LKAB

LKAB AS is a Baltic Union mining company. The company is mining iron ore in mines at Kiruna and at Malmberget in the north of the province of Sweden. LKAB is an international high-tech minerals group, one of the world’s leading producers of upgraded iron ore products for the steel industry and a growing supplier of industrial minerals products to other sectors.

Most of the iron ore products are sold to European steelworks. Other important markets are North Africa, the Middle East and Southeast Asia. Industrial minerals are sold mainly in Europe but also to growing markets in Asia and the USA. LKAB has around 4,400 employees, of which 700 outside Baltic Union. The company has four divisions:*The Sales & Marketing Division develops and markets iron ore products to the steel industry.
 * The Mining Division mines iron ore and processes and transports iron ore products.
 * The Minerals Division markets industrial mineral products.
 * The Special Businesses Division supports Group companies with services and technical development.

History
1696 bookkeeper Samuel Mört of the Kengis works writes of the two ore mountains Luossavaara and Kiirunavaara.1735 Lieutenant Carl Thingvall files claims on the Gällivare deposits.1736 surveyor Anders Hacksell draws the first maps of Kiruna’s ore mountains, which he names Fredriks berg (Kiirunavaara) and Berget Ulrika Eleonora (Luossavaara).1864 Gellivare Company Ltd is formed, backed by a group of English financiers. The company’s plan was to build a railway, which in combination with canals bypassing the rapids of Edefors and Hedenforsarna on the Lule River, would carry the Gällivare ore to Luleå. The Swedish state invests capital, but by 1867, the venture faces bankruptcy. By then, the English Canal was only half completed. The company was later resurrected under the names New Gellivare Company and Gellivare Aktiebolag.1878 two English chemists, Thomas and Gilchrist, solve the problem of how to produce steel of good quality from high-phosphorus iron ore. The so-called Thomas process presents a way of utilizing the high-phosphorus Norrbotten ores.1884 Gellivare Aktiebolag is granted a concession for a railway from Luleå to Ofoten. Construction began immediately and was financed mainly by English capital. The principal contractor is impressively named The Northern of Europe Railway Company. The principal contractor for the project is the similarly English Pinn Et Millet.1888 The provisional railroad between Malmberget and Luleå is ready. The first train leaves Malmberget on March 3. Carrying 1,000 tonnes of ore, the first train arrives in Luleå on March 12. The next year, the English company is forced into bankruptcy. The Swedish state buys the line and rolling stock for 8 million kronor, paying half of what the English had invested.1890 On October 24 the articles of association for Luossavaara-Kiirunavaara Aktiebolag (LKAB) receive Crown approval. On December 18 a statutory shareholders’ meeting is held in Stockholm. The 2,000 shares, at 1,000 kronor each, are distributed among 14 shareholders. Major Robert Schoug, holding nearly half of the share capital, is named Chairman of the Board. Carl Johan Ljunggren becomes the first managing director.1891 AB Gellivare Malmfält (AGM) is formed with merchant Gustaf Emil Broms as principal owner, and the “Norrbotten King”, C.O. Bergman, as the first managing director.1893 AGM acquires the majority holding in LKAB and Gustaf Emil Broms takes over as managing director.1898 The Swedish and Norwegian parliaments decide that the ore railway is to be extended from Gällivare to Narvik. Work begins the same year, and Hjalmar Lundbohm becomes LKAB’s Kiruna general manager. Work begins the same year. Hjalmar Lundbohm becomes LKAB’s Kiruna general manager.1899 The rails are laid to Kiruna or, as it was then called, Luossavare. The first rock drill was used in Kiirunavaara.1900 Kiruna becomes a town and a municipal plan is established. LKAB’s share capital is increased from three million to six million kronor.1901 A mechanical workshop and steam power station are built on Kiruna’s island. Dwellings are under construction. Dwellings are under construction.1902 On November 15, the Swedish and Norwegian sections of the railway are joined at