Need FOR STEEL. - why we have to grow with our customers and distribute more iron ore products

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1 No TILLVÄXTMOTOR SKAPAR TRYGGHET OCH FRAMTIDSTRO UNGA I MALMFÄLTEN TJÄNAR BÄST I LANDET BOENDE: BRA ATT LKAB TAR ANSVARET Need FOR STEEL - why we have to grow with our customers and distribute more iron ore products

2 The future shines BRIGHT in Northern Sweden LKAB mines and processes Norrbotten s unique iron ore for the global steel market. The Group has annual sales of around SEK 30 billion and also covers industrial minerals, drilling systems, rail haulage, rock and engineering services, explosives and property management. LKAB has just over 4,200 employees in 14 countries. Together, we make the world s most climate-smart iron ore product, LKAB Green Pellets.

3 TILLVÄXTMOTOR SKAPAR TRYGGHET OCH FRAMTIDSTRO UNGA I MALMFÄLTEN TJÄNAR BÄST I LANDET BOENDE: BRA ATT LKAB TAR ANSVARET No In this issue KM ON A LITRE OF GAS LKAB SPONSORS THE PROJECT Need FOR STEEL - why we have to grow with our customers and distribute more iron ore-products Cover photo Fredric Alm INNOVATION. EVERYTHING BEGINS WITH AN IDEA THE MINING INDUSTRY ATTRACTS MORE WOMEN WARMTH AND ROOM TO MOVE IN SWEDEN S DEEPEST WORKSHOP NEW PLANT WILL REDUCE DUST KAMILLA AT THE HEART OF THINGS SECRET WEAPON DEVELOPS TOMORROW S PELLETS VISIT LKAB LKAB s visitor information function Kiruna, tel. +46 (0) , +46 (0) PUBLIC VISITS Kiruna Tourism Office, tel. +46 (0) Gällivare Tourism Office, tel. +46 (0) Box 952, SE Luleå, Sweden. Tel. +46 (0) Fax +46 (0) Welcome to a confident tomorrow! Yes, we re part of it. Our iron ore is an important part of the growth and development going on around the world. The OECD estimates that 3 billion people will leave poverty and enter the middle class by People will enjoy better lives and communities, and companies will grow and create wealth. Our iron ore, which is processed into steel, is necessary to achieve this journey to prosperity. As the world grows, so does the demand for iron ore; we meet this demand with increasing volumes of iron ore products. This leads in turn to investments in new mines and new levels in our underground mines. The investments themselves generate growth in the region we operate in, as they create many jobs and the basis for more companies to grow and flourish. So let LKAB Magazine introduce you to our world and a confident tomorrow! Frank Hojem Public Relations Director LKAB Välkommen till framtidstron! Ja, vi är en del av den. Vår järnmalm är en viktig del av den tillväxt och utveckling som skapas runt om i världen. OECD beräknar att 3 miljarder människor kommer att gå från fattigdom till medelklass till år Människor får bättre liv och samhällen och företag växer och skapar värden. Vår järnmalm, som förädlas till stål, är nödvändig för att klara denna välståndsresa. När världen växer ökar behovet av järnmalm och det möter vi med ökade volymer järnmalmsprodukter. Det leder i sin tur till investeringar i nya gruvor och nya nivåer i våra underjordsgruvor. Investeringar i sig som i sin tur genererar tillväxt i den region som vi verkar i då det skapar många jobb och en grund för fler företag att blomstra och växa. Här i LKAB Magazine möter du vår värld, en värld full av framtidstro. Frank Hojem Kommunikationsdirektör LKAB PRODUCED BY: LKAB Communications in collaboration with Vinter PUBLISHER: Frank Hojem EDITOR: Ronny Olovsson GRAPHIC DESIGNER: Peter Kemi PRINTED BY: GTC NORDIC ECOLABEL PRINT 4 L K A B M A G A Z I N E 5 : L K A B M A G A Z I N E 5 :

4 Editorial Lars-Eric Aaro LARS-ERIC AARO A GLOBAL OPERATOR WITH LOCAL ROOTS FAMILY: Wife Siw and two sons RESIDES: Luleå, Sweden CURRENT POSITION: President and CEO, LKAB, since January L K A B M A G A Z I N E 5 : Here at LKAB we naturally see the Malmfälten region as our most important base. But not everyone reflects on how dependent we are on the world at large, the needs of people all over the world and the decisions they make. We need to be just as quick on our feet in the global arena as we are confident and firmly rooted here at home. We meet our competitors everyday in the marketplace, and one thing I can tell you, they re not from just down the road. Our competitors are domiciled in places like Brazil and Australia and they never stand still. Quite the contrary. The Australian company Fourtescue is an iron ore producer that didn t even exist in 2008, let alone ran any mines. Today it produces the equivalent of four LKABs just over 150 million tonnes of iron ore products. This is enormous growth, and in order to respond to it we must first understand what is happening and why. We have a unique opportunity to compete with the world at large if we cooperate and put each other s knowledge to good use. But... we need to be smarter and faster. Because knowledge shows us the way ahead, we will be investing in the LKAB Academy to promote the development of Sweden s best schools in the Malmfälten region. For the same reason we also have a close, long-term collaboration with Luleå University of Technology. The research environment we are in the process of building in Luleå and Norrbotten is unique. We have all the necessary components for success. Our industry enjoys strong companies and capable suppliers, large and small. Our experimental blast furnace constitutes a unique demonstration facility. We have an institute in the form of our collaborative partner Swerea Mefos, and most importantly, a university for both education and research. We are on our way to building a world-class research environment, and it s R&D that will make our products better and allow us to meet the competition head on. We currently enjoy a lead of around 4 to 5 years, but our competitors are making rapid advances. We cannot afford to stand still for a moment. LKAB is currently studying the possibility of creating a new research facility for direct reduction, which is the fastest-growing, smartest green method for ironmaking. We are determined to maintain our lead. When American politicians squabble about their federal budget it naturally affects us at home here in the Malmfälten region, too. Growing economic uncertainties have many consequences. Companies get jittery and investments fall. People buy fewer washing machines, refrigerators and cars. Major infrastructure investments such as bridges, railroads and ports are put on the back burner. This all means steel consumption falls off. We must constantly bear this in mind and build up our knowledge about the world around us. Because when we see what s happening around us, it s easier to draw the right conclusions. When the market grows, so too must LKAB if it is to maintain its market share. Growth is the way forward. Knowledge will lead the way ahead Att vi på LKAB har vår viktigaste bas i Malmfälten är en självklarhet. Men många reflekterar inte över hur beroende vi är av omvärlden och de behov som människor runt hela jorden har och vilka beslut de fattar. Lika tryggt som vi står på hemmaplan, lika snabbfotade måste vi därför vara på den globala spelplanen. Varje dag möter vi våra konkurrenter ute på marknaden, och jag kan avslöja en sak, de kommer inte från Boden eller Arboga. Våra konkurrenter har sin hemvist i Brasilien eller Australien och de står aldrig still, tvärt om. Australienska Fourtescue är en järnmalmsproducent som inte fanns år Ännu mindre hade de någon gruva. Idag producerar de motsvarande 4 stycken LKAB, drygt 150 miljoner ton järnmalmsprodukter. En enorm tillväxttakt, och för att kunna möta det måste vi förstå vad som sker och varför. Vi har en unik chans att möta konkurrensen från omvärlden om vi samverkar och drar nytta av varandras kunskap. Men! Vi måste bli både smartare och snabbare. Det är kunskap som kommer att leda oss framåt. Därför satsar vi på LKAB Akademi som ska underlätta utvecklingen mot Sveriges bästa skolor i Malmfälten. Därför har vi också ett nära och långsiktigt samarbete med Luleå Tekniska Universitet. Den forskningsmiljö som vi håller på att bygga upp i Luleå och Norrbotten är unik. Vi har alla viktiga pusselbitar för framgång. Vi har starka företag inom vår näring och duktiga leverantörer, både större och mindre. Vi har en unik demonstrationsanläggning i vår experimentmasugn. Vi har instituten i vår samarbetspartner Swerea Mefos och inte minst har vi universitetet med både utbildning och forskning. Vi är på väg att bygga en forskningsmiljö i världsklass, och genom forskning och utveckling kan våra produkter bli bättre och det är så vi kan möta konkurrensen. I dag har vi ett teknologiskt försprång på 4-5 år, men våra konkurrenter springer fort framåt. Vi måste ständigt röra oss och aldrig stå stilla. Därför undersöker nu LKAB möjligheterna att skapa en ny forskningsanläggning för direktreduktion, som är den mest snabbväxande och klimatsmarta metoden för järnframställning. Vi har bestämt oss att behålla vår ledning. När de amerikanska politikerna bråkar om statsbudgeten, ja då påverkar det oss här hemma i Malmfälten också. Om osäkerheterna i ekonomin växer får det flera konsekvenser. Då drar företagen åt sig öronen så att investeringarna minskar. Människor handlar färre tvättmaskiner, kylskåp och bilar. Stora satsningar på infrastruktur som broar, järnvägar och hamnar läggs på is. Allt det skulle göra att stålkonsumtionen avtar. Vi måste hela tiden ha det perspektivet och bygga kunskap om världen runt omkring oss. För när vi ser vad som sker runt omkring oss blir slutsatsen enklare. När vår marknad växer då måste också LKAB växa för att bibehålla våra marknadsandelar. Tillväxt är vår väg framåt. L K A B M A G A Z I N E 5 :

