABLE DEVELOPMENT GOALS

Partnerships for sustainable industry, innovation and infrastructure Economic growth, decent work and equality (Goals 5, 8) (Goals 9, 11, 17) Mining employs many people globally and locally, both directly and The mining industry has an important role to play in the transition to indirectly, and is an important economic driver in many regions. Having sustainable development of society. To do this LKAB need to develop said that, if the business is not run responsibly the mining industry new technology, effective digital processes and new methods of mining, can involve risks to human rights – including health, safety and a good processing and logistics – both by itself and in partnership with others. environment in which to live and work. LKAB demands decent working Metals and minerals are still needed for the ongoing development of conditions and safe workplaces where compliance with existing laws society as cities grow and standards of living and technological develop and regulations is a minimum, and we demand this not only of ourselves ment increase. Cooperation and dialogue with our stakeholders and but also in our value chain. LKAB also distances itself from any kind of partners ensures that our operations take into account views and poten- discrimination and abuse. Our workplaces must develop people and be tial improvements – not just locally, but also regionally and globally. inclusive, which is why equality is a priority area. Our desire to set an example in the industry and in society is reflected in LKAB’s strategy, Climate action and reduction of emissions to air (Goals 7, 13, 17) in which we have targets both for safe workplaces and for increased Although LKAB’s magnetite ore has an advantage over its competitors’ percentages of women employees and managers. more energy-intensive processes for hematite ore, we have a clear goal to reduce the use of fossil energy sources in production. We have Ecosystems and biodiversity (Goal 15) to take responsibility for our impact, and we are therefore taking part The world is losing biodiversity at an alarming rate and LKAB can see in a number of collaborative initiatives so that in the future steel can be that our land use is also contributing to the problem. To promote the made without carbon dioxide emissions and to develop sustainable, safe sustainable utilisation of land-based ecosystems, LKAB has produced and efficient mining operations for tomorrow. land guidelines in which we publicly describe how we will work to avoid, minimise and to restore and compensate for ground damage caused by our operations. LKAB is also working to encourage a more ecological focus in remediation work, so as to increase the nature values of former industrial land.

5 7 8 9

Gender Equality Affordable and Decent Work and Industry, Innovation Clean Energy Economic Growth and Infrastructure 11 13 15 17

Sustainable Cities Climate Action Life on Land Partnerships and Communities for the Goals

THIS IS LKAB 5 BUSINESS CONTEXT AND STRATEGY

STRATEGIC FRAMEWORK

LKAB AIMS TO BE A MINING AND MINERALS COMPANY WITH A CLEARLY CHOSEN NICHE THAT GROWS GLOBALLY THROUGH:

Highly upgraded Highly productive mining, Energy, climate and environ- products processing and logistics mentally efficient processes

FOUNDATIONS

Growth

Operational Sustainability excellence

Leadership and employeeship

Values

Operational excellence Values LKAB will increase our produc- LKAB’s values involve taking re- tivity through more stable, more sponsibility and seeing your own efficient processes and continual significance for the future of the improvement at all levels. We are company as a whole; being com- focusing on optimising plant and mitted and focusing on results for machinery utilisation through- our customers; and being innova- out the operations. In parallel, tive in order that we develop and we are working to evaluate and improve all the time. Our values develop new technology in order guide us in prioritising our work to increase productivity and and are kept alive by talking about resource efficiency. By being them and living them in all things, resource-efficient we can reduce Leadership and employeeship large or small. Sustainability both our costs and our impact on Developing the organisation and LKAB is working to increase the environment. skills supply are key areas, and sustainability throughout the work to create a shared culture value chain. As a niche player, this that focuses on safety, production gives us a competitive advantage stability and continual improve- in the global arena. Minimising ment must continue. By continu- the negative impact of our opera- ing to build a culture that is inno- tions and seeking to maximise our vative, flexible, responsible and benefit to customers and commu- committed to LKAB’s future we nities creates the conditions for can secure our competitiveness in long-term profitable growth. both the short and the long-term.

