Making the most of magnetite LKAB

MAKING THE MOST OF MAGNETITE

LKAB is an international high-tech minerals group and the only major producer of iron ore in Europe. Philip Yorke talked to Per-Erik Lindvall, LKAB’s business development director, about the company’s new iron ore fields and its ongoing investment in high-grade pellets for blast furnaces.

LKAB was founded in 1890, however the company’s history dates back to the 1660s when the first known samples of Gallivare ore were discovered in the mountains of Kiirunavaara and Luossavaara in northern Sweden. Iron ore mining has driven the development of this remote area from a sparsely populated mountain region to a modern industrialised conurbation. LKAB has also invested millions of euro’s to improve road and rail links to the harbour at Narvik, Norway, as well as to its harbour at Lulea in Sweden. A new terminal structure for Kiruna has also been completed with loading of ore trains at surface level achieved via two high storage silos and a new receiving facility for additives.

In addition, in January 2006 the company began building a new harbour facility that included an extensive storage and discharging centre with additional underground silos constructed in Narvik. The entirely new harbour facility in Narvick was commissioned and inaugurated in 2009. Today LKAB serves iron ore markets in North Africa, the Middle East and South East Asia. The company’s industrial minerals are sold mainly in Europe, but also to growing markets in Asia and the USA. LKAB has around 3700 employees, of which 600 are located outside Sweden.

Three divisions, one mission

The company has three key divisions: the mining division, the minerals division and the special businesses division. The mission for all three is to deliver high quality, upgraded iron ore products and services that create added value for its customers. LKAB’s mining division creates products that make hot metal production more efficient. Lindvall said, “Extracting iron ore from hard rock has its disadvantages; however, our Magnetite SE Fe3O4 iron ore provides more oxygen at source than the alternative Hematite SE Fe2O3, which is more commonly mined elsewhere. We have developed our facilities for the production of iron ore pellets and we see this as our fastest growing market for the future.

“Blast furnace managers prefer our high grade magnetite ore in this form as it offers greater efficiency and much lower CO2 emissions. In fact LKAB’s green pellets from magnetite are eight times more efficient than Hematite products when it comes to emissions. This is a major product advantage with the increasing focus on sustainability and global warming. What’s more, we are the only major iron ore producer in Europe and the second biggest in the world when it comes to manufacturing pellets. Currently we are producing more than 26 million tons of Iron ore products per year and this figure is growing year on year.” Today, pellets account for more than 80 per cent of LKAB’s ore sales and represent the company’s most upgraded iron ore product.

The LKAB minerals division produces and markets selected minerals, which are adapted to suit a customer’s specific requirements. At the present time, LKAB’s high grade minerals include magnetite, olivine, mica and huntite. For the company’s special businesses division the overall strategy is to support the group’s activities by contributing to improving efficiency and technical development and, where appropriate, it will also develop business outside the parameters of LKAB.

Expanding global operations

Since the late 1980s LKAB has run an office in Singapore to promote sales of its iron ore products in Asia. However the company’s main focus today is ChiLindvall explained. “We have traditionally focused on serving our local European markets, but we learned some valuable lessons during the economic downturn when demand for steel in Europe slowed dramatically. We realised that we could no longer rely on the European steel market and had to look to the emerging markets of Asia and in particular China.

“We have always had a good understanding of the Chinese market and we sent sales delegates to China to see potential customers. The demand for steel in China is growing exponentially and we now have established a strong presence there. We are also developing our sales networks in Africa and South America as well as in our other established export markets. Looking at the global picture, Europe is still by far our biggest market, with Germany leading the way in terms of sales. Our combined export markets represent around 80 per cent of our overall sales. Our strategy over the next three to five years therefore is to increase our sales volume from today’s 26 Mtpa to 35-40 Mtpa.”

Strengthening expertise through investment

LKAB’s strategy is to maintain its commitment to research and development to become the world leader in the pelletisation of iron ore. To this end, LKAB invested in an entirely new research facility at Malmberget known as the AggloLab. Future plans also include an experimental pelletising plant (EPP) and together with the existing experimental blast furnace at Lulea, will provide unique conditions for developing processes and products for the future.

In addition LKAB has provided a 100 million Kroner donation to the Hjalmar Lundbohm research centre for mining and metallurgy at Lulea University. Activities involve three main areas; sustainable ore production, intelligent pellets and new products. Ten different research projects have already begun and these are conducted in close collaboration with the university’s and LKAB’s own research departments. n

Per-Erik Lindvall, LKAB’s business development director