LKAB Doubles Sales in April-June 2021 Quarter
Iron Ore LKAB announced that net sales for the second quarter were 98 percent higher than in the same period last year and totalled MSEK 14,748 (7,456). Operating profit increased by 386 percent to MSEK 9,161 (1,883). Both net sales and operating profit were affected by high spot prices for iron ore, an increased premium for pellets and higher delivery volumes, but this was offset by a lower dollar exchange rate and somewhat increased costs. Operating cash flow was boosted to MSEK 7,111 (972). LKAB CEO Mr Jan Moström said “More tonnes delivered at a higher price per tonne gives us a stronger basis for financing the development and the huge investments ahead of us in the coming 15–20 years to create a competitive LKAB. We are implementing a technology shift that will reduce our customers carbon emissions by 35 million tonnes, which is more than two thirds of Sweden’s total emissions.”
The average global spot price for iron ore products was USD 200 (93) per tonne for the quarter, which is USD 33 per tonne higher than in the previous quarter. Quoted pellet premiums for the quarter were twice as high as in the same period last year.
Deliveries are at a high level and amounted to 6.9 (6.6) Mt for the quarter. Demand from steelmakers for our products is good. However, expanding the capacity of the ore railway to both Luleå and Narvik remains a matter of urgency so that our deliveries can continue to meet demand in the longer term.
Maintenance shutdowns carried out during the spring were radically reduced in scope to lower the risk of spreading infection. However, this means additional maintenance interventions will be carried out in the second half, which will impact total production volumes and costs for the year.
Just over a year after the substantial seismic event in the Kiruna mine, production of crushed ore remains affected. Recovery work is under way and during the quarter important steps were taken that will allow us to mine out the remaining mining blocks affected as time goes on. At present production in the mine is at around 90 percent of capacity. The supply of crushed ore to the processing plants was able to be secured by redirecting crushed ore between production sites, which entailed increased costs.