Financed by LKAB
According to the Swedish Minerals Act LKAB is obliged to pay for the effects and costs that arise when the company's mining activities lead to urban transformations.
To date LKAB has paid out about SEK 23 billion and reserved a further SEK 9,5 billion for the urban transformations since 2006 (as of 2024). Many people ask if LKAB can afford to pay for the urban transformations. The simple answer is that as long as we have mining operations in Malmfälten we have to be able to.
Being able to pay is a necessity if we are to continue mining and it’s not something we can opt out of or postpone. It’s expensive to mine iron ore deep under ground. LKAB always has to plan far ahead and think about the costs to make it profitable to continue. If costs are too high, it’s of course impossible to continue mining. Luckily the urban transformations will take place over a long period and not everything needs to be paid at the same time.
Provisions in SEK (2024)
Paid out in SEK (2024)
Several billion SEK
We can’t say how much the urban transformations will ultimately cost. This is because LKAB has chosen to mine deeper. In both Kiruna and Malmberget it’s a matter of several billion.
The urban transformations are included in the costs for goods sold. The provisions made are charged to the operating profit and entered on the balance sheet as a liability. When the money is finally paid out, it appears as urban transformation payments in the flow.
Keep track of the costs
LKAB details how much the urban transformations have cost every year in its annual and sustainability report.
Read the Annual and Sustainability Report hereWe want to do the right thing
Before LKAB is given a permit to mine iron ore in a particular area, the municipalities have to alter their local plans from residential and commercial areas to industrial areas. This in turn means that LKAB has to reach agreements with all the property owners and businesses that currently stand in the way of production at the mine. One of LKAB’s urban transformation team’s most important tasks is therefore buying properties, partly from the local authority and partly from private individuals.
LKAB has so far financed several major infrastructure projects and compensated the municipalities for municipal premises like schools, swimming baths and community centres. LKAB has also bought some properties from private owners.
Questions and answers
The time perspective looks a little different depending on where inside a particular area properties are located. Large parts of the communities are not all affected at the same time.
Here you can find the timetables:
Time to move Malmberget.
Time to move Kiruna.About 5,000 homes and 700,000 square metres of residential, business and industry premises will be affected. In the long term, almost 10,000 people, about a quarter of Malmfälten’s population, will need to move. 160 shops and companies will have to relocate.
Yes. There are some differences but the urban transformations will mostly be made in similar ways. The timetables, the areas and how the transformations are made are different but everyone affected will be compensated in the same way.