5 LKAB in figures Welcome to LKAB s world An industrial group like LKAB is a fascinating world of enormous volumes and amazing facts. Here are some key figures to give you a deeper understanding of LKAB s operations. 11,023 MILLION KRONOR IN PRE-TAX PROFIT -13% LKAB S SALES IN 2012 LKAB REALLOCATED 2 MILLION TONNES AMONG ITS CUSTOMERS DURING THE YEAR, BOTH WITHIN EUROPE AND BETWEEN CONTINENTS BY 2015 LKAB FASTIGHETER WILL HAVE BUILT 500 NEW HOMES IN THE MUNICIPALITIES OF KIRUNA AND GÄLLIVARE 30% LKAB KIMIT S SHARE OF SWEDEN S TOTAL EXPLOSIVES PRODUCTION RECORD DELIVERIES: 26.3 MILLION TONNES OF IRON ORE PRODUCTS 1,500 26,971 MILLION KRONOR TO EXPAND FLUE GAS CLEANING IN ALL SIX PELLETIZING PLANTS NO8 LKAB S POSITION AMONG SWEDISH EXPORT COMPANIES IN MT 755 NUMBER OF IRON ORE PELLETS LKAB PRODUCES PER SECOND MILLION KRONOR IN SALES IN ,199 PERMANENT EMPLOYEES AS PER 31 DECEMBER % LKAB S DELIVERIES IN 2012 Great prospects AND opportunities at LKAB Great prospects AND opportunities at LKAB We regard our operation, our employees and the places we work at as a totality. It is not just important to have meaningful, challenging jobs; we also need to feel at home beyond the workplace in the community, at the café, the theatre or out on the ice on a sunny day. Every aspect is important when building a winning team. If you would like to know more about the advantages here at LKAB, feel free to contact us at lkab.com. We regard our operation, our employees and the places we work at as a totality. It is not just important to have meaningful, challenging jobs, we also need to feel at home beyond the workplace in the community, at the café, the theatre or out on the ice on a sunny day. Every aspect is important when building a winning team. If you would like to know more about the advantages here at LKAB, feel free to contact us at lkab.com. PERFORMANCE IN IRONMAKING LKAB mines and processes Norrbotten s unique iron ore for the global steel market. The Group has annual sales of around SEK 30 billion and also covers industrial minerals, drilling systems, rail haulage, rock and engineering services, explosives and property management. LKAB has just over 4,200 employees in 14 countries. Together we make the world s most climatesmart iron ore product, LKAB Green Pellets. 250,000M 3 PRODUCTION OF OVER 250,000 M 3 OF CONCRETE PER YEAR MAKES LKAB BERG & BETONG THE WORLD S LARGEST PRODUCER OF SHOTCRETE. THREE NEW MINES IN SVAPPAVAARA WILL ENSURE A DELIVERY VOLUME OF 37 MILLION TONNES OF FINISHED IRON ORE PRODUCTS IN MINELCO, WHICH CHANGED ITS NAME TO LKAB MINERALS 1 JULY 2013, HAS 360 EMPLOYEES 5,808 LKAB INVESTED SEK 5,808 MILLION IN ITS FACILITIES IN OPTIMISM IS STRONG. LKAB WASSARA M LKAB M DRILL RIGS EQUIPPED WITH THE LKAB WASSARA CAN DRILL HOLES UP TO 55 METRES HIGH. THIS MEANS THAT EACH SET OF HOLES GIVES MORE THAN EIGHT TIMES AS MUCH IRON ORE AS IT DID 25 YEARS AGO. LKAB mines and processes Norrbotten s unique iron ore for the global steel market. The Group has annual sales of around SEK 30 billion and also covers industrial minerals, drilling systems, rail haulage, rock and engineering services, explosives and property management. LKAB has just over 4,200 employees in 14 countries. Together, we make the world s most climate-smart iron ore product, LKAB Green Pellets. 8 L K A B M A G A Z I N E 5 :

6 Inauguration Unique laboratory One-of-a-kind maintenance lab opened in Kiruna The one-of-a-kind emaintenance Lab was inaugurated in Kiruna s Kunskapsparken (Knowledge Park). The organizations behind the lab which is a five-year project include LTU, LKAB, LKAB Malmtrafik, Lappland s municipal association and Progressum. The objective is to create an infrastructure to satisfy current and future skills-supply needs and technological development concerning maintenance in the Malmfälten region. In connection with the inauguration, LTU doctoral candidates Esi Maan Nunoo and Cecilia Simma were recruited to the emaintenance lab to work on research projects within condition monitoring and key ratios for control and follow-up. The inauguration attracted participants from both commerce and education. Professor Ramin Karim from the Division of Operation, Maintenance and Acoustics at LTU proudly presented the new maintenance lab. By: Ulrika Westerberg Photo: G. Rúnar Gudmundsson LTU doctoral candidates Esi Maan Nunoo and Cecilia Simma took part in the inauguration of their new workplace. Sten Askmyr, Departmental Manager at LKAB, and Anders Kitok, Senior Vice President, Energy & Climate. Maria Ryytty, Section Manager at LKAB and mentor for doctoral candidate Esi Maan Nunoo, celebrated the inauguration together with her son, Tim Ryytty. Monica Lundkvist, Head of Adult Education at Lapplands Lärcentra (Learning Centres) and Professor Ramin Karim from the Division of Operation, Maintenance and Acoustics at LTU, took a look at the lab s technology. Miriam Isaksson Mettävainio and Krister Fältmark were curious about the new maintenance lab. SVENSK SAMMANFATTNING Lennart Andersson, Lappland s Municipal Association Secretary, and Tony Järlström, MD at Progressum. Markus Petäjäniemi, LKAB s Senior Vice President, Mining & Logistics, declared the new lab open. Olov Candell, Kjell Karlsson and Per Granell from SAAB Supplier System were invited guests. Det världsunika underhållslabbet emaintenance Lab har invigts i Kunskapsparken i Kiruna. Bakom labbet, som är ett femårigt projekt, står bland annat LTU, LKAB, LKAB Malmtrafik, Lapplands kommunalförbund och Progressum. Syftet är att skapa en infrastruktur som kan tillgodose dagens och framtida behov av kompetensförsörjning och teknikutveckling inom underhåll i Malmfälten 10 L K A B M A G A Z I N E 5 : L K A B M A G A Z I N E 5 :

7 Research Green Car, Baldos III With their very own, self-built green car Baldos III nine students from Luleå University of Technology succeeded in driving 288 km using energy equivalent to one litre of gasoline. LKAB sponsors the project. THEY DROVE ALMOST 300 KM ON A LITRE OF GAS Baldos III first saw the light of day as a finished product outside LTU on May 8 this year. The nine mechanical engineering students unveiled their new green car under the watchful gaze of the public and media. LKAB the project sponsor was represented by Annika Jakobsson, Project Coordinator from the marketing department. We re happy to take part in university projects and this one conforms fully with LKAB s image as an energyefficient, climate-smart company. The students have done a fantastic job and they really had faith in their car, says Annika. A FEW DAYS LATER Baldos III and the nine students were off to Rotterdam. They represented LTU in the Shell Eco The car attracted a great deal of attention when it was unveiled to the public at Luleå University of Technology. Marathon competition held May. The challenge was to drive the car as far as possible on a track with energy equivalent to one litre of gasoline. Baldos III placed second in its class. This means we have Europe s second most fuel-efficient car. Our goal was to drive 300 km. We reached 288, so we are incredibly pleased, says Jonathan Ovesson, one of the students in the team. By comparison, the car s predecessor, Baldos II, covered 230 km on one litre of gasoline in the 2012 competition. Our most important goal was to beat Baldos II and we did, declared Ovesson. ALL OF THE green cars hitherto built by LTU were built from scratch. But things were different with Baldos III. The frame is built to enable re-use and further development, which is yet another step forward in environmental terms. By: Maria Östlund. Photo: Team Baldos, Annika Jakobsson SVENSK SAMMANFATTNING 28, 8 mil på en liter bensin Med den egenhändigt byggda miljöbilen Baldos III lyckades nio studenter vid Luleå tekniska universitet köra 28,8 mil på energin motsvarande en liter bensin. Det betydde en andraplats i klassen i tävlingen Shell Eco Marathon som avgjordes i Rotterdam i maj. Baldos III on the Shell Eco Marathon track in Rotterdam, where it placed second in its class. Hybrids are on the move. Climate-smart transportation Kiruna s first plug-in hybrid cars have rolled out of the showrooms and into the LKAB area they are quiet, modern, efficient and climate smart. Two of the drivers are Allan Eriksson, Transportation Production Manager, and Jan Lundgren, Project Department Head. Volvo s new hybrid car is powered by electricity and diesel and, ingeniously, the driver does not need to make the switch. It actually switches between electricity and diesel drive automatically as required. All you need to remember is to plug the car into the mains when you ve finished driving. The battery has a range of around 50 km and can be charged within five hours. In addition to the project department car, another one is used as a taxi in the transport department and will be available later in the carpool. More people will now be able to enjoy the silent ride, happy in the knowledge they are driving green. We ll be evaluating performance and the environmental benefits this winter. If the batteries perform acceptably, we ll substitute cars due for replacement with hybrids as far as possible, says Jan Lundgren. By: Ylva Sievertsson SVENSK SAMMANFATTNING Klimatsmarta hybrider Kirunas första plug-in hybridbilar har rullat ut från bilhallen och in på LKAB:s område tysta, moderna, effektiva och klimatsmarta. Prestanda och miljönytta kommer att utvärderas över vintern Håller batterierna acceptabel prestanda kommer LKAB att ersätta de bilar som ska bytas ut med hybrider så långt det är möjligt. 12 L K A B M A G A Z I N E 5 : L K A B M A G A Z I N E 5 :