6 THIS IS LKAB PRODUCTS

IRON ORE PRODUCTS FOR THE STEEL INDUSTRY

LKAB supplies iron ore products to some of the Direct reduction (DR) pellets are reduced by natural SALES BY PRODUCT AREA most prominent steel producers in the world. gas to direct reduced iron (DRI), which is used to Percentage of sales of iron ore products (MSEK) The bulk of LKAB’s deliveries to the steel industry make steel in an electric arc furnace. This method consist of iron ore pellets with an iron content of is common in countries with access to natural gas, around 67 percent. Well-balanced, proven additives such as in the Middle East and the USA. in pellet production promote productivity, reduce Fines are finely crushed iron ore that is fused energy requirements, result in less wear and tear into larger pieces at a high temperature (sintered) % and minimise slag formation in steelmaking. before being used to produce iron in a blast furnace. Blast furnace pellets are LKAB’s largest product LKAB produces high-grade fines in Malmberget. group. These pellets provide great customer value in steelmill blast furnaces, where they are reduced % to crude iron. The optimised addition of various Pellets...... 88 minerals such as olivine improves the high temper- Fines...... 10 Other...... 2 ature properties of these input materials.

INDUSTRIAL MINERALS AND OTHER PRODUCTS AND SERVICES

LKAB’s Special Products Division develops and GGBS is a cement substitute that can be produced SALES BY PRODUCT AREA AND markets industrial minerals, drilling technology with lower carbon dioxide emissions than traditional SERVICE AREA Percentage of sales (MSEK) and full service solutions for the mining and con cement. GGBS is produced by quenching and grind- struction industries. Our own mineral resources, ing blast furnace slag from steel producers. a high level of technical expertise and a good Water-powered drilling technology is developed understanding of the customer’s business creates by LKAB Wassara, which sells advanced drilling a high level of added value for customers. Industrial systems all over the world – mainly to the mining minerals make up a large product group and LKAB % and construction industries. The patented water- Minerals offers more than 30 different minerals for powered drilling technology was developed by various applications. LKAB to improve the efficiency of iron ore mining Magnetite is used for water treatment, noise and in its own underground mines. % vibration damping and as aggregate in heavy con- Magnetite...... 27 Mining and construction services such as drifting, crete, among other things. Huntite is used for its fire Mineral sands...... 14 concrete production and rock reinforcement are prevention properties in products such as armoured Other industrial minerals...... 16 provided by LKAB Berg & Betong. Mining and construction cable, foam and other polymer products. services...... 43 Explosives in bulk and packaged form are deve Mica has a wide range of applications, including as Other...... 0 loped and produced by LKAB Kimit. reinforcement and heat protection in plastics and to provide decorative elements in ceramic materials. Engineering services and production are offered Mineral sands are used in the production of welding through LKAB Mekaniska. rods and welding wire.

THIS IS LKAB 7 HOW WE CREATE VALUE

BASED IN THE SWEDISH OREFIELDS

LKAB’s mission is to exploit our iron ore resources in a responsible way and to secure long-term value creation and competitiveness. We take responsibility for our impact throughout the value chain, thereby enhancing our position with our customers and increasing our contribution to the development of society.

EXPLORATION MINING PROCESSING TRANSPORT see page 10 see page 11 see page 12 see page 13

DEVELOPMENT

8 THIS IS LKAB HOW WE CREATE VALUE

In Kiruna mining takes place in an underground mine which has an orebody taking the form of an inclined slab of magnetite.

In Svappavaara there are three open-pit mines, a sorting In Malmberget mining began when the Ore Railway was completed in 1888. plant, a concentrating plant and a pelletising plant.

The iron ore that LKAB mines in the orefields of northern Sweden is among the richest in the world. Our primary task is to utilise and process these assets as a committed, innovative and responsible company.

Highly upgraded products along with efficient mining, Svappavaara processing and logistics, and processes that are en- At present, LKAB mines iron ore in the open-pit ergy, climate and environmentally efficient, are fun- mine in Leveäniemi. This gives LKAB a flexible m damental to the added value that we create. The goal additional source of crushed ore to supplement the 1,365 of sustainable development is echoed in everything ore from the underground mines in Malmberget The current main haulage level we do. It guides how we process and manage our and Kiruna. Svappavaara is also the location of of the Kiruna mine is at a depth mineral resources, our innovations, our physical the Mertainen and Gruvberget open-pit mines, of 1,365 metres. assets and our financial capital. It also guides us in where there currently is no mining taking place. our relations with our employees and with the oper- Svappavaara has a sorting plant, a concentrating ating locations on which we are so dependent. plant and a pelletising plant.

