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Inadequate planning for relocation of Kiruna and Malmberget

The Government and LKAB had insufficient decision-support data for decisions on mining operations that would lead to parts of Kiruna and Malmberget having to be moved. This has had negative consequences for LKAB but may also mean that municipalities, companies and private individuals will not receive correct compensation.

City of Kiruna with the mining area in the background.


Audit background

The state-owned Luossavaara Kiirunavaara Aktiebolag (LKAB) is one of Europe’s largest producers of iron ore pellets. In 2008, the company decided to establish new main levels in its underground mines. The new main levels KUJ 1365 and MUJ 1250 were a condition for continued mining in Kiruna (Kiruna municipality) and Malmberget (Gällivare municipality), but cause land deformations that make it necessary to move some of the infrastructure, municipal premises and housing in both cities.

Under its articles of association, LKAB has a strictly commercial remit and justifies its commitment to the relocation in terms of the provisions of the Minerals Act concerning compensation for damage and intrusion. Mining in the new main levels and subsequent relocation of parts of Kiruna and Malmberget, is associated with major risks. Deficient risk analysis may give rise to additional costs for the company and the surrounding community. Lack of clarity in the division of responsibility and financial commitment between the company, the State in its roles other than company owner, and the municipalities may have a negative impact on the company's long-term financial performance. It may also lead to ineffective implementation to the detriment of other parts of society.

Press contact: Olle Castelius, phone: +46 8-5171 40 04.

Presskontakt: , telefon: 08-5171 42 06.


Updated: 16 May 2018

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