The mineral reserve is LKAB's most important resource. It is the basis for our operation and stipulates demands for successful exploration work. Exploration entails securing access to the iron ore raw material.
Exploration involves identifying and investigating areas to find mineral deposits, as mineral reserves and mineral resources are LKAB's most important resource. Having a good knowledge of the mineral reserve is a basic precondition for important, long-term decisions. The exploration work is consequently a precondition for a sustainable LKAB that is competitive in the long term.
The basis for the mining operation
In order to safeguard the mining operation's long-term need for iron ore, we conduct exploration. This work is forward-looking and is always based on a 20-year perspective, in order to secure the development of the production process and the surrounding communities.
Exploration is consequently the basis for the mining operation. The key to successful planning, in addition to geological expertise, is access to land areas where ore is potentially present. This assumes respect for the surroundings, responsibility for the environment and co-operation with local businesses – particularly the reindeer industry. We are constantly evaluating the consequences of the impact that new mines have on biodiversity and we always take diversity into consideration.
LKAB carries out both exploration in the field, which involves conducting investigations in new areas, as well as exploration adjacent to existing mines.
Mineral reserves and mineral resources
Our exploration work provides us with knowledge about the mineral resources and the mineral reserves. Mineral resources comprise all the ore that could be mined commercially. A mineral reserve is that part of the resource that can be extracted profitably.
Mineral reserves and mineral resources are calculated separately and divided into various categories. The definition of a mineral resource is such a concentration of minerals in the bedrock, in such a form, quality and quantity, that reasonable potential exists for economic extraction.
In addition to exploration, mining costs and the price of ore are important factors that affect the size of the mineral resource and the mineral reserve. Every year, LKAB performs a calculation and compilation of mineral resources and mineral reserves. The calculation is performed on the basis of the industry standard developed by the Fennoscandia Review Board (FRB) in accordance with international guidelines.
A detailed calculation and compilation can be found here.
Investigation of the bedrock
In order to carry out exploration work, an exploration permit according to the Swedish Minerals Act is required, which is granted by the Chief Mining Inspector. However, an exploration permit does not grant an entitlement to carry out the work, which requires the work plan for the exploration to be distributed to all parties concerned and for none of them to have any objections to the plan.
Exploration involves no or only small-scale interventions in the area being investigated as well as some impact on the environment, as the exploration work is conducted using drilling rigs – small mobile units that do usually leave any traces behind them. In sensitive areas, the drilling is performed in frozen ground with transport on top of the snow to minimise the impact. After drilling, the visible result is a drill hole with a diameter of approximately 5 cm, fitted with a red plastic sleeve to indicate the location.
Licence and permit
Exploration is only the first step in a long journey towards possible mining. If the investigations should indicate a mineral deposit that is worth mining, there are still several major decisions and assessments to be conducted before a mine can become a reality.
For example, it is necessary to apply for a mining concession from the Mining Inspectorate of Sweden and for an environmental permit from the Land and Environment Court. In conjunction with the environmental assessment, the Court specifies the conditions that a new operation has to live up to. These permit assessments weigh various interests against each other, and there must be plenty of scope for stakeholders to have their voices heard. The entire process, including any land questions, can take anything from 5 to 15 years, and sometimes even longer than this.