OUR OPERATING LOCATIONS Malmberget 1,250 m Kiruna Malmberget is part of the Municipality of Gällivare In Malmberget the current main The mining of iron ore takes place in the Kiruna and mining operations began when the Ore Railway haulage level is at a depth of underground mine, which has an orebody taking the between Luleå and Malmberget was completed 1,250 metres. form of an inclined slab of magnetite. It is around in 1888. In Malmberget the underground mine 80 metres wide, four kilometres long and extends consists of around 20 dispersed orebodies, of which about two kilometres underground. The ore is pro- around 10 are currently mined. In the eastern field cessed above ground in a sorting plant, three con- only magnetite is mined, while in the western field centrating plants and three pelletising plants. Both a small proportion of hematite is also mined. In blast furnace pellets and pellets for steelmaking via Malmberget the iron ore is processed in a sorting direct reduction, known as DR pellets, are produced plant, a concentrating plant and two pelletising here. In a separate part of the Kiruna mine LKAB has plants. As part of the HYBRIT initiative LKAB is to established a test mine for the SUM (Sustainable construct a research facility in Malmberget for the Underground Mining) initiative, which aims to find development of fossil-free pellet production. methods for sustainable mining at great depths.

THIS IS LKAB 9 Exploration Mining Processing Transport

EXPLORATION

Securing access to iron ore raw materials is crucial for LKAB’s future and growth. We work with a planning horizon of 20 years in order to secure production and operations that are sustainable in the long-term.

Exploration means identifying and investigating Investigation of the bedrock the areas in order to find mineral deposits. Mineral The exploration work is carried out using drilling LKAB is reserves and mineral resources are the basis of a rigs – small mobile units that generally leave behind substantially mining company’s operations. Mineral resources few traces. In sensitive areas the drilling is carried increasing its rate means all the ore that could be mined commercially. out on frozen ground with transport taking place A mineral reserve is the part of the resource that above the snow in order to minimise the impact. of exploration. From can be profitably extracted. After the drilling, the visible result is a drilled hole 2019 onwards LKAB around five centimetres in size with a red plastic Basis of mining operations cap to mark the site. expects to double its Exploration therefore provides a basis for mining exploration efforts. operations, and the key to successful exploration Concessions and permits is geological expertise combined with access to Among other things, an exploitation concession land areas that potentially have ore. This demands must be applied for from Bergsstaten (the Mining respect for the surrounding area, responsibility Inspectorate of Sweden) and an environmental for the environment and cooperation with local permit from the Land and Environment Court. When livelihoods – not least reindeer herding. LKAB examining the environmental application the court carries out both what is known as field exploration, will stipulate the conditions that the new operation to investigate new areas, and exploration next to must meet. In this examination various interests are existing mines. weighed up against each other and there must be plenty of opportunity for stakeholders to make their From deposits to mining voices heard. The entire process, including any land Hard work and perseverance are required to issues, can take anything from 5 to 15 years and find a deposit, decide whether it is viable to mine sometimes even longer. and finally obtain all the necessary permits. The exploration plays a central role in the strategic programme for increased knowledge of ore and Hard work and perseverance are required to find a deposit, decide barren rock, which is aimed at understanding the whether it is viable to mine and finally obtain all the necessary permits. next generation of production areas and products. Since 2016 exploration work has been intensified, with exploration close to the mines in order to increase knowledge of the deposits that are already being mined. The results of the test drilling carried out next to the Kiruna mine in recent years show that the ore body has a more complex downward geometry under the current main haulage level than had previously been assumed. It continues downwards to the north – the deepest drilled hole has found deposits at a level of 2,300 metres below ground – but the volumes decrease to the south. However, this does not affect reported mineral reserves or mineral resources or planned mining up to the year 2030. It is more about LKAB’s long-term future; in the mining industry, planning horizons are long. As a result, LKAB is now substantially increasing its rate of exploration both next to the existing mines in the Swedish orefields and in other areas of the region. From 2019 onwards LKAB therefore intends to double its exploration efforts in order to ensure it has a basis for decisions on the future investments needed to secure production after 2030.

10 THIS IS LKAB Exploration Mining Processing Transport

MINING

Every day, 365 days a year, iron ore is mined in LKAB’s mines that is equivalent to around six Eiffel Towers – in terms of the quantity of steel. Safe and resource-efficient mining secures crushed ore for the processing plants and is central to LKAB’s profitability and competitiveness.