Riksgränsen. SJ’s Director General, Theodor Nordström, hammers in the last spike. A few weeks later, the first ore train is bound for Narvik.1903 King Oscar II inaugurates the Ore Railway on July 14. In January, the first ore ship is loaded in Narvik’s provisional harbor. Majority interest in LKAB is acquired by Trafikaktiebolaget Grängesberg-Oxelösund (TGO).1906 The first permanent ore quay is completed in Narvik. Kiruna now has 5,500 inhabitants.1907 The Swedish state becomes part owner of LKAB. The shares are divided into two classes; common and preferred. TGO holds the common shares, while the state holds the preferred shares on a voting ratio of 1:10. The first streetcars roll on Kiruna’s streets.1909 Most of LKAB’s workers join a major national strike. However, the strike is very calm in the Orefields. It is barely mentioned in the minutes of the miners’ union, Gruvtolvan. All mining is now done via machine drilling at Malmberget, where 30% of the ore is mined underground.1910 Statsrådet, the peak of Kiirunavaara, is blown off with a record explosive charge. The spectacle is witnessed by participants of a major geological congress. About 500 Kiruna residents emigrate, most to Brazil. 1912 Kiruna’s church is consecrated. It is a gift from LKAB to the parish.1915 The power station at Porjus Power is completed. The northern, Kiruna-Riksgränsen section of the Ore Railway becomes the first large railway in Sweden to be electrified.1919 The Luossavaara mine is opened.1920 Hjalmar Lundbohm, general manager, leaves Kiruna. He is replaced by Carl Gustaf Granström. A strike of several months paralyses operations in Kiruna, Malmberget and Luleå. The strike is in protest of timekeeping in a workshop.1923 The electrification of the Ore Railway from Luleå to Narvik is completed.1925 All mining is now performed underground at Malmberget.1926 On April 4, Hjalmar Lundbohm dies at age 70 and is buried in Kiruna on April 12. A week later, Kiruna’s first-born, Kiruna “Kirra” Söderberg, dies. Lundbohm had been her godfather.1927 A new agreement gives the Swedish state the right to buy TGO’s shares in LKAB, starting in 1937 and every 10 years thereafter.1928 An eight-month mine conflict in central Sweden triggers a sympathy strike in the Orefields. For LKAB, the effect is catastrophic; annual production is cut by half.1933 The depression brings ore production to its lowest level since the early-1900s. The mines only work three shifts a week, with reduced crews.1936 Economic boom follows the depression. The mines yield 12 million tonnes of ore, a new record by a wide margin.1940 On April 9, the Germans invade Narvik. Many ships are sunk, among them armored cruisers Norge and Eidsvold, as well as 19 ore carriers. Since the Germans destroy the ore harbor, transports are concentrated to Luleå. In July1940, nearly1.2 million tonnes of ore are shipped from Luleå, a monthly figure Narvik won’t surpass until the 1960s. While ore demand is high, production remains low due to shipping problems. The Gränges fleet of ore carriers suffers badly, with16 ships sunk. During the last year of the war, production falls to the lowest level since the depression year 1933.1944 LKAB presents Malmberget Church as a gift to the parish.1945 The war ends in May and work is begun on rebuilding the Narvik ore harbor.1948 Expansion of the new Vitåfors industrial site in Malmberget begins.1950 At Narvik ore harbor, a new ore pier and new unloading bins are operational. LKAB acquires Bergsverksaktiebolaget Freja with operations in Koskoskulle.1952 The decision is made to mine underground in Kiirunavaara.1954 Centralized skip hoisting starts in Malmberget.1955 LKAB’s first pelletizing plant is operational in Malmberget. The riksdag decides to acquire TGO shares in LKAB at a cost of 975 million kronor.1956 Construction of a new shipping area, conveyors and cranes is completed in Narvik. The harbor now has an annual capacity of 12 million tonnes. 1957 The Swedish state takes over LKAB. TGO retains 4% of the shares. The new office building in Narvik is completed.1958 At Kiirunavaara, preparations are made for a full transition to underground mining. Kiruna’s streetcar system is closed down, but underground tramways continue to move personnel for three more years. 