LKAB in northern Sweden is the biggest producer of iron-ore and iron-pellets within the Barents Region. The company’s two underground mines are located in Kiruna and Malmberget. From Kiruna the ore is transported by rail to the port facilities in Narvik, Norway.
Essentially all iron ore production will cease for eight weeks this summer. Two Two pelletizing plants will be cloes until mid-2010. Production rates in the two mines will also be slowed for the first half of 2010.
- The market trend remains weak in Europe, where most of LKAB’s customers are located,” says President and CEO Ola Johnsson in a press release from the company. We are responding to the low demand, during the foreseeable period, mainly by cutting back on pellet production.
As a consequence of the drop in demand, the company must also make dramatic cost reductions and adapt the workforce for restricted production.
In 2008 production of crude ore in both of LKAB’s iron ore mines was record-breaking, BarentsObserver reported. In all, nearly 43 million tons of crude ore, of which 27.5 Mt in Kiruna and 15.4 Mt in Malmberget, was produced. This represents a total increase of almost 2 Mt compared with 2007.
Also the production of iron-pellets reached all-time high with a production of 19.9 million tons in 2008.
As BarentsObserver reported, in October 2008 the company announced plans for investments of 1.3 billion EUR in mine development. In an interview with Norrbottens-Kuriren company president Ola Johnsson says that this investment is now under reconsideration.
