The Special Products Division has a key role to play in developing a broader, stronger LKAB. The industrial minerals business is to be expanded and the division is tasked with evaluating new business opportunities with a focus on sustainability and greater resource utilisation.
To be able to fend off fluctuations in the iron ore market more effectively, LKAB needs to broaden its business. The Special Products Division, which currently accounts for 10 percent of the Group’s sales, has a clear mission to grow – organically, through innovation and development, and via acquisitions.
“If we make acquisitions they must be profitable, have a clear sustainability aspect and fit into the Group so that we can utilise our expertise and resources. The same is true of our development projects, where we are looking in particular at how we can add value by processing and developing by-products along the value chain,” says Leif Boström, Senior Vice President of the Special Products Division1.
Acquisition with a focus on sustainability
In autumn 2018 the UK industrial minerals company Francis Flower was acquired and during the year its operations have been integrated into the LKAB Group. The business recycles blast furnace slag from steel production and processes it into ground granulated blast furnace slag (GGBS), an environmentally friendly substitute for cement in the production of concrete.
“By replacing cement, the carbon emissions from the concrete produced can be reduced by up to 70 percent,” says Leif Boström.
The acquisition doubled LKAB Minerals’ operations in the UK. The hope is that the technology can also be used in other markets and that LKAB’s own concrete needs can be met using GGBS.
“Recycling slag from steel production to supply the mining operations with a more environmentally friendly concrete produces a kind of circular economy, with substantial gains,” says Leif Boström.
Development based on by-products
The division also runs the development project ReeMAP, which aims to extract rare earth elements and phosphorus from the residual products of iron ore mining. The project is now in a pilot phase for industrialising the process and technology.
Rare earth elements are used in mobile phones, batteries and magnets, among other things. Heavy and light rare earth elements, as well as phosphorus, are all on the EU’s list of “critical raw materials”; that is, materials of great importance for the EU’s future economy, industry, technology and environment. At present the EU is entirely dependent on imports of such elements which means there are great opportunities here.
The year also saw the start of a preliminary study into how a process for extracting vanadium can be industrialised. Vanadium is what is known as a battery metal, meaning that it can store large quantities of energy from sources such as wind turbines and solar panels.
Opportunities involving magnetite
In parallel with this the division is working to find further applications for the minerals that are already extracted.
“We are seeing that there are more uses for our magnetite, for example, including uses associated with storage of solar energy. Surplus energy generated during daylight hours can be stored as heat in the magnetite. During the year we supplied magnetite to a solar farm in Morocco which estimates that the energy stored in our magnetite could extend the operating period by four hours after the sun has gone down,” says Leif Boström.
Another application area is asphalt. Today asphalt is heated by burning fossil fuel, and asphalt processing accounts for around one percent of Sweden’s carbon emissions. The collaborative project SMMART (Swedish Magnetite Microwave Asphalt Road Technology) focuses on developing a method of heating asphalt with magnetite and microwave technology. The partners in the project are LKAB, Ecoloop, Combitech, Skanska, Nynas, Glasir, GeoArc, Luleå University of Technology, the Swedish Transport Administration (Trafikverket) and VTI – the Swedish National Road and Transport Research Institute.
Improving efficiency in iron ore mining
Another important task of the Special Products Division is the development of services and products that improve LKAB’s efficiency or reduce costs, such as future drilling systems and the development of the next generation of loading systems and loading vehicles. During the year a new explosive was developed and work is under way to install Optimisation While Drilling (OWD), a new control system that substantially increases drilling efficiency. The division also has a key role in the work on the test mine for the SUM development initiative. “The Special Products Division is entrepreneurial, with a focus on business development. Overall, our mission is to help make the whole of LKAB bigger and stronger,” concludes Leif Boström.
SPECIAL PRODUCTS DIVISION
The division’s sales in 2019 amounted to SEK 4.7 billion. Part of this is internal sales of products and services to the iron ore operations. The aim is that within five years the division will account for a considerably greater percentage of the Group’s total sales.
Growth and spreading risk Exposure to other markets with different business cycles and growth that is not limited by LKAB’s iron ore production.
Sustainability Processing and development of by-products, resulting in increased resource utilisation from existing operations and boosting profitability. Develop new applications and business with a focus on sustainability.
Innovation Focused innovation in units within LKAB that are exposed to competition, with solutions and technology that we have developed ourselves also creating value in an external market.
1 With effect from 1 January 2020 the Special Products Division has been moved into the Special Products Business Area and Leif Boström is Senior Vice President, Special Products Business Area with effect from the same date.