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.
Strategic goals
The goals are split into the following three areas:
Climate-efficient, sustainable transformation
We will lead the transformation of the iron and steel industry for a better climate and sustainable development. Our carbon-free sponge iron and critical minerals are essential for global transformation in every industry and society. We are constantly developing innovations that contribute to circular solutions and instead of being a part of the problem we will start to become a part of the solution.
- Reduced carbon emissions by around 25 percent in our own operations and those of our customers and suppliers. The emission target is in line with the UN’s Paris agreement governing global temperature rise and well below 2 degrees.
- Energy consumption reduced by 10 percent.
- Greater biodiversity.
A safe, healthy and stimulating workplace that drives transformation
Together, we will be the best workplace for the skills we need for the transformation. This will help us contribute to the future prosperity of communities that are rewarding to stay, live and work in. The transformation we are embarking on, will only be possible if the best employees work for us.
- Accidents with sick leave (LTA) fewer than two per million working hours, and long sick leave of max 0.8 percent of the workforce per quarter.
- A more equal gender distribution in management groups with at least 40 percent of the under-represented gender.
- At least 95 percent of critical skills positions to be filled with qualified candidates.
Stable, efficient operations for responsible transformation
Sustainable finances and responsible business provide more than just security for our owners, customers, suppliers and employees. In order to make the investments needed to drive transformation, we must increase our sales and raise productivity. Financial sustainability goes hand-in-hand with environmental and social sustainability.