The majority of LKAB’s iron ore is mined in Kiruna the height of the part of the orebody taken out from and Malmberget. Underground mining is more each drift from around 15 metres to 28 metres. This cost-intensive, so to be able to compete with the means that today each blasting provides around world’s open-pit mines we have developed highly 10,000 tonnes of crude ore, compared with 1,200 365 automated safe and efficient production methods tonnes in the 1980s. Efficient, large-scale sub-level days a year iron ore is and processes below ground. caving is the sole reason why we have been able mined in LKAB’s mines. The method that LKAB uses for underground to remain competitive in our underground mining mining is known as sub-level caving. After produc- operations. tion drilling and blasting, the ore is allowed to fall LKAB is continually refining and developing down into underlying production tunnels – known accessibility and techniques for mining iron ore as drifts – for loading and onward haulage to below ground. This includes factors such as 10, 000 ground level by rail and ore hoists. The construction increased safety, improved communication and tonnes of crushed ore is of drifts through the orebody represents a major increased automation, as well as new and refined generated from each blasting. cost in sub-level caving. Increasing the vertical technology. The next generation production drilling and horizontal distance between the drifts means system from LKAB Wassara will be capable of significantly more ore can be mined, thereby ration- optimising the caving flow and reducing the level alising the work. of waste rock mixed in with the ore. Since every extra percentage unit of ore in each caving repre- Crucial for profitability sents millions of kronor, this is highly significant Using blasting and drilling techniques that we have for LKAB’s profitability. developed ourselves, we have been able to increase

1 5

Drifting Construction of transport tunnels, or drifts, into the orebody. 2

Emptying & crushing The ore is crushed into 10-cm Production drilling & blasting Long holes are drilled upwards into the orebody. pieces, and then transported The drilled holes are then charged with blasting to ore elevators called skip agent, after which blasting takes place. hoists. 3 3 6 2

1 Production loading The ore is hauled out, dumped into vertical chutes and collected in rock cavities above the main haulage level. 4 5 4 Hoisting The ore is automatically loaded into the skips, which Chute loading & transport carry the ore to the processing 6 From the rock cavities, the ore is plants at surface level. transported to large crushers.

THIS IS LKAB 11 Exploration Mining Processing Transport

PROCESSING

Today, LKAB processes all the iron ore mined from the company’s mines. The ore is processed in processing plants close to where the ore is mined.

SORTING SCREENING CONCENTRATING CRUSHING MAGNETIC GRINDING SEPARATION MAGNETIC FILTERING PELLETISING SEPARATION BALLING binder DRYING AND PREHEATING SINTERING

1300°C

LKAB has a production structure that focuses on a ties before the concentrated product (slurry) goes high degree of processing and flexibility. Being able on to the processing plants to be made into pellets. to direct the flows of crushed ore between the dif- The iron content has then increased from around ferent production locations creates the conditions 62 percent to around 68 percent. In Malmberget, in 6 plants for maximum utilisation of existing plant capacity. addition to slurry for the pelletising plant the first LKAB has six pelletising plants stage of the concentrating process also produces in operation: three in Kiruna, Sorting a fine iron ore sand with a high iron content, known two in Malmberget and one in LKAB currently has three sorting plants in opera- as fines. Svappavaara. tion: one in Svappavaara, one in Kiruna and one in Malmberget. Sorting is a dry process in which the Pelletising ore is crushed and screened in order to magnetically LKAB currently has six pelletising plants in oper- separate types of rock that are not iron ore. The ation: three in Kiruna, two in Malmberget and one iron content in the crushed ore is increased from in Svappavaara. Malmberget and Svappavaara 10 mm approximately 45 percent to around 62 percent. produce blast furnace pellets. Kiruna produces both is the diameter of a pellet. blast furnace pellets and pellets for direct reduction Concentrating (DR pellets). In the pelletising plant the slurry is To further purify the ore after sorting, the crushed filtered and a binder (bentonite) is added before the ore is ground finer still in a concentrating pro- iron ore concentrate is rolled into 10-millimetre cess. Kiruna has three concentrating plants, while pellet balls. The pellets are dried, preheated, sin- Svappavaara and Malmberget have one each. In the tered and then cooled down before being transport- concentrating plants the crushed ore goes through ed to a storage silo for onward transport by rail to several stages of grinding and magnetic separation the ports of Narvik and Luleå. using water in order to release and remove impuri-

12 THIS IS LKAB Exploration Mining Processing Transport

TRANSPORT

From mining through processing to the ports of Narvik and Luleå, LKAB handles millions of tonnes of iron ore products every year. Our competitiveness in the global marketplace is based on an efficient logistics chain both above and below ground.

