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The state-owned LKAB has decided its future strategy. Iron mushrooms produced with green hydrogen gas will eventually replace the company’s iron ore granules. The conversion is estimated to cost approximately SEK 20 billion and requires 55 TWh of electricity per year.
LKAB calls it “the largest industrial investment in modern times.” The future plan contains three avenues of change:
1. A new world standard for mining will be developed. As Ny Teknik has already reported, it is about mining taking place at greater depths and becoming more automated and digitized than at present.
2. Iron mushrooms produced with green hydrogen gas will eventually replace iron ore granules.
3. Extract critical minerals from mining waste. With fossil-free technology, important earth metals and phosphorus for mineral fertilizers will be extracted from current waste. Ny Teknik has told us here.
LKAB estimates that the conversion will cost between 10 and 20 billion SEK per year over a period of approximately 15 to 20 years. Calculated over a 20-year period, this can add up to a total of SEK 400 billion.
“Go from pellets to iron mushrooms”
Despite the large sum, LKAB believes that the company manages the investment itself.
– There are two ways to do it. One part is that we are working on a new world standard for mining production that will increase our competitiveness. It will also affect the way we run our existing business in processing plants. And when we go from pellets to iron mushrooms, the revenue is more than double, says Jan Moström, CEO of LKAB.
How can you be sure that there is a high demand for carbon dioxide-free iron products in steel mills?
– The steel industry accounts for 25 percent of the industry’s total carbon dioxide emissions and must switch to hydrogen reduced iron, which means we expect this demand to come. During this transition period, we will be producers of iron ore pellets and iron mushrooms, says Jan Moström.
Permitting processes will be the key to change
But for change to be possible, an expansion of Sweden’s electricity production is required. LKAB estimates that approximately 55 TWh of electricity is needed. This corresponds to about a third of the electricity produced in Sweden each year today.
– Initially, we have the necessary energy, but after that, competitive renewable electricity must be built. We engage in dialogue with suppliers to create opportunities to generate the necessary energy and evaluate it as fully as possible, says Jan Moström.
One challenge in that expansion is the permitting processes. The mining executive director points to them as the “key” to change.
How much do they need to be shortened?
– I can’t say exactly in time. Today some go very fast while others take a long time. But they must be significantly reduced without compromising environmental requirements, says Jan Moström.
“The logical step of the development program”
LKAB is already participating together with SSAB and Vattenfall in the Hybrit project, with the aim of testing the technology to use hydrogen to split iron ore into iron and oxygen. A pilot plant in Luleå has recently been launched to test the method, which is called direct reduction.
The idea with technology is that today’s blast furnaces can be replaced by shaft furnaces where water is formed as a by-product instead of carbon dioxide. The product formed in the shaft furnace are small iron balls, the so-called iron sponges, which must then be melted to be further processed into steel products.
Jan Moström points out that Hybrit is a development project, with a focus on developing technology for direct reduction.
– What we are doing now is industrializing it. We take Hybrit’s knowledge and industrialize it. That’s the logical step in the development program, he says.
The investment is estimated to create approximately 2,000-3,000 new jobs per year in Kiruna and Gällivare, mainly construction jobs.
“We can strengthen Sweden as a fossil-free country”
When the conversion is fully completed, the carbon dioxide emissions of LKAB customers around the world will be reduced by more than 35 million tons annually, according to the company’s calculations.
– We must get rid of the climate footprint. Otherwise, we are heading for disaster, not just for this company but for everyone in the reality we all live in. We have a challenge ahead of us to be able to deliver a climate-friendly product for those who come after us, says LKAB: President Göran Persson:
– Here we take the step, a risk, yes, but not without that risk there are no mining operations in Norrland.
The Minister of Commerce and Industry, Ibrahim Baylan (S), is positive:
– I’m pretty sure we can make this a successful strategy and that we can strengthen Sweden as a fossil-free country, he says.
LKAB announced their plans on Sunday evening in a discussion post together with Fossil-free Sweden on DN Debatt and also published a press release on Monday.
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