Lars-Eric Aaro, vd och koncernchef

Framtidens Gruv- och Mineralindustri LKAB – Sveriges största industriinvesterare växer vidare

since more than hundred years

a high tech underground mine 

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

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”

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

worldwide

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

worldwide

PELLETS 88 %FINES 7 %

production capacity

SPECIAL PRODUCTS 4 %

GermanySwedenFinlandNetherlandsSaudi Arabia

EUROPE 74%MIDDLE EAST ANDNORTH AFRICA 21%

SOUTH EAST ASIA AND  FAR EAST 5 %

sales per market

the global iron ore market

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

• Produktion av järnmalm i världen 2009-2015 (est)

Järn- och stålmarknaden

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

Mt

3 miljarder 2050 enligt Arcelor

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 CO2

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.

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 1975‐2008 (in boxes Avg growth over the 

period)

•Steel Production in Europe, number of blast furnaces, and the 

annual output per furnace

ARTIC CIRCLE

the region of LKABthe region of LKAB

NORWAY SWEDEN FINLAND

RUSSIA

Luleå

Malmberget

SvappavaaraKiruna

Narvik

Luleå

production structure of LKAB

Mines Sorting Concentrating Pelletizing Products Harbours

Kiruna

Malmberget

PELLETS

FINES

PELLETS

NARVIK

LULEÅ

SOUTH

ERN SYSTEM

NO

RTH

ERN

SYS

TEM

Svappavaara Svappavaara

40 km

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 2008. Estimated cost is 12.4 billion kronor.

Mining began around 1900.

LKAB’s underground mining method

sublevel caving

Development

Production drilling and blasting

Loading

Dumping in shaft

Loading to trains (trucks in Malmberget) and haulage to crusher

communities in transition

• Investeringar

2001               

2006            

2010                             >2010

19,5 Mt               

23,3 Mt  

28 Mt 

30 Mt

investments for the futureMalmberget Kiruna Logistics Narvik Harbour

Main haulage level 

in Kiruna & 

Malmberget

New mines in 

Svappavaara

(Open pit)

SILA – storage facilities

the growth in LKAB

Year: 2001 2006 2010 >2015

Mt: 19,5 23,3 28,0 37

LKAB 37

Mine Pellet production Logistic Harbour

LKAB Value chain

20

30

40

Mt

28 Mt

Pellet plant, KK4

Pellet plant, MK3

20 Mt

33 MtNew locomotivesNew ore carsUpgrading terminals26 Mt

33 Mt

Sila, Narvik

26 Mtx

x

x x

x

x x37 Mt3 New minesKUJ 1365M 125026 Mt

x

production structure of LKAB

Mines Sorting Concentrating Pelletizing Products Harbours

Kiruna

Malmberget

PELLETS

FINES

PELLETS

NARVIK

LULEÅ

SOUTH

ERN SYSTEM

NO

RTH

ERN

SYS

TEM

Svappavaara Svappavaara

New miningProjects

Svappavaara

40 km

Europe’s biggest iron ore project

MertainenProved ore reserves:150 Mt, some magnetite

GruvbergetProved ore reserves:25 Mt magnetite50 Mt hematite

LeveäniemiProved ore reserves:100 Mt magnetite

Using pellets base on well defined raw material 

together optimized additives for high performance, 

gives steelmaker advantages. 

value‐in‐use

• LKAB Green Pellets• Long-term• World-leading R&D• Total quality from mine to customer• Sustainability

added value for the steel industry

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

Tillväxtstrategi i 3 dimensioner

• Säker och resurssnål produktionProduktion i världsklass

• Attraktiva LKABSveriges bästa arbetsgivare

• LKAB 37

• Prospektering• Tillväxtmöjligheter

- Nyttja våra styrkor för att växa

Tillväxt

Framtida möjligheter

Förädla och trimma dagens verksamhet

< 3 år 2 - 4 år > 2 - 7årFÖRVÄNTAT RESULTAT

(Ur LKAB 2012, Mål och strategiska aktiviteter)

Strategiska områden

thank you for your attention!

Climate smart by nature. LKAB Green Pellets