Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate change
• Diversity & Inclusion
• Safety
• Resource efficiency
• Community engagement
• Human rights
• Responsible supply chain

Environmental Achievements

• Reduced CO2 emissions per tonne of product to 25.8 kg/tonne (25.7 kg/tonne in 2018)
• Reduced energy intensity per tonne of finished product to 158 kWh/tonne (161 kWh/tonne in 2018)
• Issued first green bonds, raising SEK 2 billion for investments in carbon-free, autonomous mining

Social Achievements

• Accident rate decreased to 6.8 accidents per million hours worked (7.7 in 2018)
• Percentage of women in the Group increased to 23.8% (22.1% in 2018)
• Percentage of women in management increased to 23.0% (21.4% in 2018)
• Signed the UN Global Compact

Governance Achievements

• Continued work on strengthening safety culture and reducing accident rate
• Implemented a comprehensive program to improve production stability
• Introduced a new Group structure effective from 1 January 2020

Climate Goals & Targets

Environmental Challenges

• Volatile iron ore prices
• Slowdown in demand for steel, particularly in Europe
• Protracted permit processes with uncertain outcomes
• Dam safety concerns
• Pellet disintegration and dust generation during transport

Mitigation Strategies

• Redirected volumes to other customers and markets
• Developed strategic maintenance to optimize production
• Working with authorities to improve permit processes
• Proactively developing dam maintenance procedures and techniques
• Reviewing drops and chutes in the logistics chain to avoid large drops
• Modernizing locomotives and improving port capacity

Supply Chain Management

Supplier Audits: 41 on-site monitoring visits in 2019

Responsible Procurement

• Supplier Code of Conduct
• Risk-based approach to supplier monitoring
• On-site monitoring of higher-risk suppliers
• Training programs for suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Water shortages
• Heavy rain
• Avalanches
• Storms

Transition Risks

• High transition costs due to environmental requirements
• Loss of free allocation of emission allowances

Opportunities

• Development of carbon-free steelmaking process (HYBRIT)
• Development of carbon-free, digitalised and autonomous mining (SUM)

Reporting Standards

Frameworks Used: GRI Standards at the Core level

Third-party Assurance: KPMG AB (Limited Assurance Report on the Sustainability Report)

Sustainable Products & Innovation

• Highly upgraded iron ore products with environmental benefits
• GGBS (cement substitute)
• Magnetite for various industrial uses

Environmental Metrics

ESG Focus Areas

• Climate change
• Skills
• Sustainability

Environmental Achievements

• Reduced carbon emissions by 84 percent per tonne of product from 1960 to today’s pellet production
• Steel produced with LKAB’s pellets contributes to 14 percent lower carbon emissions than the European average
• One pelletising plant in Malmberget run on fossil-free tall oil pitch, avoiding emissions equivalent to around 54 Kt of fossil carbon dioxide.

Social Achievements

• Grand opening of Kiruna’s new city centre.
• Improved lost time accident rate to 6.5 per million hours worked (from 8.2 the previous year).

Governance Achievements

• Revised finance policy adopted by the Board.
• Updated “Safety first” guideline adopted by Group executive management.

Climate Goals & Targets

Environmental Challenges

• Unpredictable and inefficient permitting processes.
• Insufficient fossil-free energy supply.
• Skills shortage.
• Insufficient capacity on the Ore Railway.
• Climate-related risks (physical and transition risks).

Mitigation Strategies

• Ongoing stakeholder dialogue with authorities.
• Evaluating future power supply options, focusing on wind power.
• Intensive efforts to recruit new talent and encourage professional development among existing employees.
• Continuous dialogue with the Swedish Transport Administration for improved railway maintenance and capacity expansion.
• Scenario analysis performed in accordance with TCFD recommendations to understand climate challenges and opportunities.

