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Sustainability or(e) profit? World-leading iron miner LKAB goes for both

Yesterday, world-renowned LKAB (Luossavaara-Kiirunavaara AB) unveiled significant environmental friendly plans for its future iron ore mining business. And it is about time, the international high-tech mining and minerals group has mined unique iron ore from northern Sweden for over 130 years, but global distribution and production of iron is far from environmentally friendly. Mining is currently responsible for 4 to 7 per cent of greenhouse gas emissions globally.

So, what exactly is LKAB hoping to achieve? The goal is equally ambitious as it is long-spun: net-zero carbon emissions from its own processes and products by 2045, which secures the company’s operations with expanded mining beyond 2060. The transformation will require investments of around SEK 10-20 billion a year, and with 25 years to go, the total cost is estimated at around SEK 400 billion. It will be the biggest infrastructural transformation for Sweden in modern times.

— The market for iron and steel will grow, and at the same time, the global economy is shifting towards a carbon-free future. Our carbon-free products will play an important part in the production of railways, wind farms, electric vehicles and industrial machinery. We will go from being part of the problem to being an important part of the solution, says Jan Moström, President and CEO of LKAB.

The significant transformation of LKAB is possible thanks to the development of sponge iron, that hopefully will completely replace iron ore pellets down the line. The sponge iron can be produced with carbon-free methods, unlike pellets.

Sponge iron.

But the determined transition won’t come easy. Permits, energy requirements and better conditions for research, development and innovation within the primary industry is still not fully available for LKAB. And in the bureaucracy-laden political landscape that Sweden is known for, it can be a complex transition. Pia Perhrson, one of Sweden’s most experienced environmental lawyers, wants to see a change from the inside.

— The environmental courts are already overburdened. It takes a very long time to get permits cleareed. The investigations [for environmental cases] are piling up, and covid-19 has only made the situation worse, she says to Fplus.

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