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2. Historic permit application decisive for the green transition in the north

LKAB today submitted an historic environmental permit application that is necessary for beginning the company's transition in Gällivare. In addition to continued mining and processing operations, the permit covers, among other plans, the establishment of HYBRIT's first demonstrator plant and a new apatite plant for extracting phosphorus and rare earth elements from current waste streams.

This is a crucial step towards a dramatic reduction in emissions within the global iron and steel industry and securing access to the critical raw materials which are essential for realising the climate transition.

"Our application is a decisive factor for us as a company, for Gällivare, for the region, for Sweden and for Europe's future. We are now in the midst of the biggest transition in LKAB's history and there is no time to lose. We have an ambitious schedule and it is critical that we and society show that we are together capable of addressing complicated issues, which are often implicit in environmental permit applications, while at the same time hastening the transition. It all starts in the mine; without mines, there can be no fossil-free steel, no electric vehicles and no wind turbines," says Jan Moström, President and Group CEO, LKAB.

LKAB has begun to transform its mining and processing operations with an aim to making all products and processes carbon-dioxide-free by 2045. A step-wise transition will reduce carbon dioxide emissions from the sites of the company's customers throughout the world corresponding to Sweden's total emissions. In Gällivare the new hydrogen-based HYBRIT process will be tested for the first time in industrial scale.

"The application for a new environmental permit for LKAB's operation is not only central for the climate, but also for Gällivare's future. We have an opportunity to be pioneers in the development of future ground-breaking technologies, both in the iron and steel industry and in the production of critical minerals for electric vehicles and wind turbines. This creates new green jobs that lay the foundation for positive societal development that benefits us as a municipality and the region," says Birgitta Larsson, Gällivare's municipal commissioner.

Electricity demand for HYBRIT's demonstrator plant, primarily for large-scale production of hydrogen, is estimated at 5 TWh per year. The new processes for sponge iron entail the replacement of fossil carbon with hydrogen that is produced with fossil-free electricity in a value chain for fossil-free steel. This means that LKAB's electricity demand will increase while carbon input is heavily reduced, and that carbon dioxide emissions from customers such as SSAB will also be cut when the imported coal that is needed for today's steelmaking is no longer needed.

The permit application that was submitted today to the Land and Environment Court not only covers two new plants, but also means greater potential for managing waste for better resource efficiency while enabling an increase in production volumes up to the levels stipulated in current permits. LKAB also awaits a ruling that will allow for construction of certain facilities to begin ahead of schedule.

"These are issues with a generational perspective where, by taking huge steps forward in the value chain, we foresee great possibilities for extending the life expectancy of the mine and creating innovative, climate-effective processes. It's a matter of building competitive advantage for the company and for the Swedish steel industry while we make a big contribution towards a reduction in Swedish emissions. We are now laying the foundations for sustainable operation beyond 2060," says Jan Moström.

The first step in LKAB's transition from production of today's pellets to production of carbon-dioxide-free sponge iron starts in Gällivare. Here, the goal is to reach targeted annual production of about 5.4 million tonnes by the early 2030s. This aligns with SSAB's objective to transform its Nordic operations.

The application refers to a facility for extraction of apatite concentrate from residual material that is currently landfilled. From the apatite concentrate, phosphorus for fertiliser and rare earth metals, for example, for use in electric vehicles and wind turbines, can be separated. The plant will mainly supply LKAB's planned industrial site in Luleå with apatite concentrate. In addition, the application also covers HYBRIT's demonstrator plant for direct reduction of iron ore with hydrogen. The aim is to verify that the HYBRIT technology is viable in industrial scale and it is a decisive step that will allow LKAB to continue to successively introduce the technology in order to boost the value added and reduce customers' carbon dioxide emissions.

"Together with our partners LKAB and Vattenfall, we are writing a new chapter in the history of Swedish industry. HYBRIT's demonstrator plant goes hand in hand with SSAB's own green transition, since we are concurrently replacing our blast furnaces in Oxelösund with electric arc furnaces. The fossil-free sponge iron that will be produced in Gällivare will essentially cover demand from Oxelösund. Demand for fossil-free steel is increasing and I look forward to the day when we can start making commercial deliveries during 2026," says Johnny Sjöström, Executive Vice President and Head of SSAB Special Steel Division.

HYBRIT is a joint initiative of SSAB, Vattenfall and LKAB. The aim is to develop a fossil-free value chain for iron and steel production, with fossil-free electricity and hydrogen, which can potentially minimise Sweden's total carbon dioxide emissions by at least 10 percent. Now the next step of the process is being taken with an application to build a demonstrator plant for the HYBRIT technology in Gällivare. The plan is to produce about1 to 1.5 million tonnes of sponge iron per year, which nearly corresponds to SSAB's entire demand for the Oxelösund steel plant. For each tonne of sponge iron produced steel-industry carbon dioxide emissions can be lowered by about 1.5 to 2 tonnes when blast furnaces are replaced with electric arc furnaces.

Contact: Anders Lindberg, Group Media Relations Manager at LKAB, Tel: 46 (0)980 783 55. E-mail:[email protected]

LKAB is an international mining and minerals group that offers sustainable iron ore, minerals and special products. We are committed to developing carbon-free processes and products by 2045, leading the transformation of the iron and steel industry. Since 1890 we have developed through unique innovations and technological solutions and are driven forward by more than 4,500 employees in 12 countries. In 2021, the LKAB group had sales of about SEK 47 billion. www.lkab.com

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