Framtidens Gruv- och Mineralindustri LKAB Sveriges största industriinvesterare växer vidare. Lars-Eric Aaro, vd och koncernchef

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2 Framtidens Gruv- och Mineralindustri LKAB Sveriges största industriinvesterare växer vidare Lars-Eric Aaro, vd och koncernchef

3 since more than hundred years

4 a high tech underground mine

5 the core of LKAB LKAB s mission is, based on the Swedish orefields, to manufacture and deliver to the world market upgraded iron ore products and services that create added value for customers. What makes us unique: Long-term relationships with customers Unique knowledge and skills Access to magnetite

6 the advantages of magnetite and innovative development, a green pellet Magnetite oxidizes to hematite during pellet manufacture - 60% of the thermal energy for pellet production comes from oxidation. The input of fossil fuels is one third of that required in the production of hematite pellets. Carbondioxide-emission from mine to sinter and pellets are one-seventh per tonne crude steel of what they are in the alternative process route LKAB Green Pellets

7 worldwide Swedish company 4,000 employees In about 15 countries 15 % of the employees abroad

8 worldwide HEAD OFFICE SALES & MARKETING DIVISION MINING DIVISION MINERALS DIVISION SPECIAL BUSINESSES DIVISION

9 production capacity SPECIAL PRODUCTS 4 % FINES 7 % PELLETS 88 %

10 sales per market SOUTH EAST ASIA AND FAR EAST 5 % MIDDLE EAST AND NORTH AFRICA 21% Germany Sweden Finland Netherlands Saudi Arabia EUROPE 74%

11 the global iron ore market LKAB s exports are about 3 percent of the total seaborne trade in iron ore.

12 Järn- och stålmarknaden Produktion av järnmalm i världen (est) Mt miljarder 2050 enligt Arcelor

13 the LKAB iron ore market Europe Stable market for steel and iron ore low growth. More cyclical sensitive than eg U.S. and Asia. Dependent on imports of iron ore. Europe is a pellet market. LKAB has a proximity, which means short lead times and less security stock. Trading of CO 2 in EU will likely encourage the use of LKAB pellets. North Africa and Middle East Strong economy provides stability, high growth with growing steel demand. Cheap energy in the form of natural gas makes it a major DR Pellet market. Dependent on imports of iron ore. LKAB has an advantage of Value in Use.

14 European steel production has been cyclical, but fairly constant over time (left graph) but with fewer blast furnaces that produce more (right graph) Steel Demand in Europe (in boxes Avg growth over the period) Steel Production in Europe, number of blast furnaces, and the annual output per furnace

15 the region of LKAB Luleå Narvik ARTIC CIRCLE Kiruna Malmberget Svappavaara Luleå RUSSIA NORWAY SWEDEN FINLAND

16 production structure of LKAB Mines Sorting Concentrating Pelletizing Products Harbours SOUTHERN SYSTEM NORTHERN SYSTEM Kiruna Malmberget 40 km Svappavaara Svappavaara PELLETS FINES PELLETS NARVIK LULEÅ

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18 the orebody in Kiruna A continuous orebody, 4 km long, 80 m wide and a known depth of 1500 m (below zero point). The present main level is at 1,045 m (from zero point) and a new one is being built at 1,365. The decision for a new main level was taken in October Estimated cost is 12.4 billion kronor. Mining began around 1900.

19 sublevel caving LKAB s underground mining method Dumping in shaft Loading Production drilling and blasting Development Loading to trains (trucks in Malmberget) and haulage to crusher

20 communities in transition

21 investments for the future Malmberget Kiruna Logistics Narvik Harbour Investeringar Main haulage level in Kiruna & Malmberget New mines in Svappavaara (Open pit) > ,5 Mt 23,3 Mt 28 Mt 30 Mt

22 SILA storage facilities

23 the growth in LKAB Year: >2015 Mt: 19,5 23,3 28,0 37

24 LKAB 37 Mt 40 x 37 Mt 30 x 3 New mines KUJ 1365 M Mt x 28 Mt Pellet plant, KK4 Pellet plant, MK3 x x 33 Mt New locomotives New ore cars Upgrading terminals 26 Mt x x 33 Mt Sila, Narvik 26 Mt 20 x 20 Mt Mine Pellet production Logistic Harbour LKAB Value chain

25 production structure of LKAB Mines Sorting Concentrating Pelletizing Products Harbours SOUTHERN SYSTEM NORTHERN SYSTEM Kiruna New mining Projects Svappavaara Malmberget 40 km Svappavaara Svappavaara PELLETS FINES PELLETS NARVIK LULEÅ

26 Europe s biggest iron ore project Mertainen Proved ore reserves: 150 Mt, some magnetite Gruvberget Proved ore reserves: 25 Mt magnetite 50 Mt hematite Leveäniemi Proved ore reserves: 100 Mt magnetite

27 value in use Using pellets base on well defined raw material together optimized additives for high performance, gives steelmaker advantages.

28 added value for the steel industry LKAB Green Pellets Long-term World-leading R&D Total quality from mine to customer Sustainability

29 performance in ironmaking LKAB Ironmaking Research Centre (IRC) Experimental Blast Furnace (EBF), Luleå Experimental Combustion Furnace (ECF), Luleå Air Liquide (VPS1), Luleå Pelletizing Research Centre, Malmberget (Aug 11) Experimental DR shaft (EDRP)- future, Luleå Hjalmar Lundbohm Research Centre (HLRC) at LTU 20 PhD-researchstudents LKAB Excellence Center in Mining and Metallurgy at LTU 5 new professors

30 Tillväxtstrategi i 3 dimensioner Framtida möjligheter Förädla och trimma dagens verksamhet Tillväxt LKAB 37 Prospektering Tillväxtmöjligheter - Nyttja våra styrkor för att växa Säker och resurssnål produktion Produktion i världsklass Attraktiva LKAB Sveriges bästa arbetsgivare < 3 år 2-4 år > 2-7år FÖRVÄNTAT RESULTAT

31 Strategiska områden (Ur LKAB 2012, Mål och strategiska aktiviteter)

32 thank you for your attention! Climate smart by nature. LKAB Green Pellets