Swedish climate villains

SSAB, Cementa and Fortum Värme are among Sweden’s biggest emitters of greenhouse gases. By 2030 these companies could reduce their carbon footprints to zero. However, if they are to succeed in transferring to more climate-friendly production, politicians must do their bit, companies tell Svenska Dagbladet.
“If we get a global trade system in place that can help us, there is a possibility for us to become climate neutral between 2030 and 2050, but on our own we can not do it,” says Stefan Savonen, head of energy and climate at state-owned mining company LKAB.

LKAB under pressure

State-owned LKAB’s new chief executive Jan Moström announced on Friday that the mining company will be separated into three new divisions: mining with processing plants in Kiruna, mining with processing in Malmberget and Svappavaara, and LKAB Minerals with production and sales and drilling technology LKAB Wassara, in order to adapt to new challenges. In addition, there will be a major reshuffle within the senior management, said Moström.
At the same time on Friday, iron ore prices fell to under 40 US dollars per ton, and noted their lowest level since 2008.

Dividend spree nears end

Two years ago, state-owned utility group Vattenfall and mining company LKAB paid SKr 6.8 and SKr 5.5 billion respectively in dividends to the state. However, the decline in electricity and commodity prices over the last few years has meant that the dividend paid into the state coffers by LKAB for the 2014 financial year shrunk to SKr 139 million, and the forecast for the next few years is gloomy.

The National Financial Management Authority (ESV) forecast in its June report that Vattenfall will pay a dividend of SKr 2.6 billion, and that LKAB will pay SKr 1.6 billion for the 2015 financial year.

The Ministry of Enterprise provides an overall assessment of the dividend pay-out from all of the state-owned companies, rather than predicting dividend pay-outs for individual companies, and will do so in conjunction with the autumn budget proposal.

“Of course we took into account in the spring already that it’s a new situation for many companies in the state portfolio, not least for Vattenfall and LKAB,” says Anna Magnusson, head of division for corporate governance at the Ministry.

LKAB unable to help

 

The group of Swedish industrialists that last week bought the Kaunisvaara processing plant from bankrupt miner Northland Resources had hoped to strike a deal with state-owned LKAB to buy iron ore below the market price . However, LKAB is not interested, saying it cannot afford to indulge the industrialists, merely to save jobs in northern Sweden.

“A state-owned company does not have the right to give any kind of support to a private company, and we cannot afford to either. We are ourselves working hard to save money in order to keep profitability at a reasonable level,” remarks LKAB chairman Sten Jakobsson.

According to Mats Leifland, the spokesman for the industrialists, who include BP chairman Carl-Henric Svanberg, the aim within the next 3-6 months is to find a solution with LKAB that is beneficial to both parties. If this does not happen, operations will be discontinued.