During 2012 LKAB delivered 26.3 million tonnes of iron ore products, the highest delivery volume in modern times. The previous record, set in 2010, was exceeded by 0.3 million tonnes.
“Despite market unrest, we have managed to sell everything LKAB has produced – and then some,” says Markus Petäjäniemi, LKAB’s Senior Vice President, Logistics and Sales.
“We have also set a new record for pellet deliveries, 22.0 million tonnes, breaking the previous record from 2011 by one million tonnes,” adds Markus Petäjäniemi.
The greater demand for iron ore during the latter part of 2012 has come mainly from customers in the Middle East and Asia. Europe has been divided. LKAB has noted both increases and decreases in purchases by customers. The niche product, iron ore pellets, accounts for more than 80 percent of LKAB’s sales, with most pellet deliveries destined for customers in Europe.
– “LKAB’s iron ore pellets are a high-quality product for which there is strong demand. With a higher production capacity, we could have sold even more,” says Markus Petäjäniemi.
– “Demand was weakest during the summer, but has improved significantly since September. The fourth quarter also saw a new record, the highest in modern times, with more than 7.5 million tonnes in deliveries,” he says.
LKAB now accounts for 90 percent of iron ore production in the EU, and the company plans to increase capacity by 35 percent by 2015. This target will be reached by opening three new open-pit mines in Svappavaara, in the Kiruna area. About two thirds of deliveries are hauled by rail to LKAB’s harbor in Narvik for further shipping to customers throughout the world, while a third is shipped via the harbor in Luleå. Environmental permits for new mines, as well as capacity expansion on the railways in both Sweden and Norway, are prerequisites for the planned production increase.