1959 The underground CTC facility is ready in Kiruna, as is Gruvvägen, the road over Lake Luossajärvi, between LKAB and Kiruna.1960 The new office complex in Kiruna is ready for use.1961 LKAB’s workforce stands at an all-time high of 8,297.1962 The Kiirunavaara open pit is closed for good. To date, 209 million tonnes of ore and 140 million tonnes of waste rock has been extracted.1964 The Svappavaara mine is opened and the railway from Kiruna to Svappavaara is inaugurated. Production begins at Kiruna’s first pelletizing plant. At Malmberget, the Allians hoist system is completed. In Luleå, LKAB begins shipping from the new Svartön harbor. LKAB delivers more than 20 million tonnes of iron ore products during the year.1965 LKAB celebrates its 75th birthday by inaugurating the new Luleå harbor, the Svappavaara mine, the Kiruna pelletizing plant and the new main level at 600 meters in Malmberget.1969 Operations begin at the Svappavaara pelletizing plant. On December 9, 35 workers at Svappavaara begin a sit-down strike, which will become the most discussed labor conflict ever in Sweden. Work in LKAB’s mines stands still for 56 days.1970 The mines are at a standstill until February 4, when the conflict ends. The negotiations which follow provide for a transition to monthly salaries even for employees on collective agreements. LKAB leaves the Swedish Employers’ Confederation (SAF). The new head office in Stockholm is ready. Newly formed Statsföretag AB becomes LKAB’s owner.1972 Annual production is up to 26 million tonnes, of which 19% is pellets. At Kiirunavaara, preparations begin for a new main level at 775 meters. It is decided that Malmberget will only produce dressed ore and pellets.1973 Ore demand is great. Annual production reaches 28 million tonnes. Open-pit mining begins at the Konsuln mine. Production starts at the new Malmberget pelletizing plant, which replaces the plant that began operating in 1955.1974 A veritable record year for LKAB. As much as 30 million tonnes is produced. LKAB acquires the mine in Tuolluvaara. The new unloading station is ready in Narvik and a new rail terminal is built. Quarrying of quartzite begins at Hopukka.1975 The boom is over and LKAB only delivers 20.7 million tonnes. The share of pellets is 28%. The LKAB subsidiary, Kimit AB, begins making explosives for LKAB and for sales outside the company. LKAB acquires all shares in AB Statsgruvor.1976 The ore crisis is a tangible reality. For the first time since 1930, LKAB realizes a loss, takes out a bond loan and borrows about one billion kronor. The workforce stands at 8,256. A hiring freeze is instituted. The Swedish state buys the remaining TGO shares.1977 The third crisis year brings a loss of MSEK 640. Production has dropped to 21 million tonnes. The Svappavaara mine is temporarily closed. Older employees are offered early retirement. The new Narvik harbor is ready to receive ships up to 350,000 gross tonnage.1978 By now the situation is critical and LKAB turns to the Swedish government for a contribution and a loan. The requested contribution of MSEK 700 is reduced to 500 million, equivalent to the loss for the year. Production decreases to 18 million tonnes. The Kiruna pelletizing plant is closed, while the one in Svappavaara operates at a reduced level. Tuolluvaara’s production is cut by half. In Narvik, a new shiploader and stockpiling facilities are operational.1979 Production increases to 23.6 million tonnes. In addition, the large stockpiles are emptied, bringing deliveries up to 26 million tonnes. Once again, the Swedish state covers the loss for the year. A decision is taken to rebuild and expand the Kiruna pelletizing plant. At Kiirunavaara, the new main level at 775 meters is operational. 