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Can new 400 billion kronor investment transform Sweden’s mining industry?

Sweden's state-owned mining company LKAB has committed to investing hundreds of billions of kronor to go carbon-neutral by 2045, described as potentially the largest industrial investment ever in the Nordic country.

Can new 400 billion kronor investment transform Sweden's mining industry?
LKAB's mine in Kiruna, northern Sweden. Photo: Hanna Franzén/TT

LKAB said on Monday it would invest up to 400 billion Swedish kronor ($46.6 billion) to “achieve net-zero carbon emissions from its own processes and products by 2045”.

Investments of between 10 and 20 billion kronor would be made yearly over a period of 15 to 20 years, the company said.

“This is the biggest transformation in the company's 130-year history and could end up being the largest industrial investment ever made in Sweden,” Jan Moström, president and CEO of LKAB, said in a statement.

The strategy to reach net-zero emissions would focus on three branches, one being a new standard for mining and another the use of fossil-free technology to extract strategic minerals from today's mining waste.

Lastly the company would leverage green energy, likely using hydrogen, to produce another form of iron known as “sponge iron” rather than traditional iron ore pellets, greatly reducing emissions during the steel-making process.

“In switching from iron ore pellets to carbon-free sponge iron we are taking an important step forward in the value chain, increasing the value of our products and at the same time giving our customers direct access to carbon-free iron,” Moström said.

In early November, the company announced it had created the world's first “fossil-free” iron ore pellets, with biofuel taking the place of oil and coal during the heating process.

The development of fossil-free “sponge iron” is part of a joint project between LKAB, steelmaker SSAB and state-owned utility Vattenfall with the aim of developing a fossil-free process for producing steel, which relies on the combination of iron ore and coal.

According to LKAB, their Swedish operations currently produce 700,000 tonnes of carbon emissions a year, or about four percent of Sweden's industrial emissions, making it Sweden's fourth largest emitter.

The mining giant added that global steel and iron production today accounted for about seven percent of the world's emissions, and that widespread use of “sponge iron” could greatly reduce global emissions.

LKAB also said the transition would mean the creation of 3,000 jobs but with the steel market “forecasted to grow by 50 percent by the year 2050”, LKAB also expected their carbon-free offering would also greatly increase its revenues.

During the transition, LKAB would continue to sell “iron ore pellets in parallel with developing carbon-free sponge iron”, the company said.

During a press conference on Monday, Moström however also pointed to a number of challenges that had to be overcome to achieve the transition, including the need for technological developments and large-scale production of green energy to power facilities.

Isadora Wronski, head of Greenpeace Sweden, said they welcomed LKAB's “ambition to remove fossil energy from their processes”. but added that the aim of going fossil-free was “not enough.”

“Industries first and foremost need to reduce their use of resources… and the energy used needs to be sustainable, eliminating any plans for large-scale bio energy use,” Wronski said in an emailed statement to AFP.

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READER QUESTIONS

Reader question: When am I eligible for a Swedish pension?

A reader got in touch to ask how long he had to work in Sweden before he was eligible for a pension. Here are Sweden's pension rules, and how you can get your pension when the time comes.

Reader question: When am I eligible for a Swedish pension?

The Swedish pension is part of the country’s social insurance system, and it can seem like a confusing beast at times. The good news is that if you’re living and working here, you’ll almost certainly be earning towards a pension, and you’ll be able to get that money even if you move elsewhere before retirement.

You will start earning your Swedish general pension, or allmän pension, once you’ve earned over 20,431 kronor in a single year, and – for almost all kinds of pension in Sweden – there is no time limit on how long you must have lived in Sweden before you are eligible.

The exception is the minimum guarantee pension, or garantipension, which you can receive whether you’ve worked or not. To be eligible at all for this, you need to have lived in Sweden for a period of at least three years before you are 65 years old. 

“There’s a limit, but it’s a money limit,” Johan Andersson, press secretary at the Swedish Pension Agency told The Local about the general pension. “When you reach the point that you start paying tax, you start paying into your pension.”

“But you have to apply for your pension, make sure you get in touch with us when you want to start receiving it,” he said.

Here’s our in-depth guide on how you can maximise your Swedish pension, even if you’re only planning on staying in Sweden short-term.

Those who spend only a few years working in Sweden will earn a much smaller pension than people who work here for their whole lives, but they are still entitled to something – people who have worked in Sweden will keep their income pension, premium pension, supplementary pension and occupational pension that they have earned in Sweden, even if they move to another country. The pension is paid no matter where in the world you live, but must be applied for – it is not automatically paid out at retirement age.

If you retire in the EU/EEA, or another country with which Sweden has a pension agreement, you just need to apply to the pension authority in your country of residence in order to start drawing your Swedish pension. If you live in a different country, you should contact the Swedish Pensions Agency for advice on accessing your pension, which is done by filling out a form (look for the form called Ansök om allmän pension – om du är bosatt utanför Sverige).

The agency recommends beginning the application process at least three months before you plan to take the pension, and ideally six months beforehand if you live abroad. It’s possible to have the pension paid into either a Swedish bank account or an account outside Sweden.

A guarantee pension – for those who live on a low income or no income while in Sweden – can be paid to those living in Sweden, an EU/EEA country, Switzerland or, in some cases, Canada. This is the only Swedish pension which is affected by how long you’ve lived in Sweden – you can only receive it if you’ve lived in the country for at least three years before the age of 65.

“The guarantee pension is residence based,” Andersson said. “But it’s lower if you haven’t lived in Sweden for at least 40 years. You are eligible for it after living in Sweden for only three years, but it won’t be that much.”

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