Swedish iron ore miner LKAB is implementing a series of cost-cutting measures to save SEK800 million from the first quarter of 2017, company spokesman Anders Lindberg told S&P Global Platts late Thursday.
"Declining demand for steel in the world, combined with increased supply of iron ore products, has led to sharply lower prices for LKAB's products," he said.
As part of the efficiency drive LKAB will cut consultants, contractors and internal staff, Grete Solvang Stoltz, director of human resources and sustainability, said.
Around 200 positions will be affected in total, with 95 staff being made redundant.
Despite the reductions, LKAB is looking to increase production volumes, Markus Petajaniemi, senior vice president of sales and logistics, said.
"As you know, 2015 was a poor year ... in production we lost pellet volume due to [the] lack of crude ore from the Kiruna mine," he said.
"On top of that, we had to change the riding ring for the biggest pellet plant in Kiruna."
This year has started much stronger, however, and the company is in line with its plans for production and deliveries.
Annualizing the current run rate, Petajaniemi said LKAB will increase production by 3 million mt from last year, reaching a minimum 27 million mt of finished high-grade products.
"The bottle-neck will soon move from mines [crude ore] to pelletizing again," he said.
The company is not currently producing lower grade fines from its Svappavaara mines, given the weak market environment, which means its new mines are not running at full capacity.
