AEC Member LKAB Transforms Global Steelmaking


LKAB is Europe’s largest iron-ore producer with production facilities in Northern Sweden. It specialises in extracting iron ore and processing it into pellets using coal and oil-powered pellet plants. In 2021, LKAB transformed the world industry standards with autonomous, digitalized, electrified and carbon dioxide free mining. It produces sponge iron using hydrogen and extracts essential minerals from mining waste. This strategy is the biggest transformation in the company’s 130-year history and is the largest industrial investment ever made in Sweden.

LKAB aims to eliminate carbon dioxide emissions from the steelmaking process by using only fossil-free feedstock and energy in all parts of the value chain. In 2021 after five years of feasibility studies LKAB in partnership with Vattenfall and SSAB has produced the world’s first hydrogen-reduced sponge iron, used as a raw material in steelmaking. The breakthrough demonstrates the viability of using hydrogen to process iron ore, instead of conventional fuel. The steel market is forecast to grow by 50% by 2050. LKAB pushes global iron and steelmaking responsible for 7% of total greenhouse gas emissions towards fundamental green transformation.

Now LKAB is moving from the pilot project to the next phase. By 2026, it will begin full industrial scale production of fossil-free sponge iron at a demonstration plant. LKAB aims to pioneer a fossil-free value chain “from mine to steel” in the market. They have committed to invest between 30 and 40 billion EUR to convert its coal and oil-powered pellet production for coal powered blast furnaces to sponge iron for electric arc furnaces powered by renewable electricity at the processing facilities in Sweden and Finland. Potentially reducing emissions by 10% in Sweden and 7% in Finland. When LKAB transforms its operations from pellets to sponge iron it will save 35 million tons in own and clients operation emissions corresponding to two thirds of Sweden’s territorial emissions

It is estimated that technological transition will stimulate labour market and directly create up to 3000 workplaces in the European Arctic.

“The AEC strongly supports LKAB’s commitment. We see green innovation as the key to combating climate change and addressing sustainable development at large,” said Mads Qvist Frederiksen, the AEC Director

Swedish Minister of Foreign Affairs, Ann Linde, highlighted LKAB’s initiative as a part of the industries’ contribution in the global green transformation.

Read more about the project here.

Title photo: KA3KK4 by Fredric Alm / LKAB

This press release first appeared on the website of the Arctic Economic Council.


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