Our ability to be competitive in a global market loading and unloading while the cars are moving. is based on the fact that we are also a leading The train does not need to stop or reverse, but Facts about rail transport logistics company, both above and below ground. instead can load and unload while rolling along a • LKAB currently has 17 IORE With relatively few possibilities for interim storage circular track before returning to the Ore Railway locomotives operating on the in depots and ports of shipment, one of our main line. Shorter terminal times mean better utilisation Ore Railway. The IORE locomotive is designed for extremely objectives is to get out as much volume as possible of locomotives and train sets, and at the same time heavy rail freight, and with at the steadiest pace possible. increases delivery capacity. traction of 1,200 kN it is one of Using ore trains, LKAB’s ore is transported along the world’s strongest electric the Ore Railway from the mines and processing Increased capacity is a priority locomotives. plants to our ports of shipment in Narvik and Luleå. The greatest challenge facing LKAB’s transport • Using the IORE locomotive’s These ports form the backbone of our logistics chain is coping with increased volumes as produc- asynchronous motors, kinetic energy is converted into elec system. The two ports mean that logistics flows can tion gears up. Delivery capacity on the section of tricity when the loco brake is be optimised depending on where the customer is railway between Malmberget and Luleå ore port applied – allowing almost located. Two thirds of seaborne transports depart has increased by around 10 percent for each train energy-neutral running in from Narvik and one third leave from Luleå, which set as a result of permission for higher axle loads. optimal conditions. is close to our European customers. In 2018 LKAB also received the green light from the • The ore trains have 68 ore cars with a load capacity of 100 Swedish Transport Administration to evaluate the tonnes each. Each train carries Investments in rail and sea transport same capacity increase on the Kiruna – Narvik sec- around 6,600 tonnes, but with More flexible logistics – such as more passing tion. A permanent licence would mean an increase increased axle loads this could points for trains on the Ore Railway and invest- in delivery capacity to the port in Narvik of around approach 7,100 tonnes. ments in our ports – will provide more opportuni- two million tonnes, using existing trains and cars. • There are ten departures a ties to increase production. Investments have been Increased axle loads are a first step in achieving day to the Port of Narvik and four departures a day to the made, for example, in the Port of Narvik, in track greater capacity, but a double track between Kiruna Port of Luleå. Additives used improvements, in new terminals and in ore cars and Narvik is needed within ten years. in processing are carried on and locomotives. LKAB has developed a system for the return journey, enabling the logistics system to be used sustainably and efficiently.

Facts about sea transport • Narvik is LKAB’s largest port, with a capacity of nearly 30 million tonnes per year. The Port of Narvik is ice-free all year round and is deep enough for ocean-going vessels. • In Narvik we have a 650-metre long automated unloading station and in Luleå an unloading loop developed for a high unloading capacity and environmental efficiency. An ore train carrying 6,600 tonnes of iron ore products can be unloaded in less than one hour. • A new quay with a shiploader was opened in August 2016. The shiploader is 160 metres long, weighs,1,700 tonnes and has a capacity of 8,000 tonnes of iron ore pellets or 11,000 tonnes of iron ore fines per hour. • The ore port in Luleå is ice-free for around seven months of the year and today has a capacity of 6 million tonnes a year.

THIS IS LKAB 13 EMPLOYEES

REQUIREMENTS FOR THE FUTURE

LKAB’s success very much depends on the skills and dedication of our employees. A culture that is characterised by safety, inclusion and development opportunities is a priority, so that LKAB will be an attractive employer.

