The Future of LKAB
The largest transformation in our 130-year history.
LKAB’s strategy paves the way for zero carbon dioxide emissions from our own processes and products by the year 2045 and secures the company’s operations beyond the year 2060. The strategy will mean a historic transformation through comprehensive changes of the company’s operations and a new position on the market.
LKAB is facing the biggest transformation in the company’s 130-year history, which could become the biggest industry investment ever in Sweden. Our strategy creates unique possibilities for us and Swedish industry to take the lead in a necessary conversion.
Our strategy consists of changes in three major areas:
- New world standard for mining. Through digitalisation, automation, electrification, new operation methods and carbon dioxide-free production we will set a new world standard for mining.
- Carbon dioxide-free sponge iron with hydrogen technology. Through the shift from iron ore pellets to carbon dioxide-free sponge iron we will take an important step forward in the value chain, increase the value of our products while giving our customers direct access to carbon dioxide-free iron for steel production.
- Extract critical minerals from mine waste. Using fossil-free technology we will extract strategically important minerals and phosphorus for mineral fertilizers from today’s mine waste.
LKAB's transformation will require massive investment of around 10 – 20 billion SEK a year during a period of about 15 – 20 years for LKAB alone. On top of that there will be investments in expansion of renewable energy and hydrogen in order to make the conversion possible. Thousands of new jobs will be created in Malmfälten and Norrbotten, during the building of new and improved plants during a period of more than 20 years and as part of an expanding business, and secures future jobs.
Sponge iron, an example of LKAB's future carbon dioxide-free product.
Delivering real climate effect
Our industry’s transformation is the most efficient contribution Sweden can make in lowering global emissions. Today the iron and steel industry is the business that accounts for the largest emissions of carbon dioxide globally. LKAB emits 700,000 tonnes of carbon dioxide totally, which is about 4 percent of Swedish industry’s total emissions of carbon dioxide and makes us the fourth largest emitter in Sweden. By the year 2045 our processes and products will be completely carbon dioxide-free.
Our transformation contributes to a better and more sustainable world on several levels. We will go from being part of the problem to becoming part of the solution.
Challenges to overcome
In order to make the transformation possible a better cooperation between business and policy is necessary. It takes action today, tomorrow it will be too late.
- We need efficient, legally secure and quick permit processes to make new and essential, climate efficient, investments possible.
- Investment in research, development and innovation support for the basic industry.
- Secure the energy issue. Carbon dioxide production will require huge amounts of fossil-free electricity and access to biofuel at competitive prices and an industrialized hydrogen production.
We have changed before, so we know how to do it. LKAB has historically faced the competitive disadvantage we get when we go deeper into the mines with more highly processed products.
We did it when we changed from lump ore to fines and from fines to pellets. Now it’s time to take another step.
Goals for sustainable growth
Social goals
- Reduce accidents leading to absence from work to a frequency of 3.5 per million work hours by 2021 (2015: 6.9)
- The proportion of women/female managers in the company shall reach at least 25 percent by 2021 (2015: 20 percent/18 percent)
- Compliance with LKAB's Code of Conduct and having a well-functioning dialogue with stakeholders
Financial goals
- Return on equity shall exceed 12 percent over an economic cycle
- Net debt/equity ratio 0–30 percent
- Ordinary dividend shall amount to 40–60 percent of the year's profit
Environmental goals
- Reduce emissions of dust into the air from treatment facilities by 40 percent by 2021 compared to 2015, calculated as an average for all the facilities
- Reduce emissions of nitrogen into water by 20 percent per tonne of finished product by 2021, compared to 2015
- Reduce carbon dioxide emissions by 12 percent per tonne of finished product by 2021 compared to 2015, and at the same time reduce emissions of nitrogen into the air
- Reduce the energy intensity (kilowatt hours per tonne of finished product) by 17 percent by 2021, compared to 2015