8 Popular workplace for women LKAB In the Picture THE MINING INDUSTRY ATTRACTS MORE WOMEN Women are increasingly positive about working at LKAB. According to a new Swedish Institute of Public Opinion Research (SIFO) survey, more women than men in Kiruna are positive toward LKAB as an employer. I feel we ve succeeded in showing women that they too can enjoy a career at LKAB, says Grete Solvang Stoltz, Senior Vice President, Human Resources. By: Ronny Olovsson Photo: Lennart Jönsson, Fredric Alm It s no exaggeration to say that the mining industry has traditionally been regarded as male-dominated. And in many ways this picture lives on, even though much of the operation has changed and tasks now often require more brains than brawn. A new SIFO survey shows that this preconception is fading away as more and more women are positively inclined toward LKAB as an employer. In 2010 the proportion who were positive to LKAB as an employer in Norrbotten was 49 percent; this year 2013 the proportion has grown by no less than 19 percentage points to 68 percent. If we look at Kiruna alone, women have actually overtaken men. Today 98 percent of women are positive, while the proportion of positive men is 83 percent. A surprising result, given the history of the industry and the company. SO, GRETE SOLVANG STOLTZ, LKAB HR DIRECTOR, WHY HAVE WOMEN BECOME MORE POSITIVE TO LKAB AS AN EMPLOYER? I think it s because we demonstrate in word and deed that we want to attract more women to LKAB. This means more women see opportunities for a career with us. IN KIRUNA, THE PROPORTION OF WOMEN POSITIVELY INCLINED TOWARD LKAB AS AN EMPLOYER IS NOW GREATER THAN THAT OF MEN, WHAT S YOUR RESPONSE TO THAT? It is difficult to say why this is the case. Perhaps it s because we emphasize our equality initiatives that women see the possibilities and this has an extra positive effect. Proportion of local residents who feel that LKAB is a good or very good employer, according to SIFO % % % % % % HOW DO YOU WORK WITH DIVERSITY ISSUES AT LKAB? It s a matter of working over the long term and having concrete objectives. Our diversity efforts are part of LKAB s general strategy. We follow up progress carefully and report up through the chain all the way to the board of directors. WHY IS THIS IMPORTANT TO YOU? We know that diverse groups generally perform better than groups that lack diversity. Innovative thinking is improved when different experiences are included in decision making. The work environment is also affected positively. What s more, we have major recruitment needs coming up. We cannot rely on only 50 percent of % % % % % % Norrbotten women Kiruna women Gällivare women the populace as our recruiting base if we want to meet our skills-supply needs moving forward, concludes Grete Solvang Stoltz, Senior Vice President, Human Resources. Grete Solvang Stoltz, Senior Vice President, Human Resources. SVENSK SAMMANFATTNING LKAB blir allt mer en arbetsplats som lockar till sig kvinnor. Det visar en ny SIFO-undersökning som dessutom visar att det i dag är fler kvinnor än män som ställer sig positiva till specifikt LKAB i Kiruna som arbetsgivare hela 98 procent mot 83 procent bland männen. IN THE PICTURE Draining one year on WHAT: Leveäniemi open-pit mine, an ore deposit just over 40 km south east of Kiruna. In July 2012, LKAB was granted permission by the Norrrbotten County Administrative Board to drain it. On September 25, 2012 LKAB opened the valves. WHY: More than 30 million tonnes of water must be pumped away by no later than 2015 to enable mining to begin. Today, one year later, around 18 million tonnes of water has been drained from the pit. The depth, which was 94 metres at the outset, has fallen by 30 metres. Two main ramps in the old open-pit mine have become visible, as has a stretch of road just over 150 metres long. WHEN: By September 2014 the open-pit mine will be completely drained of water. So far, pumping is proceeding to plan. By: Johanna Fogman Photo: G. Rúnar Gudmundsson SVENSKA Tömningen firar ett år. I juli 2012 beviljades LKAB tillstånd att tömma dagbrottet vid Leveäniemi på vatten och den 25 september 2012 startade tömningen. Över 30 miljoner kubikmeter vatten ska pumpas bort för att möjliggöra gruvbrytning senast år Så här långt har drygt 18 miljoner kubikmeter vatten pumpats bort och vattendjupet har sjunkit med över 30 meter. 14 L K A B M A G A Z I N E 5 : L K A B M A G A Z I N E 5 :

9 The story of LKAB LKAB s position as the world s leading producer of iron ore pellets can be summarized with one word... WHAT IS AN INNOVATION? An innovation is usually defined as a new idea, a novel solution to a problem. But a good idea is not enough. To be called an innovation, it must be possible to implement the idea, it must be widely accepted and it must create value. In other words, it must be commercially viable and it it must improve the competitive strength of the company. Innovation has become an increasingly important competitive tool and success factor in the global market. The EU wants to strengthen Europe s innovative capacity through the Swedish initiative known as The Knowledge Triangle, which aims at greater collaboration and the exchange of knowledge between education, research and innovation. Sweden has a leading position in the global innovation race. In the 2011 Global Innovation Index Sweden was placed at the top, just behind Switzerland. The think tank MPI, in Toronto, also ranks Sweden as one of the most creative countries in the world. However, if you ask someone to name some of Sweden s most creative, innovative and successful companies, few would name LKAB, despite the fact that the company s new ways of thinking and spearhead technology have made Swedish iron ore products well known throughout the world. And LKAB s track record is truly impressive: LKAB is one of Sweden s top ten leading export companies ahead of well-known major companies such as Tetra Pak, Husqvarna and IKEA. LKAB has, over the last 60 years, consistently developed towards new and better products and production methods, and is today Europe s biggest and the world s next-biggest producer of iron ore pellets. Successful collaboration has contributed to LKAB s position as one of the world s leading producers of processed iron ore products and has contributed towards making technology from companies such as Atlas Copco, ABB, Metso and Sandvik international successes. LKAB s pelletizing plants are among the most energy and climatesmart in the world. LKAB plays an active role in The Knowledge Triangle and has donated 275 million kronor since 2004 to create better educational and research facilities. LKAB is one of Sweden s biggest industrial investors, investing billions of kronor each year in customized products and safer, more secure, smarter and more resource-efficient production and logistics. LKAB has retained its technological leadership for almost 30 years in a fast-moving and highly competitive global market. EVERYTHING BEGINS WITH AN IDEA Much of LKAB s success can be attributed to the way in which LKAB has adapted to the development and wishes of its customers, and the commitment, new ways of thinking and responsibility that have characterized the company. Commitment to renewal and continuous improvement has made LKAB an innovative, high-technology minerals group, and has positioned the company as one of the world s leading makers of processed iron ore products. And renewal will be needed in the future too, to meet demands from customers and society alike. 16 L K A B M A G A Z I N E 5 : L K A B M A G A Z I N E 5 :