A wide range of expertise is required to operate The values that guide us LKAB’s large-scale iron ore mines, as well as Committed, innovative and responsible – our shared our processing plants and extensive logistics values are about taking responsibility for the future network. Within LKAB there are around 200 differ- of the company, being committed to our customers’ ent roles, within various professional categories – results and being innovative so that we continue to including rock and research engineers, automation develop and improve all the time. engineers, rock workers, electricians, process It is LKAB’s ambition to set an international operators and services within IT, purchasing, example in the mining industry as regards ethics, logistics and sales. the work environment, equality and diversity. LKAB shall not only be a secure and attractive work- Human resource management and attractiveness place; it shall also exert a positive influence on our LKAB’s long-term competitiveness is based largely business partners and our immediate environment. on our ability to attract and retain the right skills Our work aims to ensure cutting-edge expertise, through professional challenges, broad career to maintain exemplary stakeholder dialogue and paths and personal development. This work is sup- ethical value chains, and to contribute to lively and ported by our talent management process, which is inviting local communities. aimed at succession planning and identifying talent Standards and ground rules for the workplaces and key positions. At the same time, LKAB can offer have been produced jointly by employees and something more: a unique place to live in one of the management, and are brought together in a code world’s most beautiful regions. There is a strong of conduct. We observe internationally recognised economy here alongside the mining operations, as declarations and conventions such as the UN Global well as a good quality of life for our employees and Compact, the OECD Guidelines for Multinational their families. Enterprises and the UN Guiding Principles for Busi- ness and Human Rights. To ensure responsibility throughout the value chain we also have a Supplier Code of Conduct. COMMITTED

14 THIS IS LKAB EMPLOYEES

We have a clear THE VALUES THAT GUIDE US ambition to be a role model in terms of ethics, equality, diversity and the work environment.

COMMITTED The performance of our customers is at the heart of everything we do.

INNOVATIVE We emphasise creative thinking to drive improvements forward.

RESPONSIBLE We act for the long-term, show respect and put safety first.

Safety first! Highly ranked as an employer LKAB prioritises the work environment and safety Once again LKAB is listed as one of Sweden’s most above all else. The most commonly occurring popular employers in Career Barometer 2018 accidents within and outside the mines are those (Universum’s Karriärbarometern 2018)2, among that are not specific to LKAB’s operations; someone those with both BSc and MSc degrees in engineer- 4,188 slipping and spraining their ankle, trapping a finger, ing. For the sixth successive year LKAB was also headcount of the tripping over an obstacle, slipping with a wrench – named as a “Career Company” – one of the 100 LKAB Group1 basically, anything that might happen in any kind of employers in Sweden that offer the most exciting industrial workplace. LKAB invests substantially in career and development opportunities. Attracting, retaining and developing mandatory training and information, and in making employees is key to LKAB’s strategy. safety a natural part of our employees’ daily work. The aim is to increase awareness, change attitudes and risk behaviour and create a culture of safety with the long-term objective of zero accidents.

1 The average number of employees is calculated as per FAR recommendations, i.e. time worked converted into full-time equivalents (FTEs). 2 Karriärbarometern (the Career Barometer) is Universum’s annual survey which asks young graduates about employers and careers.

THIS IS LKAB 15 DEVELOPMENT FOR THE FUTURE

FINDING NEW WAYS

We need new solutions so that we can mine large volumes at depth safely and profitably, we need to adapt our business to reduce its climate impact and we need to create new business activities to supplement our iron ore operations.

LKAB has a long tradition of innovation, from the The virtual test mine makes it possible to simulate development of large-scale sub-level caving, the data flows and scenarios that cannot be tested advanced water-powered drilling technology and in the physical test mine. the introduction of olivine pellets in the 1970s to the development of an increasing amount of Steel without coal remote-controlled and automated processes in The aim of HYBRIT, an initiative that LKAB is running more recent decades. LKAB’s future as a leading in partnership with Vattenfall and SSAB, is to make industrial company lies now, as previously, in its the entire production process from mine to steel ability to re-think. fossil-free. Since ironmaking in blast furnaces is a large source of greenhouse gas emissions, a key New world standard for mining at great depths part of the initiative is to replace the blast furnace We know that after 2030, when the current main process with a process that uses hydrogen as haulage levels are expected to be mined out, we will reducing agent instead of coal and coke, as used in need to mine at greater depths. The future of mining blast furnaces. The great advantage is that the re- is carbon-free, digitalised and autonomous, and in sidual product is water rather than carbon dioxide. 2018 LKAB began collaborating with ABB, Epiroc, Yet fossil-free steelmaking begins back with the Combitech and Volvo Group in the SUM (Sustainable iron ore raw material, and in addition to its develop- Underground Mining) development initiative. The ment work for carbon dioxide-free mining LKAB is aim is to set a new world standard for sustainable working intensively on designing the next genera- mining at great depths. tion of pelletising plant. As part of the HYBRIT initi- Together we are building a testbed for new pro- ative LKAB is reviewing the possibility of replacing cesses and new technology in LKAB’s underground fossil fuels in the processes carried out in the pel- mines. The aim is to investigate the best way to letising plants, and in an initial trial one pelletising build an efficient and autonomous production plant in Malmberget is being converted to run on system for mining at great depths: a system that bio-oil. In parallel with this conversion, new heating is carbon-free and maintains the highest conceiv- methods will be tested out in the experimental able level of safety when people and autonomous facility in Luleå. In the longer term the aim is to machinery work side by side. make iron ore pellets completely carbon-free. In Kiruna a physical test mine is being built and HYBRIT’s aim is to have a completely fossil-free in Malmberget tests are to be carried out in existing industrial process for steelmaking by 2035. facilities. Tests will also be performed in a virtual test mine within the framework of the testbed. INNOVATIVE

