Swedish iron ore producer Luossavaara-Kiirunavaara Aktiebolag’s (LKAB) iron ore output in Q3 FY20 declined by 7pc to 6.8mn mt from 7.3mn mt in the prior-year period due to maintenance shutdowns from earthquake damage in May to the Kiruna mine and precautionary curbs to combat the COVID-19 pandemic.
The Kiruna underground mine complex has been operating with 70pc to 80pc of its capacity. Inspection and repair work is required to restore its full capacity.
Sales
Iron ore sales in Q3 FY20 increased by 38pc to 7.6mn mt from the prior-year period, according to the company’s Q3 interim report. Iron ore pellets contributed to 82pc of the total Q3 sales, up by 4pc from 79pc in the prior-year period.
Outlook
LKAB said that the economic impact of the COVID-19 pandemic will continue to affect the globe and the company, however, its extent is difficult to predict. It added that iron ore prices continued their strong upward trend in Q3 but the assessment remains that iron ore prices will gradually decrease in Q4.
The company said that urban transformation work, an increased number of acquisitions as well as the construction of new replacement properties for property owners could result in increased expenditure over the year.
Negotiations with Gällivare Municipality regarding eastern Malmberget are at a standstill which could delay the schedule for the decommissioned area and thus, limit future production.
LKAB is conducting extensive development programs aimed at sustainable future mining and steelmaking processes, including the development of the Sustainable Underground Mining (SUM) project which is an integrated, efficient, carbon-free mining system. In Malmberget, the testing of fossil-free pelletization is currently underway.
The company is also working to build a fossil-free industrial park for recycling mining waste and producing critical raw materials, apart from various other projects.