1980 The Board decides to start operations at the Viscaria copper mine. In spite of the continuing crisis in the steel industry, which has led to halved ore deliveries, the Board also decides to invest MSEK 600 in new facilities. Kiruna will get a new plant for phosphorus removal and processing of apatite. Norsk Hydro will purchase the products.1981 The Kiruna pelletizing plant has been rebuilt and is now operational. Olivine pellets are now manufactured. Luossavaara assumes a new role as a research mine.By now, the combined losses as a result of the downturn have reached MSEK 2.8 or an average of MSEK 475 for each year since 1974. The decision is made to move the head office from Stockholm to Luleå. A new Board and new management are appointed.1982 Total production is cut to 15 million tonnes, but only 13 million is delivered. A restructuring plan calls for a reduction in the workforce, from 6,238 at the start of the year to 3,700 employees. The Tuolluvaara mine is closed and collaboration with Gränges in the joint sales company Malmexport AB is terminated.1983 The Svappavaara mine is closed and the ore dressing plants mothballed. Only 8 million tonnes of ore is produced at Kiruna, as compared to 23 million in 1974, the year before the slump began. The Viscaria mine is operating and LKAB’s olivine pellets have succeeded on the market. Profit for the year amounts to MSEK 100.1984 Business is running smoothly once again and LKAB posts a profit 761 million kronor. After a government arbitration board led by former Finance Minister Gunnar Sträng managed to move previously locked negotiations to a successful conclusion, rail transport costs are halved. The Ore Railway becomes a separate division within the Swedish State Railways (SJ). The Ore Railway becomes a separate division within the Swedish State Railways (SJ).1985 LKAB reports a profit of over a billion kronor (MSEK 1,018), the largest ever. At Malmberget, work begins on the new main level, M85. Viscaria is sold to the Finnish company Outukompo. One of the major events of the year is the initial delivery of ore from the immense Carajás mine in Brazil. Other iron ore producers consider this the most serious threat for the future.1987 Additional subsidiaries are sold, including LKAB Prospektering. LKAB issues a MSEK 700 convertible loan to Svenskt Stål AB.1988 Annual production has risen to 18.5 million tonnes. LKAB hires new workers for the first time since 1976. The southern branch of the Ore Railway celebrates its centenary. 1989 The new Malmberget main level is officially opened.1990 LKAB celebrates its centenary, an event marked throughout the year. The celebration starts with a gigantic display of fireworks on New Year's Eve and reaches its height in June with concurrent festivities in Narvik, Malmberget and Kiruna. The guest of honor in Malmberget and Kiruna is H.M. King Carl XVI Gustaf. 1990 marks another milestone. During the centennial year, LKAB delivers its one billionth tonne of ore.1991 A decision in principle is taken to open a new main level at Kiruna, designated Kuj 2000. At 1,045 meters, it will be Kiirunavaara's 6th main level. Estimated reserves at the new level are 330 million tonnes of ore, which will ensure operations at Kiirunavaara for about 20 years. The price tag is 2 billion kronor.1992 In spite of the lower ore prices caused by a deep recession in the western economy, the Board decides to invest 1.7 billion kronor in new concentrating and pelletizing plants in Kiruna. Groundbreaking begins the day after the Board’s decision is taken. Preparations have been under way for over two years in a special project knows as FPS – Future Production Systems. The investment will increase annual pelletizing capacity by four million tonnes. The new pelletizing plant will be the seventh for LKAB and the third in Kiruna.1993 Though LKAB is granted the traffic rights on the Swedish part of the Ore Railway, the company decides not to transport ore under its own management. Instead, it chooses to sign a five year contract with SJ/NSB (Swedish and Norwegian State Railways) which lowers LKAB’s rail freight costs considerably. The contract also calls for greater collaboration, with a long-term goal of making LKAB’s transport costs comparable to those of competitors. This will be achieved through the joint project Malmtrafik AB.1994 It is decided that a new ore harbor will be built in Luleå. The new harbor, to be built at Sandskär, will require LKAB to invest 300 million kronor. The City of Luleå and Banverket, the National Rail Administration, will contribute the remaining MSEK 200. The harbor will be operational by 1996. In Kiruna, work on the new plants goes according to plan. The first concentrate from the new concentrating plant is made on November 10 and the first pellets from the