16 THIS IS LKAB DEVELOPMENT FOR THE FUTURE

If we are to continue to be a competitive company we need to re-think.

A broader LKAB To supplement its iron ore production and be able to better fend off fluctuations in the iron ore market, 2030-2035 LKAB needs to broaden its business. This is why we next generation of LKAB now have a focus on establishing LKAB more widely Extensive development work is in the minerals market. Examples include the acqui- under way to design the next gene- sition of the UK minerals company Francis Flower, ration of LKAB after 2030 –2035. which recycles blast furnace slag. Another example is the work being conducted within the ReeMAP project, which aims to extract phosphorous and rare earth elements from our waste streams. There is a shortage of both phosphorus and rare earth elements on the world market.

THIS IS LKAB 17 SOCIAL RESPONSIBILITY

WE CONTRIBUTE TO SOCIETY

LKAB’s strategy is based on maximising the value that we generate locally and globally, while at the same time taking responsibility for the impact of our operations.

The iron ore of northern Sweden generates considerable socioeconomic value. It forms the foundation of the communities in the Swedish orefields, and led to the development of Swedish hydroelectric power and 500 km of railway track from the Atlantic to the Gulf of Bothnia. The iron ore and LKAB have also given rise to two ore ports and a steelmill, and have contributed to an outstanding university of technology. Ever since LKAB was formed, the business has been characterised by a long-term approach, by cooperation and by far-reaching social and environmental responsibility. work. At our operating locations in the Swedish orefields, relations with local residents and with the Cooperation with many different stakeholders reindeer herding are key. LKAB hopes to continue to We have a strong ambition to be a positive force contribute to attractive local communities, a strong – as a sustainable supplier primarily to the steel economy and tourism industries a good housing industry, but also as a partner, employer and citizen market, good schools and a broad range of cultural of society. Dialogue with our various stakeholders and outdoor offerings. The urban transformations guides us when we prioritise and report on the are one of the single most important issues for both issues that are most material in our sustainability LKAB and the operating locations.

The urban transformations in Kiruna and Malmberget/Gällivare have been under way for many years but in 2018 the construction projects seriously picked up the pace, with noticeable changes in the look of the communities. RESPONSIBLE

18 THIS IS LKAB SOCIAL RESPONSIBILITY

DEVELOPMENT BEFORE PHASE-OUT

Access to land is crucial for all mining operations, and the future of LKAB and its operating locations depends on central areas of Kiruna and Malmberget being gradually moved.

