LKAB to invest up to $47B over 20 years in shift to carbon-free sponge iron

In Sweden, state-owned mining and mineral group LKAB will switch from producing iron ore pellets to producing carbon-free sponge iron using new, hydrogen-based technology, a $47 billion investment over the next 20 years. It will be the largest industrial initiative in modern times and when fully introduced it will create thousands of new jobs and cut annual carbon dioxide emissions by the company’s customers worldwide by 35 million metric tons, equivalent to two thirds of Sweden’s domestic greenhouse gas emissions. Fossil-free Sweden aims to clear away obstacles to this and other major industrial start-ups that are able to cement Sweden’s role as a permanent world exhibition for fossil-free technology.

In addition to major investments and technological development, the common objective will require a new, better interplay between industry, politics and other forces for good. The list of issues that must be resolved is long, but some of the principle items are:

• Effective, legally secure and rapid licensing processes to enable new and essential climate-efficient investments and prevent their long-term postponement. It should be possible to shorten licensing processes by more than half provided all parties involved, including the industry itself, make their own part in the process more efficient.

• Investments in R&D and innovation support to base industries with a clear focus on fossil-free technology development and hydrogen.

• Securing the energy issue. Carbon-free production will require extreme quantities of green electricity, access to biofuels at competitive prices and the industrialization of hydrogen production. Fully developed, the new technology for carbon-free sponge iron will require electricity equivalent to one third of today’s total Swedish production.