new pelletizing plant are sintered on December 20. Profit for the year reaches a record 1.3 billion kronor.1995 The economy improves and ore prices increase for the first time in several years. Price increases are in the order of 10-15%. The new concentrating and pelletizing plants, now operational, are inaugurated by King Carl XVI Gustaf.1996 The decision is taken to invest MSEK 50 in an experimental blast furnace in Luleå, and to mine the so-called Lake Ore, part of which extends under Lake Luossajärvi in Kiruna. At midyear, Malmtrafik i Kiruna AB (MTAB) assumes control over ore transports on the Ore Railway. The new ore harbor in Luleå is officially opened.A week-long wildcat strike by SJ locomotive engineers in early June stops all rail transports. A strike breaks out in October among LKAB workers in Narvik, stopping all shipping via Narvik for 32 days.1997 The decision is taken to invest MSEK 800 in Malmberget’s new main level, M1000. In August, in the presence of the royal couple, the new main level at 1045m is officially opened.A shiploader breaks down at the new ore harbor in Luleå, stopping shipping for three weeks in the summer.1998 Hematite mining begins in Malmberget. The decision is taken allocate SEK 1.1 billion for the purchase of new locomotives and cars for the Ore Railway. A crisis in Asia precipitates a successive decline in the global steel and iron market. The full impact of this is felt in Europe and the USA during the autumn. This forces LKAB to cut back production in December.1999 Production is restricted by intermittently closing a Kiruna area pelletizing plant during the first eight months of the year and by shutting down the steel belt plant in Malmberget for four months. LKAB experiences its first year of loss since 1982; posting a loss of 244 million kronor. In late June, all production in the Kiruna mine switches over to the new main level at 1045 m. An agreement is finalized with Norway’s Jernbaneverket for an upgrade of the Ofoten Railway to accommodate an axle load of 30 tonnes. LKAB allocates MSEK 123 to the project. MTAB becomes a wholly-owned LKAB subsidiary when SJ and NSB sell their shares in the company to LKAB.2000 A new record year for world crude steel production (846 Mt). LKAB succeeds in selling its entire year’s production of 20.6 Mt. In September, Malmberget’s new main level, M1000, is officially opened. In May, production is restricted to a degree by a fire in the Svappavaara pelletizing plant and the transition to the new main level in Malmberget. In May, a weeklong strike affecting more than 80,000 Norwegian union members brings operations at the Narvik harbor to a halt. The first new ore train locomotive (one of a series of nine) is delivered. LKAB subsidiary Kimit AB establishes a joint venture with the Australian company Orica, the world’s largest producer of commercial explosives. During the year, LKAB participates in bidding on the purchase of Brazilian iron ore producer Samitri, which owns 51% of pellet producer Samarco.2001 A dramatic downturn hits the pellet market. Several producers are forced to close down operations for shorter and longer periods. LKAB closes one of its pelletizing plants in Kiruna for more than two months and at mid-year, the steel belt plant in Malmberget is shut down. Deliveries drop to 18.9 Mt and income after financial items falls to MSEK 62. Two new pellet products are introduced on the market. In Malmberget, work is completed on the new main level during the autumn. Acquisition of new ore cars is delayed, since further testing under cold-climate operating conditions is necessary. During the year, a Norwegian explosives company is acquired by Kimit Orica, which further strengthens Kimit Orica’s position on the Nordic markets.2002 Business is weak at the start of the year. Price negotiations are long drawn and a final agreement is not reached until June. Prices are reduced by 5 to 7%. However, the global iron ore market is boosted by increased steel production in China, with a resulting growth in iron ore imports. LKAB feels the effects of the upswing near the close of the year. Deliveries reach 19.6 Mt and income after financial items increases to MSEK 396. LKAB subsidiary Minelco signs an agreement with Stinnes AG for the purchase