LKAB is working to facilitate the transformations properties in Kiruna’s new city centre incorporat- and compensate for the impact that the mining ing homes, offices, retail premises and parking has on the people and communities affected. One facilities. LKAB will also build 1,500 new homes in important aspect is that new housing, services the coming years. New areas now being planned 10,000 and infrastructure should be completed and under include Luossavaara with 200 homes, Jägarskolan construction before LKAB responsibly phases out with 450 homes and the district in Kiruna’s new people are affected the previous developed areas. The urban transfor- city centre. In total, around 5,000 homes mations are taking place gradually, with park areas and 700,000 square metres (Mine City Parks) being constructed as the areas Construction rush in Gällivare of residential and commercial are phased out. This creates a gentle transition Since 2018 residential building work has taken off, premises will be replaced or between mine and community. and the densification and expansion of Gällivare and compensated. This means that The urban transformations in Kiruna and Malm- also of Koskullskulle can now clearly be seen. about 10,000 people – roughly berget/Gällivare have been under way for many Among other things, a brand new residential a quarter of the population of the Swedish orefields – will years, but in 2018 the construction projects seriously area is being built on Repisvaara fell near Dundret. need to move. picked up the pace – with noticeable changes in the In an area that was previously only forest, a brand look of the communities. new district is emerging at record speed. A total of 35 tenant-owner apartments have been completed Thousands of homes and premises and directly opposite them LKAB is building 88 In Kiruna LKAB will be building hundreds of new rental apartments with a view towards Dundret homes and commercial premises together with the and the centre of Gällivare. In the same area, the municipalities and other operators in the coming construction of 360 apartments is under way and years. In addition, other apartments have been these will be ready for tenants in 2019. A further added by LKAB’s relocation of older residential 100 apartments are in progress. LKAB has also buildings. built more than a hundred single-family houses for LKAB built Kiruna’s new City Hall, which was property owners who chose the option of a new opened in summer 2018, and is also to build more house rather than monetary compensation.

THIS IS LKAB 19 SOCIAL RESPONSIBILITY

The Kemi family at their new plot on URBAN TRANSFORMATION Snökristallgatan in the Repisvaara district. They are moving from an older house in FROM MINING TO MOVING Malmberget that is affected by the mining. LKAB’s underground mining The mining causes ground deformations 1– in other words, ground movements. As the iron ore is mined from the rock and brought to the surface, the ground gradually sinks.

Ground deformations The urban transformation is governed 2by the ground deformations. LKAB measures the ground movements using GPS technology. These measurements provide a basis for LKAB’s rock engineers to estimate the rate at which the ground is moving, known as ground deformation forecasts.

Agreements between LKAB and the municipalities 3Secure urban transformation requires LKAB and the municipalities to agree on how the transformations are to be implemented and who is responsible for what. Cooper- ation, collaboration and implementation agreements set out what has been agreed.

LKAB buys the buildings In good time before ground deforma 4 tions arise LKAB compensates those affected by the mining activities via financial compensation, a new home or new business premises.

Municipalities change areas in local plans to industrial zones 5Before LKAB is given permission to mine ore within a wider area, the municipalities must amend local plans to reflect the change from housing and commercial zones to industrial zones.

Our strategy is based on maximising the New construction value that we generate locally and globally, Buildings and infrastructure such as 6water, sewers, electricity and roads that are being phased out need to be com- while at the same time taking responsibility pensated for. As contracts are concluded with the municipalities, construction invest- for the impact of our operations. ments in the operating locations start to gain momentum. LKAB Fastigheter is building some of the houses themselves, but it is crucial to have more players wanting to build in the Swedish orefields.

LKAB clears the buildings and creates park areas 7 As the areas are cleared they become park areas, known as Mine City Parks and environmental zones.

Moving into the new areas New homes, shop premises, commer- 8cial properties, etc. are being built in the municipalities. More housing means that those who live in the mining communities are given more options, as both new and older houses and apartments become avail- In August 2018 LKAB handed over Kiruna’s new city hall, The Crystal, to able. The opportunity to change to newly the Municipality of Kiruna and all staff have now moved into the building. built housing is attractive to many.

20 THIS IS LKAB FOR MORE INFORMATION

VISIT LKAB.COM On our website you will find further information about the LKAB Group, our operations and the urban transformations. You can also read about career opportunities and find contact information there.

KIRUNA MINE VISITOR CENTRE Visits to our Visitor Centre on level 540 of the Kiruna Mine can be booked via Kiruna Lapland Tourist Information Centre. Tel: +46 (0)980 188 80

MINE TOUR IN MALMBERGET Contact Gällivare Tourist Information Centre for information and booking. Tel: +46 (0)970 166 60

Produced by LKAB in cooperation with Rippler Communications. Photos: Fredric Alm, Alm & ME and LKAB. Printing: Lule Grafiska.

THIS IS LKAB 3 LKAB, BOX 952, SE-971 28 LULEÅ | TEL +46 771 760 000 | WWW.LKAB.COM

4 THIS IS LKAB June 2019