10 The story of LKAB HISTORIC INNOVATION One can discuss which innovation has meant most for the development of mankind, but the use of fire, the invention of the wheel and the written language are usually named. And, naturally, the art of producing metals, not least iron and steel. Despite new materials being developed all the time, iron and steel have been the backbone of the economic and material development of mankind for more than 2,000 years. Steel is found everywhere, all around us, in various forms and qualities, on walls and roofs and as supporting structures in buildings and bridges, in vehicles, ships and aeroplane engines, tools, computers and mobile telephones. Steel is thus by far the most-used construction material in the world. It is also one of society s most recycled materials. Between 70-90% of steel is recycled in the form of scrap metal. LKAB s iron ore is therefore used again and again through steel recycling. These days, iron ore is primarily mined in huge open-pit mines. LKAB, on the other hand, gets most of its iron ore from deep underground, which is more difficult and more expensive. From a global perspective, LKAB is a small iron ore producer, with just under two percent of world production. Nevertheless, LKAB is the world s next-biggest supplier of pellets and, through innovative product and process development, has positioned itself as the leading technological pellet manufacturer in the world. THE BIGGEST UNDERGROUND IRON ORE MINE IN THE WORLD 1962 was a milestone for LKAB. The open-pit mine in Kiruna was closed and all mining went underground. Underground mining in Malmberget had been ongoing since the mid- 1920s. Later, LKAB would compete with the world s biggest open-pit mines despite its more expensive and more complicated technology. During the 60s and 70s the supply of iron ore worldwide increased and competition became considerably tougher. LKAB saw at an early stage that the way forward lay in using more efficient mining methods and better logistics. In short; mine more ore at a lower cost. For almost 50 years, LKAB s innovative underground mining methods have been important survival and competitive factors and the development work towards safer and more cost-effective production systems continues uninterrupted. DRIVERLESS TRAINS ALREADY IN 1971 One of the innovations that increased productivity in LKAB s mine at an early stage was the underground driverless trains that hauled ore from the production drifts to the rock cavities above the crushers on the unloading levels. Already in 1965 the first attempts were made at the 420-metre level and the valuable experience gained was used in the development of LKAB s unique bottom-dump rail cars. With this technology, the trains never stop and are unloaded while moving, so-called rolling discharge. In 1971 driverless trains were put into service on the newly developed main level at the 540-metre level. To complement this, remotecontrolled rock bins were developed between the ore shafts and the underground crushers. When the next main level was taken into operation in 1977, at the 775-metre level, the level of automation was further increased. All ore shafts were fitted with rock bins and, after the ore quality had been analysed, the results were fed into the control system, which in real time ensured that the ore was sent to the correct crusher depending on its quality. LKAB is currently working to complete the seventh main level in Kiruna, at 1,365 metres below the zero point. The main level will become operational in 2013 and be fully built by It will be equipped with the fifth generation of driverless train. DIGITAL INFORMATION IN REAL TIME With increasing automation and greater efficiency underground, the demand for information in real time also grew. LKAB was early in introducing a common system with a standardized interface for the most common control systems in the mines and processing plants. The advantages of a common information system are obvious, as it is possible to monitor and control process changes throughout the production chain. Today all of the operative control systems at LKAB are linked to each other; the harbours in Luleå and Narvik, all the ore-processing plants plus the mines and ore hoists in Malmberget and Kiruna. In all, some 40,000 parameters can be tracked as so-called tags via the system. LKAB s competitive strength is built to a large extent on its rational mining operations underground. Mining operations are planned with a system called GIRON, which LKAB developed together with Kiruna Soft Center. GIRON delivers plans to the operational organization and through links to the trains control systems. GIRON, in turn, is connected to the WOLIS system (Wireless On Line Loading Information System), which enables more efficient unloading and transport to the crushers. WOLIS is based on the automatic weighing of each bucket of ore lifted by the loaders. This information is then given a unique tag that is transferred via W-LAN to GIRON. The information can then be used by GIRON to calculate the level of the ore in the respective shafts, enabling the control system to send a train to the shafts when there is enough ore. WOLIS was also developed by LKAB in cooperation with Kiruna Soft Center AB, a local supplier. LARGE-SCALE MINING REVITALIZED LKAB At the start of the 1980s LKAB was facing a major upheaval. High operating and investment costs threatened the business, not least in Malmberget. Radical changes were called for if the company was to survive and meet competition from the world s huge open-pit mines. 18 L K A B M A G A Z I N E 5 : L K A B M A G A Z I N E 5 :

11 The story of LKAB LKAB used an efficient technology for underground mining called sub-level caving. The cost of mine development i.e., preparatory drifting into the orebodies, is very high. Previously, with small-scale iron ore mining, the distance between the drifts was short and produced relatively little ore per drift. By increasing the distance between the drifts in height and width, significantly more ore per drift could be mined and the work rationalized. Significant savings could be realized and the decision to go ahead with the new large-scale technology was taken in The decision had an immediate effect, since the development costs for ore mining were considerably reduced. The new method meant that the caving height was increased from metres to 28 metres. This resulted in 10,000 tonnes of crude ore per blast, compared to the earlier 1,200 tonnes per blast. Fewer drifts meant, however, that the length of the blast holes increased, as did the need for precision production drilling. With the new large-scale sublevel caving method, production increased. Fewer loading stations and fewer machines were able to produce more ore and both the operating costs and investment costs fell dramatically. LKAB s competitive strength increased correspondingly. Large-scale sub-level caving was successively introduced in both Malmberget and Kiruna, and was completed in the 1990s. The development of large-scale mining has reduced LKAB s mining costs by about 3 billion kronor a year. UNIQUE DRILLING SYSTEM FOR STRAIGHT HOLES Large-scale sub-level caving was a success from a technical production point of view. However, the greater caving height required new machines and new equipment for it to work well. Previously, a blast hole of up to 15 metres was long enough. Now it was necessary for the bore crown to be able to strike an area the size of a writing desk 55 metres away when drilling the blast hole. The compressed-air alternative developed in the mid-1980s admittedly had acceptable precision but required an expensive, vulnerable air-compression system in the mines. The system required a lot of energy and had a low efficiency level with almost all the energy applied being converted into heat. LKAB s interest turned, instead, to a system with local connections. An engineer who had developed a water-powered hydraulic drill hammer for Atlas Copco came into contact with LKAB via Luleå University of Technology and a development company, G-drill, was formed. The first tests with the new rock drilling system were conducted in The water-powered drill hammer quickly became a success in LKAB s mines. The drill hammer was more efficient and was able to drill longer, straighter holes and improve the work environment with greatly reduced drilling costs per metre. All the drilling rigs in Malmberget were successively converted from pneumatic to hydraulic drill hammers. The underground air-compression systems were gradually phased out with large cost savings as a result. In 1991, LKAB decided to acquire the whole company of G- Drill, which was then renamed Wassara. This was partly after the river Wassara and partly because vasara means hammer in Finnish. The new drilling method became so successful that the system is now part of LKAB s core technology. When the time came for the new generation of production drilling rigs, it was clear that LKAB would use Wassara. Wassara has been a wholly-owned subsidiary of LKAB since 2002, selling the new technology to companies around the world, not only to the mining industry but also to companies working with ground reinforcement and dam construction. SMART EXPLOSIVES When the new large-scale sub-level caving method started to be introduced into LKAB s mines, it caused a chain reaction of new thinking. No sooner had the challenge of drilling up to four times longer, perfectly straight holes been solved than the next challenge raised its head: how could explosives be charged into vertical holes and kept in place? The short, narrow holes for small-scale sublevel caving had not been a problem. Prills, or small sphere-shaped explosives, made of aluminium nitrate mixed with oil, were pneumatically blown up through hoses and packed into the blast holes, which were 57 mm in diameter. If any water that could destroy the explosive was present in the blast hole, the explosive was first packed into a plastic tube several metres long. The explosive was manufactured by a subsidiary, Kimit. It proved to be impossible to push the tubes into 55-metre-long blast holes by hand. The new method also meant that the blast hole s diameter increased from 57 mm to 115 mm. This made it difficult to pack the explosive pneumatically and keep it in place. LKAB solved the problem by designing a charging robot that could be mounted on a truck chassis. The device was jokingly referred to as charger 14, since it was only supposed to have taken 14 days to complete the design. 20 L K A B M A G A Z I N E 5 : L K A B M A G A Z I N E 5 :