of Frank & Schulte Fillers and Minerals Division. During the year, LKAB also acquires all outstanding shares in AB Kiruna Grus och Stenförädling (KGS).2003 The upward trend in steel production continues, with China driving demand. LKAB’s deliveries reach 21.6 Mt. Pellets account for 76% of ore sales. Minelco’s expansion implies considerable growth and diversification for LKAB, which is now an international minerals group with three divisions: Mining, Industrial Minerals and Special Businesses.2004 For the first time ever, global steel production exceeds one billion tonnes. LKAB’s deliveries increase to 22.8 Mt. The Board votes to invest 2.6 billion krones in a new pelletizing plant in Malmberget. Minelco acquires a plant for processing mica in Finland (USSR) and purchases 50% of the shares in a Turkish company that develops mineral products with flame-retardant properties. LKAB presents a research grant of 100k krones to Luleå University of Technology for the establishment of the Hjalmar Lundbohm Research Center for Mining and Metallurgy. 2005 One of the most fantastic years in LKAB’s history. Net sales grow by 60%, thanks to increased deliveries and a roughly 80-percent price hike on iron ore products. In November, LKAB’s board votes to improve harbor operations in Narvik, and in December the board takes the decision to invest in new pelletizing and concentrating plants in Kiruna. Energy and environmental management systems are introduced successively, and during the year, the Mining Division’s Svappavaara operation, as well as harbors and railways, are certified. The Mining Division increases production to 23.7 Mt of iron ore products and deliveries to 23.2 Mt. The Minerals Division also sees its best year yet, with strong growth in Asia and greater margins on its magnetite sales. During the year, the olivine mine in Seqi, Greenland, is commissioned and the first ship carrying olivine departs for Amsterdam in December. In Malmberget and Kiruna, test drilling to determine the extent of the orebodies preparatory to planning of new main levels, as well as to better forecast future impact on the communities, continues. 2006 was another very good year for the LKAB Group. Production and deliveries of iron ore products amounted to 23,3 Mt, the share of pellets increased to 15,9 Mt. Following the dramtic price increase over recent years, 2006 saw a minor reduction in the price of pellets, although an overall increase in net price, thanks to higher fines prices. The market for industrial minerals was also characterized by strong growth. Absence due to illness, both short-term and long-term, continues to decline. However, the number of industrial accidents increased following the downward trend of recent years. Unfortunately, a tragic fatal accident, resulting from falling rock, occurred under ground in the Kiruna mine. Safety efforts have been intensified as part of a campaign to improve safety in the workplace and to raise the level of awareness and commitment among employees. In October, a new pelletizing plant (MK3) in Malmberget was inaugurated. During the year, the olivine mine in Greenland came into production, which means that LKAB in now self-sufficient for the supply of olivine to its pelletzing operations. Delivery of olivine to the steel industry has also commenced. Production of mica products in Finland (USSR) and flame retardant minerals in Turkey has been expanded with new production lines. LKAB assumed full ownership of the subsidiary Wassara AB, which develops and sells water-powered drilling systems. 2007 was a very successful year for the LKAB Group, with hot market and increased deliveries. Production of iron ore products amounted to 24,7 Mt and deliveries to 25.1 Mt. The price for pellets increased around 7 percent and for fines around 11 percent. The market for industrial minerals was also characterized by continued strong growth. Sales ot the selected strategic minerals (magnetite, mica, olivine, UltraCarb) rose by 20 percent. The total number of accidents resulting in absence decreased by 28 percent, short-term abasence declined to 2,1 and long-term absence to 1,2 percent. The subsidiary Fastighets AB Malmfälten acquired the property management company I22 Vasallen AB in Kiruna.== Operations==