Supply Chain Management

Supplier Audits: Around 5,400 suppliers globally, audit details not specified

Responsible Procurement

• Code of Conduct for employees
• Supplier Code of Conduct
• Sustainable purchasing practices based on risk perspective

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Changes in water levels

Transition Risks

• Regulatory changes
• Market shifts
• Electricity price volatility
• Insufficient fossil-free electricity production

Opportunities

• Development of energy-efficient products
• Processing of transition-critical raw materials
• Circular business model
• Demand for climate-efficient products

Reporting Standards

Frameworks Used: GRI

Third-party Assurance: Auditor’s assurance provided (KPMG AB)

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 11 (Sustainable Cities and Communities)
• Goal 13 (Climate Action)
• Goal 5 (Gender Equality)
• Goal 8 (Decent Work and Economic Growth)
• Goal 12 (Responsible Production and Consumption)
• Goal 15 (Life on Land)
• Goal 17 (Partnerships for the Goals)

LKAB's initiatives contribute to these goals through various sustainability efforts, including the transition to carbon-free sponge iron, community development, and stakeholder engagement.

Sustainable Products & Innovation

• Carbon-free sponge iron
• Extraction of critical minerals from mine waste

Environmental Metrics

ESG Focus Areas

• Climate change
• Safety
• Biodiversity
• Resource efficiency
• Social responsibility
• Skills development
• Diversity & Inclusion

Environmental Achievements

• Reduced carbon emissions by 84% since 1960
• Decreased energy use to 165 kWh per tonne of finished product (from 176 kWh in 2022)
• Used tall oil pitch instead of fuel oil in one pelletizing plant, avoiding 50 kt of fossil CO2 emissions

Social Achievements

• Improved employee satisfaction index to 3.39 (on a scale of 4)
• Increased percentage of women in the workforce to 27% (from 26% in 2022)
• Increased percentage of women managers to 29% (from 28% in 2022)
• Made the list of Sweden’s 100 most attractive employers for young talent

Governance Achievements

• Complied with applicable remuneration guidelines adopted by the general meeting
• No departure from guidelines and no deviation from the decision-making process

Climate Goals & Targets

Environmental Challenges

• Tragic fatal accident in November at a contractor’s establishment
• Delays in essential permits for planned development
• Major derailment on the Iron Ore Line impacting delivery volumes
• Insufficient capacity on the Iron Ore Line
• Competition for skilled workers
• Unpredictable and slow permitting processes
• Securing sufficient fossil-free electricity supply

Mitigation Strategies

• Group-wide efforts focusing on safety culture
• Close and transparent dialogue with parties involved in permitting processes
• Investments totaling close to SEK 1 billion to enhance Iron Ore Line capacity and flexibility (new locomotive workshop, acquisition of Duroc Rail, new rail cars)
• Strategy for skills supply with activities aimed at attracting, recruiting, and retaining expertise
• Collaboration with universities and colleges
• Active dialogue with energy companies and authorities to secure power supply
• Internal flow optimization to increase capacity within the system

Supply Chain Management

Responsible Procurement

• Partnership with strategic suppliers to increase sustainability, productivity and cost-effectiveness
• Supplier Code of Conduct
• Basic Requirements for suppliers
• Two subcontractor levels maximum in new/renegotiated contracts

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Changes in water levels

Transition Risks

• Regulatory changes
• Market shifts
• Electricity price volatility
• Insufficient fossil-free electricity supply

Opportunities

• Production of fossil-free sponge iron
• Processing of critical minerals
• Time arbitrage in electricity price volatility

Reporting Standards

Frameworks Used: GRI

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 13 (Climate Action)
• Goal 8 (Decent Work and Economic Growth)
• Goal 5 (Gender Equality)
• Goal 15 (Life on Land)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 11 (Sustainable Cities and Communities)
• Goal 17 (Partnerships for the Goals)

LKAB's initiatives contribute to these goals through various actions described in the report.

Sustainable Products & Innovation

• Fossil-free sponge iron
• Phosphorus and rare earth elements from waste streams

Awards & Recognition

• Sustainability Achievement of the Year 2023 for CLIMB tool