12 The story of LKAB Despite mechanical tube feeding, initially it proved impossible to reach the far end of the blast hole. The tubes were too narrow and soft and therefore coiled up and compressed like springs in the drill hole. Stiffer tubes made it easier, but the problem of getting the prills to stay in place remained. Kimit then developed an emulsion explosive that was pumped into the drill hole instead of being blown into position pneumatically. REMOTE-CONTROLLED PRODUCTION DRILLING At the end of the 80s and the start of the 90s, LKAB and Atlas Copco developed a new system for production drilling with automatic drilling rod-lengthening that was operated from a control room. The drill aggregate was based on Wassara s unique water-powered drilling method, which was able to drill extremely long, straight holes. The drilling system was put into operation for the first time in 1997, after the system developed by LKAB for wireless communication with compressed video was updated to meet the performance requirements at that time. The drilling aggregate was set up manually, and then a fan of 8 blast holes with a diameter of 115 mm in lengths of up to 50 metres was drilled during one shift. When the drilling of the fan was finished the next fan was drilled 3 metres away. Up to six drill rigs could be monitored and operated from the control room at the same time. Wassara s efficient drilling technology, in combination with around-the-clock automated drilling, gave a 40 percent increase in productivity compared to the manually operated airdriven drill rigs. Automated rigs are still used for most production drilling in LKAB s mines. A new generation of rigs is currently under development. AUTOMATED LOADING OF BLASTED ROCK In the second half of the 80s the question was raised about whether it was possible to operate the remote-control loading machines that were used to remove the ore from the drifts to the shafts. The available technology at the time was called AGV (Automatic Guided Vehicles) and consisted of magnetic fields produced by submerged loops in the cave floor. Communication was by radio and the speed was quite limited, less than 2.5 kilometres per hour. LKAB s speed requirement was almost 10 times higher at 20 kilometres per hour, which was also the maximum speed of the manually operated loading machines. Loading tests carried out with Finnish loading machine supplier, ARA, identified the technologies which needed to be further developed. These were a flexible navigation system and wireless transfer of speech, data and compressed video. LKAB quickly became interested in a navigation system developed at Luleå University of Technology. The system consisted of a rotating laser scanner which navigated along a predetermined route with the help of reflective tape set up in the tunnel. The system was tested in Kiruna and it was seen to meet the requirements for both speed and navigation accuracy. To communicate with the remote-controlled loading machines, LKAB developed a system for wireless high-speed communication together with the Finnish Elektrobit. WIRELESS UNDERGROUND Modern, advanced high technology, such as automation and driverless trains, remote-control rock bins, plus remote-control loading and drilling, demanded a high-performance wireless communication system in order to work properly. The specification of requirements included a high band width and transparent communication for transferring data, speech and compressed video. When LKAB decided to introduce such a system in 1994 there was no fully developed system on the market. Once again, LKAB was the driving force behind the new approach. Following some detective work on various discussion forums on the young internet, the project group made contact with Elektrobit in Oulu, a company that developed wireless highspeed systems for the space and defence industries. The team came up with an underground system called WUCS, which was operated between 1997 and Today WUCS has been almost completely replaced by wireless Wi-Fi solutions and standardized W-LAN technology which forms one of Sweden s biggest single wireless networks. EFFICIENT GREEN TRANSPORT Two years before LKAB was founded, in the spring of 1888, the first ore train from the iron ore mines in the Malmfält region arrived at the harbour in Luleå. The construction of the Ore Railway (Malmbanan) was not an innovation in itself but rather the result of great visions and a lot of courage; courage that resulted in a 500-kilometre long rail track right through the wilderness and laid the foundation for Sweden s most sustainable and most successful export stories of all time. Today, more than 120 years later, Malmbanan is still the backbone of LKAB s logistics system. An average of 70,000 tonnes of iron ore products are delivered to the harbours in Narvik and Luleå every day. Malmbanan s enormous capacity is one of the decisive factors in LKAB s business model. Just-in-time deliveries result in high resource utilization throughout LKAB s processes and make intermediate storage unnecessary both for LKAB and customers. The efficiency of ore haulage has increased dramatically in recent decades through innovative solutions. New, stronger locomotives and bigger ore cars have increased the capacity of trains by 60 percent. LKAB s unique bottomdumping ore cars are emptied in 5-7 seconds, compared to the 30 seconds per car required by the competitors to mechanically empty their side-tipping cars. By loading and unloading cars on the move, another LKAB innovation, terminal times have been reduced and delivery capacity has been increased. From an environmental point of view, too, LKAB s transport system is at the very forefront. The railway is essentially a very energy-efficient, environmentally friendly way of transporting very large and heavy volumes, but LKAB has gone one step further. Through its train control system, CATO, and regenerative braking, the energy requirement for transporting the ore has been reduced by more than 25 percent. SWEDISH PATENT MAKES ORE SPHERES During the post-war years of the 50s, people began again to believe in the future. It was during this period of optimism that LKAB took the decision to start producing spheres, or pellets, based on the so-called prilling method. The origins of the prilling method can be found in a Swedish patent filed by A G Andersson in 1912, although the pellet-making process was developed further in the USA. LKAB monitored developments closely and, in 1952, took the historic decision to start building a full-scale pelletizing plant in Malmberget with a capacity of 100,000 tonnes of pellets a year. The aim was to increase the production and efficiency of the rich, fine-grained Malmberget ore which was difficult to transport in the winter. The first pelletizing plant in Europe was duly opened in Dare to be an expert (Dan Schechtman) 22 L K A B M A G A Z I N E 5 : L K A B M A G A Z I N E 5 :

13 The story of LKAB OLIVINE PELLETS PUT LKAB BACK ON ITS FEET One of LKAB s greatest sales successes, olivine pellets, was born in a time of unrest. The oil and steel crises of the 70s were still being felt in the early 80s. Old products such as lump ore and high phosphorous ores were on their way out. The acid sinter spheres used by LKAB at that time were not optimal for blast furnace operations either. However, things were not as black as they looked. Intensive research was started up both within LKAB and externally. The goal was to find a recipe for pellets that would improve quality and efficiency in steelmaking. First and foremost, problems associated with alkalis attacking the acidic pellets in the blast furnace process had to be solved. Laboratory tests were conducted using the mineral dolomite, which contained both calcium and magnesium. Research had also been carried out by LKAB into pure limestone earlier in the 70s. The breakthrough came when LKAB was able to identify the sequence of events involved in the formation of slag in pellets both during the combustion and reduction phases. By only adding magnesium oxide as the basic component in the pellets, the melting point was shifted downwards in the blast furnace, enabling a more efficient process. The attempt to control the slag s melting point with magnesium minerals showed very good results, contrary to the established notions and practices. But interest from the steelworks was weak. There were few advocates for innovative products from LKAB. Most purchasers wanted to have interchangeable qualities in order to negotiate prices more simply. In France there was one customer who liked the idea of pellets made with magnesium oxide. LKAB started to look for magnesium minerals that were adapted to the advantages of LKAB s magnetite ore. The mineral olivine was the solution. Early in 1982 trials began using olivine pellets in Blast Furnace No. 2 at SSAB in Luleå. The innovation was an immediate success. Fuel consumption in the blast furnace fell by more than seven percent and the rest is history. Olivine pellets have become LKAB s greatest sales success in modern times and more steelworks have followed SSAB s example and switched to 100 percent pellets in their production. SSAB s BF 3 is still one of Europe s most energy-efficient blast furnaces. The development of olivine pellets played a decisive role for LKAB, and was also extremely important for the steel producer SSAB. The quantity of coke saved in the Luleå blast furnace was 30 kg per tonne of crude iron. UNIQUE EXPERIMENTAL BLAST FURNACE The success with the olivine pellets showed that LKAB s interest in how raw materials behaved in customers processes was the right way to go. Optimizing the pellet raw material and understanding and developing customers processes would put LKAB back in the lead in tough global competition. What was needed was a step between laboratory-scale trials and a full-scale blast furnace that would allow LKAB to test and verify new products in an environment that was comparable to full-scale industrial production. Furthermore, it would be an important tool in the application development work to be done together with customers. In 1997 LKAB s experimental blast furnace was built as a step towards taking pellet manufacturing and blast furnace processes to a new level. The experimental blast furnace was at that time, and still is today, the only one of its kind in the world and was a milestone for blast furnace research and development. Together with steelwork customers, LKAB has carried out a number of successful projects in the experimental blast furnace which have improved the competitive strength of customers. LKAB will further establish itself as the world s 24 L K A B M A G A Z I N E 5 : L K A B M A G A Z I N E 5 :

