work will start to move the Arctic town of Kiruna, which alone accounts for nearly 90% of Europe’s iron ore production, about two miles east so tunnelling can continue.
“This is the greatest expansion in mining activity since the late 1800s when we first discovered how rich the mineral deposits were up in Lapland,” says Lars-Eric Aaro, chief executive of state-owned miner LKAB, which built Kiruna in 1900 and will spend Skr13bn ($1.9bn) on the move over the next 20 years.
Kiruna one of the wealthiest places in Sweden in terms of purchasing power. With the same average income as the buzzing financial centre of Stockholm and houses less than half the price, it is a place where blue collar workers can feel rich.
Oil and gas revival in the US. Iron ore revival in Sweden...
Sweden’s mining boom sets town on move
By Michael Stothard in Kiruna
Sweden’s most northerly town is about to pay a high price for sitting on the world’s largest underground iron ore seam.
In a few months, work will start to move the Arctic town of Kiruna, which alone accounts for nearly 90 per cent of Europe’s iron ore production, about two miles east so tunnelling can continue.
Hundreds of residential buildings will be torn down and rebuilt in stages as extraction of the slab of iron ore jutting beneath the town causes the earth above to crumble and crack.
The town’s century-old wooden church and other historic buildings will be taken apart early next year, loaded on to trucks and reassembled at another site. Hundreds of families from the town of 20,000 people will be relocated in the first of several big moves.
“This is the greatest expansion in mining activity since the late 1800s when we first discovered how rich the mineral deposits were up in Lapland,” says Lars-Eric Aaro, chief executive of state-owned miner LKAB, which built Kiruna in 1900 and will spend Skr13bn ($1.9bn) on the move over the next 20 years.
However, not everybody is happy.
“It is quite an extraordinary project and shows the lengths companies are willing to go to to keep mining during a boom,” says the town’s mayor, Kristina Zakrisson. “But there is a lot of anxiety from people about when they might have to move and how the feel of their town will be altered.”
The move, paid for entirely by LKAB, is the most striking symbol of the mining boom that has swept through Lapland in recent years, thanks to a quadrupling of the price of iron ore since 2005 and a sharp rise in the price of other metals found locally.
The higher prices have not only made it profitable to relocate an entire town – it has also led to a sharp increase in mining in Sweden and Finland since 2005. While there has been some cooling of prices and the Chinese economy in recent months, mining groups with a long-term outlook are planning to more than double the number of mines in coming years.
While established miners such as LKAB and Boliden are expanding rapidly and reopening old sites, foreign competitors such as Luxembourg-based Northland Resources and Canada’s Agnico-Eagle Mines have started operations in what they say is an under-explored region.
Kiruna residents agree that while the town’s relocation is a concern, it is a price most are willing to pay.
“No one is seriously opposed to the move because in the end everyone is benefiting from the mine’s expansion,” says Anna Ahlgren, a 28-year-old mining engineer.
Average wages at LKAB are up 26 per cent since 2005 to around Skr400,000 ($58,000) a year. All employees now receive an extra Skr60,000 each year if safety and production targets are hit.
This has made Kiruna one of the wealthiest places in Sweden in terms of purchasing power. With the same average income as the buzzing financial centre of Stockholm and houses less than half the price, it is a place where blue collar workers can feel rich.
“It is hard to hear about friends and family in the south enjoying the spring sunshine when it’s still the middle of winter up here, but the money is just so much better than elsewhere else its more than worth it,” says Arvid Åhrberg, an LKAB worker who has spent the last six years in Kiruna.
LKAB, which is aiming to hire another 1,200 workers to boost its 4,000 strong workforce, is striving to make Kiruna a more exciting place to live, funding theatres, schools and sports clubs. Summer houses, winter hiking expeditions and extended holidays are now part of the package for its workers. Looking to train the next generation, LKAB has developed a mining curriculum at the local high school for 16-19-year-olds.
“It is easy to get people to come here for a couple of years because of the money,” says Anders Lindberg, an LKAB spokesman. “The challenge is to get people to stay and build a life here.”
One concern raised by some of the more far-sighted residents is that the planned new town centre to the east will still be in the path of the mine, and so Kiruna might have to be moved again in the future.
“It is an unfortunate truth that we may have to move again at some point as the mining continues, but that will only be a problem in about 100 years from now,” says Ms Zakrisson.
“Today we are just focusing on making this move easier on everybody.”
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