LKAB plots carbon-free pathway with direct reduced iron switch

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LKAB has presented its new strategy for the future, setting out a path to achieve net-zero carbon emissions from its own processes and products by 2045, while securing the company’s operations with expanded mining beyond 2060.

Jan Moström, President and CEO of LKAB, said the plan represented the biggest transformation in the company’s 130-year history, and could end up being the largest industrial investment ever made in Sweden.

“It creates unique opportunities to reduce the world’s carbon emissions and for Swedish industry to take the lead in a necessary global transformation,” he said.

The strategy sets out three main tracks for the transformation:

  • New world standard for mining;
  • Sponge iron (direct reduced iron) produced using green hydrogen will in time replace iron ore pellets, opening the way for a fossil-free iron and steel industry; and
  • Extract critical minerals from mine waste: using fossil-free technology to extract strategically important earth elements and phosphorous for mineral fertiliser from today’s mine waste.

The transformation is expected to require extensive investments in the order of SEK10-20 billion ($1.2-2.3 billion) a year over a period of around 15 to 20 years within LKAB’s operations alone. The company said the new strategy was a response to market developments in the global iron and steel industry, “which is undergoing a technology shift”.

The move could cut annual carbon dioxide emissions from the company’s customers worldwide by 35 Mt, equivalent to two thirds of Sweden’s domestic greenhouse gas emissions, it said.

Developments under the HYBRIT project, in which SSAB, LKAB and Vattenfall are collaborating on a process to enable the reduction of steel from iron ore using hydrogen instead of carbon, will be keenly observed following the miner’s announcement.

On top of this collaboration, LKAB is working with Sandvik, ABB, Combitec, Epiroc and several other industry leaders to develop the technology that will enable the transition to fossil-free, autonomous mines, it said.

Moström added: “The market for iron and steel will grow and, at the same time, the global economy is shifting towards a carbon-free future. Our carbon-free products will play an important part in the production of railways, wind farms, electric vehicles and industrial machinery.

“We will go from being part of the problem to being an important part of the solution.”

The market for steel is forecasted to grow by 50% by 2050. This growth will be achieved by an increase in the upgrading of recycled scrap in electric arc furnaces, according to LKAB. Today, the iron and steel industry accounts for more than a quarter of industrial emissions and for 7% of the world’s total carbon dioxide in the atmosphere, according to an IEA report.

The company said: “The global market price for recycled scrap is now twice that of iron ore pellets. The carbon-free sponge iron that will in time replace iron ore pellets as LKAB’s main export product is suitable for arc furnaces, allowing the company to offer industries throughout the world access to carbon-free iron.”

Moström said the switch from iron ore pellets to carbon-free sponge iron was an important step forward in the value chain, increasing the value of its products at the same time as giving customers direct access to “carbon-free iron”.

“That’s good for the climate and good for our business,” he said. “This transformation will provide us with good opportunities to more than double our turnover by 2045.”

During the transformation period, LKAB will supply iron ore pellets in parallel with developing carbon-free sponge iron.

To reach the new strategy’s goals, rapid solutions must be found for various complex issues, according to the company. These include permits, energy requirements and better conditions for research, development and innovation within primary industry.

Moström said: “Our transformation will dramatically improve Europe’s ability to achieve its climate goals. By reducing emissions primarily from our export business, we will achieve a reduction in global emissions that is equivalent to two-thirds of all Sweden’s carbon emissions. That’s three times greater than the effect of abandoning all cars in Sweden for good.

“It’s the biggest thing we in Sweden can do for the climate.”

Göran Persson, Chairman of the Board of LKAB, said: “What Swedish industry is now doing, spearheaded by LKAB, is to respond to the threatening climate crisis with innovation and technological change. In doing so, we are helping to secure a future for coming generations. This will also create new jobs in the county of Norrbotten, which will become a hub in a green industrial transformation. Succeeding in this will create ripples for generations to come. Not just here, but far beyond our borders.

“Now we are doing, what everyone says must be done.”

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