14 The story of LKAB If you do what you ve always done, you ll get what you always get (Henry Ford) technology-leading pellet manufacturer with the planned new experimental plant for direct reduction and the experimental pelletizing plant as a complement to the experimental blast furnace. THREAT BECAME OPPORTUNITY The magnetite ore that LKAB mines contains a number of substances that are undesirable for the production of crude steel and they must therefore be removed. One of these substances is phosphorus, bound in the mineral apatite. The ores are therefore often referred to as apatite iron ores. At an early stage, the opportunities for exploiting this phosphorus-rich apatite as fertilizer were seen. Until the 70s the steelworks that used high-phosphorus ore in their steel production had their own plants to extract the apatite. As early as the end of the nineteenth century, a processing plant was built for the production of fertilizer near to the ore harbour in Luleå. However, the project was a fiasco and production ceased after eight years. Today the situation is quite different. The world s population is growing quickly, which means more mouths to feed. More people also means less space for cultivation, which puts greater demand on the land that is already cultivated to give the maximum yield. Fertilizer is one of the solutions. There is therefore a threat that phosphorus could become a scarce commodity, which is reflected in rising raw material prices. This opens up interesting business opportunities for LKAB. Today, it has been estimated that there is enough apatite in the enriched sand from LKAB s iron ore production to extract phosphorus for between 15 and 20 years. This would give a significant boost to Europe s production of fertilizer. EARTH METALS MAKE MOBILES VIBRATE In addition to phosphorus, enriched sand from LKAB s iron ore also contains small quantities of rare earth elements, or REEs. Rare earth elements is the collective name for seventeen inaccessible elements that are in demand; the fifteen lanthanides plus scandium and yttrium. In the future it will be possible to recycle the enriched sand in the pursuit of these desirable metals. At the current level of global demand, these rare earth elements can generate significant revenues for LKAB. Extracting metals is, however, an advanced chemical process and LKAB is currently investigating viable methods. Rare earth elements are used in, among other things, electronics, engines, glass, cars, and as an alloy substance in the steel industry. They are used in the manufacture of magnets that tolerate high temperatures, hard disks, electric motors and wind turbines. Another important application area is in the green technology of the future, where REEs will be used in hybrid and electric cars. In other words, the global development of technology is driving demand for rare earth elements. For instance, the vibration unit in an Iphone contains 0.25 grams of dysprosium. So, in the future, when your telephone starts to ring, it may be quite possible that a small, small piece of earth from Lapland will be vibrating in your pocket. SQUEEZING BLOOD FROM A STONE The expression to squeeze blood from a stone is used to indicate that something is impossible. At LKAB, however, the basic assumption is that everything is possible. The impossible just takes a little longer. In Turkey, LKAB s wholly-owned subsidiary, LKAB Minerals, mines a clay mineral called hydromagnesite. The mineral is completely chalkwhite and historically, in the Mediterranean countries, it has been used to paint houses white. However, hydromagnesite is not mined because of its importance as paint. It is mined for another, particularly special characteristic. Hydromagnesite contains water. However, the water is firmly bound in the magnesite, in the actual crystal structures, and is not released when used in paint. On the other hand, if the hydromagnesite is heated to over 220 degrees, the crystal structure is broken up and the water is released. The remaining magnesite is converted into carbon dioxide and magnesium oxide. So, with a little creative thinking, it is actually possible to squeeze blood from a stone. And if you think one step further, you can quickly think of an application area. Hydromagnesite is used as a flame retardant in plastics, for instance, in electronics and in cables. ALPINE FLYCATCHER FOUND THE TREASURE In the autumn of 1972, LKAB s chief geologist was walking in the low-fell area northwest of Kiruna. Along his route he noticed the presence of the beautiful cerise alpine catchfly, growing in abundance on the mountain Peuravaara. The discovery sparked the opening of a new copper mine. What immediately started the prospecting process was the knowledge that the alpine catchfly, unlike other plants, prefers to grow in ground with high levels of metals such as copper, zinc and nickel. In other words, it was his knowledge of botany that told the geologist that here was a mineral deposit worth investigating. In 1982 the Viscaria copper mine, which took its name from the alpine catchfly s Latin name, Viscaria Alpina, was opened. The mine was sold in 1985 to Finnish Outokumpu, who operated it until The mine was seen as the greatestever success for geobotany in Sweden. The discovery of the copper deposits in Peuravaara shows how different scientific disciplines and knowledge can give rise to new ideas if they are brought together. LKAB s R&D organization is working to increase the crossfertilization of competence in the organization through multidisciplinary research and development teams. The aim is to develop a creative and stimulating environment which can further strengthen LKAB s technological lead and competitive strength. LKAB DEVELOPING TOMORROW S MINE LKAB operates one of the world s most modern and technologically advanced underground mines. To be able to meet the ever greater demands for production increases, efficiency 26 L K A B M A G A Z I N E 5 : L K A B M A G A Z I N E 5 :

15 The story of LKAB and safety, LKAB cooperates with other mining companies and global suppliers to develop new and better systems for tomorrow s mines. In the mines of the future, the need for innovative solutions will be great. The aim is that people should not be in the production areas for safety reasons, and that all production will be remotely controlled or automated. The goal is operations with zero accidents at a time when mining will be going deeper and becoming more complicated. By 2030, LKAB has decided, productivity will increase by 30 percent, while ore losses will be similarly reduced. LKAB will also reduce its energy consumption and emissions of greenhouse gases by at least 30 percent. Methods for separating rock waste and concentrated ore, in the mine, will reduce energy use and result in environmental benefits above ground. For sustainability reasons, the waste from enrichment will be recycled into new products and the iron ore will be processed at the mine as far as this is possible. Greater efficiency along the whole length of the underground logistics chain is something to strive for. Continuous and remote-control mining methods which produce steady flows are a key factor for successful mining in the future. Advanced systems for monitoring the crude ore characteristics and the structure of the rock will be used to make mining processes more efficient. The vision is that all the machines will be electric and that maintenance work will be carried out robotically. From one central control room, it will be possible to oversee and control the whole product and process chain in detail with the aid of sensor and camera technology. FUTURE CHALLENGES Demand for steel today is greater than it has ever been. Independent studies show that by the year 2030, there will be three billion more middle-class consumers who will want cars, refrigerators and mobile telephones. The developing countries, primarily China and India, will account for the biggest increases in consumption,. Clearly, there will be a strong increase in the demand for steel in the next few decades. LKAB s goal is to grow with its customers, to be a significant raw material supplier and an important partner in the development of more efficient current and future steel production. This means an increased need for iron ore raw material and the opening of new mines, as well as increased flexibility when it comes to iron ore products, and business models which cater for the needs of the customers. Growing with the market involves major challenges for LKAB from a production and delivery point of view, as well as in terms of sustainability. Together with the authorities and local communities, LKAB will work to speed up the permitting process and to ensure continued development of mining activities without compromising its high environmental ambitions. LKAB will continue to invest in new products, more efficient processes and logistics, as well as continuing to play a leading role in steelmaking with less environmental impact. With the world s most climate-smart iron ore product LKAB Green Pellets LKAB has taken a unique position in the global iron ore market. One of the basic questions is how steel will be manufactured in the future. LKAB employs 25 metallurgists who work with customers, on a daily basis, developing processes to ensure that LKAB can deliver Performance in Ironmaking with the best added value on the market. A new experimental plant for direct reduction is planned as a complement to the existing experimental blast furnace. This will give LKAB a unique, basic understanding of the leading technologies for the production of crude iron in the years to come. LKAB s technological leadership means open, multidisciplinary research under its own management, as well as increased collaboration with external knowledge centres. Engaged, innovative employees with a sense of responsibility are a prerequisite for LKAB s position as the world s quality-leading pellet manufacturer. INNOVATIVE THINKING IS THE WAY TO SUCCESS The ability to break thinking patterns is what characterizes creative people. In Sweden, we are proud of our long tradition of new thinking and innovations that have become global successes. But what then drives innovation? What is the secret behind daring to think in new and different ways? What is the key to success? Dr. Magnus Storch, chairman of the Nobel Foundation, has put forward a number of important explanations for Alfred Nobel s creativity. He grew up in an academically minded home with the spirit of entrepreneurship. He received an excellent education that matched his talent. He lived in a cosmopolitan environment with many intellectual influences. He made contact with the world of SVENSK SAMMANFATTNING Innovationer behövs också i framtidens järnmalmsproduktion LKAB:s position som världens tekniskt ledande producent av järnmalmspellets kan sammanfattas med ett ord innovation. Definitionen av ordet brukar vara en ny idé, en lösning på ett problem som inte gjorts förut. Men det räcker inte med en idé. För att räknas som en innovation måste idén gå att genomföra, bli allmänt accepterad och skapa ett värde. Den måste, med andra ord, gå att kommersialisera och den måste stärka företagets konkurrenskraft. Sverige har en framskjuten position i den globala innovationskapplöpningen. I Global Innovation Index 2011 placerade sig Sverige i topp strax bakom Schweiz, men om du ber någon nämna några av Sveriges mest kreativa, innovativa och framgångsrika branscher lär få nämna LKAB och järnmalm. Även om bolagets nytänkande och spetsteknologi gett svenska järnmalmsprodukter världsrykte. En stor del av LKAB:s framgångar ligger i följsamhet gentemot kundernas utveckling och önskemål samt det engagemang, nytänkande och ansvar som präglar bolagets utveckling. Den starka viljan till förnyelse och ständiga förbättringar har utvecklat LKAB till en innovativ, högteknologisk mineralkoncern och positionerat bolaget som en av världens ledande tillverkare av förädlade järnmalmsprodukter. Men förnyelse behövs även i framtiden för att möta kraven från kunder och samhälle. Det kan diskuteras vilken innovation som betytt mest för människans utveckling men bruket av eld, uppfinnandet av hjulet och skriftspråket brukar nämnas precis som konsten att framställa metaller, då främst järn och stål. I visionen för framtiden behövs nya innovationer. Målet är en verksamhet med noll olycksfall, väsentligt ökad produktivitet, väsentligt minskad energiförbrukning och väsentligt minskade utsläpp av växthusgaser. Till detta research at an early age, and displayed patience over time with his own research. Today the world looks quite different compared to the time of Alfred Nobel. However, the importance of the environment, mentorship, challenges and top-level international education are still important ingredients in the process of innovation. For these reasons, LKAB is investing systematically in the knowledge triangle, where education, research and innovation are brought together to produce new ideas. In the last seven years, LKAB has donated 200 million kronor with which to build strong research environments connected to Luleå University of Technology. LKAB has also invested 75 million kronor in the LKAB Academy to support creative development in schools. LKAB has a long history of fruitful cooperation with leading companies and research institutes around the world. In its strategic collaboration with its customers, universities and suppliers, LKAB will continue to build strong, innovative knowledge clusters which accelerate its own research and create a good base from which to recruit competent employees. Great challenges lie ahead for LKAB, but they also bring great opportunities. New ideas and innovation do not come by order but by creating the prerequisites; the way to the next major innovation is mapped out. Exactly where the way leads is, however, impossible to say. The answer lies in the thoughts that have not yet been thought, in the ideas that have not yet been born, and in each individual s commitment and sense of responsibility. Innovation is created by people and is driven by people. PERHAPS THE NEXT MAJOR INNOVATION WILL BE YOURS? kommer återvinning av avfall, effektivisering, avancerad övervakning, eldrivna maskiner i all produktion, robotteknik vid underhåll samt att hela produkt- och processkedjan detaljstyrs från ett enda, centralt kontrollrum via sensorer och kamerateknik. Framtidens utmaningar är många. Klart är dock att det kommer att finnas en starkt ökad efterfrågan på stål de närmaste decennierna. LKAB ska fortsätta investera i nya produkter, effektiva processer och logistik och även i framtiden leda utvecklingen mot en stålframställning med mindre miljöpåverkan. Med världens mest klimatsmarta järnmalmsprodukt, LKAB Green Pellets, har LKAB tagit en unik position på den globala marknaden. Förmågan att bryta tankemönster är den kreativa människans kännetecken. Nya idéer och innovation kommer inte på beställning men genom att skapa rätt förutsättningar är vägen till nästa stora innovation utstakad. Exakt vart vägen leder är dock omöjligt att säga. Svaret ligger i de tankar som kanske ännu inte tänkts, i de idéer som ännu inte fötts. Innovation skapas av människor och drivs av människor. Kanske nästa stora innovation är din? 28 L K A B M A G A Z I N E 5 : L K A B M A G A Z I N E 5 :

16 Five Quick questions By: Ulrika Westerberg Photo: Fredric Alm WE AIM TO BE ONE OF THE WORLD S LEADING MINING COMPANIES 1 WHAT DOES YOUR NEW ROLE AS SENIOR VICE PRESIDENT, SUSTAINABILITY AFFAIRS ENTAIL? I have been tasked by our board and the CEO to develop and run LKAB s sustainable development efforts. A holistic view of sustainability is a central issue for us here at LKAB. It s a matter of bringing together every perspective and increasing our contribution to societal development, humanity and the environment in order to strengthen LKAB s long-term profitability. My role is spider in the web, keeping in touch with LKAB s sustainability programme, highlighting business benefits and acting as a supporting, driving force within the Group. 2 WHAT IS THE MOST IMPORTANT ISSUE FACING LKAB RIGHT NOW? There is no single issue. Instead, we must concentrate on managing every part of our operation responsibly. Our ambition is clear; we must be one of the world s leading mining companies when it comes to innovation and resource efficiency. This places demands on everyone in our organization and we collaborate with customers and suppliers to achieve it. 3 SUSTAINABILITY IS ALSO ABOUT ECONOMY, BUT MOST PEOPLE ONLY THINK OF THE ENVIRONMENT; HOW DOES LKAB STRIKE A BALANCE HERE? For LKAB, sustainable development entails the pursuit of responsible operations, running and developing resource-efficient production, working to create attractive communities and, last but not least, untiring efforts to be an attractive employer. 4 CAN SUSTAINABILITY BE PROFITABLE? It s not possible to run a business in the long term without responsible operations and involvement in community development, nor is it possible to run a company that is not profitable. It s not either or, it s both. Our sustainability efforts characterize our operations and go hand-in-hand with our financial results. 5 WHAT IS THE BIGGEST CHALLENGE IN YOUR WORK? LKAB has always done business responsibly, but at the same time there is no part of our operation that cannot be better. So there are challenges at every level, and an important issue is our success in integrating work towards sustainable development in every part of LKAB, and with every individual. We will naturally continue to refine our efforts to reduce the environmental impact on our surroundings, and continue our journey as the leading mining company in terms of resource and climateefficient production, energy efficiency and product and technology development. SVENSK SAMMANFATTNING Anders Furbeck är ny hållbarhetsdirektör på LKAB. Han har arbetat inom LKAB sedan 1985 varav de senaste 14 åren i koncernledningen. Det går inte att bedriva en verksamhet långsiktig utan en ansvarsfull verksamhet och ett engagemang i samhällsutvecklingen samtidigt som det inte går att driva ett företag utan lönsamhet. Det är inte antingen eller utan både och, menar han. FACTS Newsflash: New Senior Vice President, Sustainability Affairs. Name: Anders Furbeck. Age: 55. Background: Has worked at LKAB since 1985, and for the last 14 years in Group executive management with a range of different areas of responsibility. Lives in: Luleå. Family: Daughters Anna and Josefine. Leisure pursuits: Music, books, sports, working out, travel, sitting by a mountain lake, the company of good friends. Passionate about skiing, golf and Luleå ice hockey team. Latest book: The Sandman by Lars Kepler. Together TOWARDS new records LKAB mines and processes Norrbotten s unique iron ore for the global steel market. The Group has annual sales of around SEK 30 billion and also covers industrial minerals, drilling systems, rail haulage, rock and engineering services, explosives and property management. LKAB has just over 4,200 employees in 14 countries. Together, we make the world s most climate-smart iron ore product, LKAB Green Pellets. 30 L K A B M A G A Z I N E 5 :

17 Labour market Jobs mean security WORK AND WAGES MEAN SECURITY AND FAITH IN THE FUTURE Young people in the Malmfälten region don t just earn most nationwide. The majority of them are also employed. Having a job means a great deal. It means personal responsibility and not having to live at home, says Simon Rautio, 23. Elin Rova, nurse s assistant, and Simon Rautio, electrician, have been able to move into their own homes thanks to their jobs and income. Simon Rautio, 23 and Elin Rova, 21 have got off to a brilliant start in their adult lives. They have not been unemployed a single day since they finished school. I had a few friends who worked in healthcare, so I called the unit manager and asked if there was any work after I graduated from high school, Elin tells us. She is a nurse s assistant for home-help services in Kiruna. WHEN SENIOR HIGH SCHOOL is finished and the adult world is waiting, having a job to go to means a lot. It opens up possibilities and creates security. I ve been permanently employed since March 2013 and I ve been able to buy an apartment, says Elin. Simon agrees and says that work opens doors to so many things beyond the material. 32 L K A B M A G A Z I N E 5 : I don t think any of my friends are unemployed I ve moved to an apartment and without a job I would not have been able to. And if you also have pastimes that cost money, a job is a necessity, he tells us, referring to his hobby, snowmobiling. DESPITE THE FACT THAT MANY of her friends work in industry where wages tend to be higher, Elin feels at home in her workplace. I think more young people should look for work in healthcare. It s really rewarding socially, and there s also an opportunity to determine your own work schedule. When asked why more young people don t move to the Malmfälten region, Elin and Simon point to the housing situation as the main reason. In fact, manpower is in short supply in the Malmfälten region and young people are needed to cope with expansion and attrition over the next few years. I don t think any of my friends are unemployed, says Elin after a moment s reflection. And Simon, who has previous work experience, also says the job situation is brilliant. Almost all of my buddies have jobs. SVENSK SAMMANFATTNING By: Josefine Ejemalm Photo: G. Rúnar Gudmundsson Arbete skapar trygghet Simon Rautio, 23, och Elin Rova, 21 år, har fått en lysande start på vägen in i vuxenlivet. De har inte varit arbetslösa en enda dag sedan de gick ut skolan. Och att ha ett jobb betyder mycket. Det är tryggt. Jag har kunnat köpa mig en lägenhet, säger Elin Rova. YOUNG PEOPLE IN THE MALMFÄLTEN REGION EARN MOST IN SWEDEN In the Malmfälten region unemployment is almost non-existent. What s more, young people in the region earn most nationwide. We aim to take on around 150 to 200 people every year up until We anticipate the greatest need in the Svappavaara orefields, says Mikael Pudas, Head of LKAB s Personnel Department. Residents of Kiruna and Gällivare have thicker wallets than your average Swede. The average income in Kiruna is SEK 290,400, while the average Swede earns SEK 262,500. Average income is based primarily on how many people are working, but there are other factors that raise the average, such as pay structure, says Fredrik Carlgren, manager, Ekonomifakta. The number of people gainfully employed in Kiruna, which includes income from employment and business activities as well as other taxable compensation from the Social Insurance Agency, is no less than 85 percent. This means Kiruna holds a respectable sixth place in the Swedish employment league. Pay tends to be a little higher in the private sector, but in the case of Kiruna and Gällivare I would count LKAB as belonging to the private sector, says Carlgren. In principle, we have no unemployment. On the other hand there is a lack of manpower; we need people, says Anders Lundgren, municipal strategist for Kiruna. The real problem in the Malmfälten communities is actually a lack of manpower and housing. AVERAGE INCOME FACTS: Sweden: SEK 262,500 *Survey from 2011 Source: SCB. Kiruna: SEK 290,400. Gällivare: SEK 277,600 Danderyd: SEK 486,700 Over the next five years we need to take on 250 to 300 people to meet operational requirements and retirement attrition, continues Lundgren. In addition to the recruitment needs of LKAB and the municipalities, there is also a demand for labour in other sectors. Actually, the problem is a result of our success, says Lundgren jokingly. The Malmfälten region is a gold mine for the young, according to statistics. The average income in the 20 to 24 and 25 to 29 age groups amounts to SEK 234,300 in the first group and SEK 285,300 in the second. The Swedish average for the same target groups is SEK 124,300 and SEK 203,900, respectively. Pay levels in the mining industry are relatively high, which is naturally reflected in the income statistics, says Fredrik Carlgren. Young people in the Malmfälten region are not just leading the pay race, they ve left the field far behind Sweden SEK 203, Kiruna: SEK 282,600 SVENSKA Ung domarna i Malmfälten tjänar bäst i landet och arbetslösheten är här i dag i stort sett obefintlig. Medelinkomsten i Gällivare och Kiruna ligger på kronor vilket är nära kronor mer än medelsvensken. Trots detta råder brist på arbetskraft. Minst 1000 personer kommer att behöva rekryteras inom LKAB fram till Gällivare: SEK 285,300 (SEK thousands) Danderyd: SEK 200,400 L K A B M A G A Z I N E 5 :

18 Labour market Apprentices get set Environment No tougher conditions APPRENTICESHIP SHORT CUT TO WORKING LIFE They are young, promising and at the beginning of their professional careers. As apprentices at attractive workplaces they enjoy a helping hand out into working life thanks to a government initiative. James Walkington, 19, is one such apprentice. Environmental permitting procedures concerning LKAB s new mining projects have been delayed by appeals and resubmissions. But has the process actually led to any hard and fast examples of tougher operational requirements? The answer is not so far, says David Berggård, mining expert at the Norrbotten County Administrative Board s environmental protection unit. DESPITE APPEALS NO TOUGHER CONDITIONS LKAB Minerals in England is recruiting apprentices as part of a government initiative to employ more young people. The apprentices are learning the ropes as laboratory technicians, electrical technicians, welders/fitters and in sales. HETA (Humberside Engineering Training Association) is behind the apprenticeship system. The apprentices get training under the instruction of qualified mentors at the workplace and also undergo external training one day a week at local colleges to gain their vocational qualifications. We see several advantages with the apprenticeship system. Young people are offered a way into working life and it makes the succession planning process easier for us, says Kathy Walker, Personnel Manager at LKAB Minerals in England. James Walkington, 19, is an apprentice electrical technician at LKAB Minerals. The apprenticeship program lasts three years. James has just finished his first. HOW DID YOU BECOME ONE OF THE APPRENTICES AT LKAB MINERALS? HETA contacted LKAB with an inquiry about possible vacancies for apprentices. I was chosen from among 15 applicants, says James, who has experienced many unique opportunities since he joined the company. For example, I designed and created a control circuit for the new particulate cleaning system. At the moment I m investigating how we can reduce carbon dioxide emissions at the facility here in Flixborough by using a lighting system that uses less energy while providing the same light intensity, he tells us. HIS STUDIES WILL LEAD TO A Higher National Certificate in Electrical Engineering. Eventually his role as an apprentice will result in a more independent position in the electrical department at LKAB Minerals. Apprentice James Walkington gets a helping hand into working life. I designed and created a control circuit for the new particulate cleaning system By: Johanna Fogman Photo: Henden Weddings SVENSK SAMMANFATTNING Unga lär för framtiden Som ett led i regeringens initiativ att sysselsätta fler unga har LKAB Minerals i England rekryterat lärlingar. Lärlingarna är verksamma inom områdena laboratorietekniker, eltekniker, svetsare/montör och försäljning. Under handledning av kvalificerade mentorer får lärlingarna utbildning på arbetsplatsen men också extern utbildning en dag i veckan på lokala högskolor för att klara av sin yrkeskvalifikation. We called mining expert David Berggård at the County Administrative Board to get a clearer picture on current and past environmental permitting. How well do Swedish environmental conditions compare internationally; do other countries have tougher standards? It varies, but many of the conditions and regulations here do pretty well in international comparisons. For example, compared to Finland we have more extensive requirements for environmental measures. If we look at atmospheric emissions from our operations we are far advanced and LKAB has world-class flue gas cleaning. But there is another side to the coin; there is still more to do on the impact mines have on housing and the residential environment. There are parts of our operation that are exemplary, while other parts are still not good. Regarding the appeals and the back-and-forth over LKAB s mining project in Svappavaara, Gruvberget, Leveäniemi and Mertainen, has the process led to any tougher environmental conditions when it comes to hard and fast limits? The answer is no. But we haven t seen the result from the appeals yet. If the permit conditions are no tougher, what is the point of appeals? It s true there can be procedural issues that might entail appeals issues of pure principle that can be time-consuming. But it s not unusual for companies to present solutions to problems that are perhaps not fully tested, and which are not entirely convincing. It s extremely important that solutions are credible if the process is to run smoothly. When there are uncertainties, it s not unusual for them to lead to appeals. We ve been experiencing a mining boom for several years and criticism has been raised aboutthe lengthy permitting procedure. Do we need to provide the reviewing authorities with more resources to cope with the flow of cases? Yes there is a need for that and it s in the pipeline. The Land And Environment Courts have received increased resources, and so have we here at the County Administrative Board. I think this has been duly noted. Also, permitting procedures are much more complex today; the technology that has to be analysed in different cleaning systems is more advanced. The general public also places greater demands on the outdoor environment today. David Berggård. SVENSKA Miljötillståndsprocesserna kring LKAB:s nya gruvprojekt i Svappavaara, Gruvberget, Leveäniemi och Mertainen har fördröjts av överprövningar och omtag. Men har processerna egentligen lett fram till några konkreta skärpta krav på verksamheten? Svaret är nej, säger David Berggård, gruvexpert på miljöskyddsenheten, länsstyrelsen, i Norrbotten. By: Ronny Olovsson Photo: Fredric Alm 34 L K A B M A G A Z I N E 5 : L K A B M A G A Z I N E 5 :

19 Living Buying blighted housing By: Maria Östlund Photo: Maria Östlund IT S GOOD THAT LKAB SHOULDERS RESPONSIBILITY THE RESIDENTS OF LINNÉVÄGEN ARE PLEASED THAT LKAB IS BUYING THEIR HOMES Bo Nilsson wants to close the books on the Linnévägen issue in Malmberget and welcomes LKAB s willingness to buy the damaged houses. On the other hand, Bengt Rindmalm has no plans to move. He has faith in the future and is fully occupied with painting and renovating his house. Bengt Rindmalm has devoted the summer to painting his two houses and building a gazebo for his niece. He likes living on Linnévägen and has no plans to move. Last spring LKAB began various surveys of the deformation zone that runs beneath the nine houses on Linnévägen and the damage this has caused. This was in order to discover whether mining operations have affected events directly or indirectly. The results of the surveys are not yet complete. IN THIS CONNECTION LKAB made it known that it is willing to assist the residents, even though the cause has not been determined. This means the renovation, or purchase, of the houses. The latter is based on market value established by independent property assessors, regardless of any damage caused by the deformation zone. It s good that LKAB shoulders responsibility for this. The company responded quickly when we drew their attention to the problem and they began surveying the area immediately, says Bo Nilsson, whose house was damaged so badly he was forced to move. This has taken its toll on us and it s important for us residents to close the books on the matter so we can go on with our lives. BENGT RINDMALM LIVES AT the bottom of Linnévägen. He s lived in his house since 1983 and in 2003 he also bought a neighbouring house for his mother and father. He keeps busy cleaning and renovating the houses most of the time. I ve loved it here from the very beginning and I intend to stay. Bo Nilsson appreciates LKAB s willingness to buy the blighted houses. The deformation zone is marked out as LKAB understands it to be today. But because drilling continues to determine the actual situation, the picture may change somewhat once the surveys are completed. I ve loved it here from the very beginning and I intend to stay. As long as the house stays upright, there s no problem. If you re going to stay, which I intend to do, it s important that everything looks neat and tidy, he says. SVENSK SAMMANFATTNING Linnévägens boende får hjälp LKAB inledde i våras olika undersökningar av den naturliga krosszon som löper under nio hus på Linnévägen i Malmberget och skadorna som den orsakat. Detta för att komma fram till om gruvans verksamhet direkt eller indirekt kan ha påverkat förloppet. LKAB gick i samband med detta ut med att bolaget trots att orsaken inte fastslagits är villigt att vara de boende behjälpliga. Detta med renovering, alternativt köp, av husen. 36 L K A B M A G A Z I N E 5 : L K A B M A G A Z I N E 5 :

20 Reportage Life at the bottom Warmth and room to move in Sweden s deepest workshop Jonny Mella, Per Erik Asplund, Stig Digersten and Jan Sydberg in the personnel break room on the old main level 1045 metres underground. It ll be a while before everything is ready on the new level. Until then, we ll work on both levels, says Stig. Talk about space and light. Sweden s deepest workplace is fifteen hundred metres underground and five kilometres long. Workshops and facilities are as bright as art galleries. It s warm too at least 18 Celsius, often warmer. By: Mauritz Magnusson Photo: Fredric Alm 38 L K A B M A G A Z I N E 5 : L K A B M A G A Z I N E 5 :

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