2ND WORLD DRI & PELLET CONGRESS April, Abu Dhabi Stig Nordlund, Vice President Marketing, LKAB

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1 2ND WORLD DRI & PELLET CONGRESS April, Abu Dhabi Stig Nordlund, Vice President Marketing, LKAB

2 Luossavaara-Kiirunavaara Aktie Bolag Jumeirah Lake Towers Branch Platinum Tower!

3 More than hundred twenty years of experience.. SERVING THE STEEL INDUSTRY

4 LKAB GROUP 100% Swedish state-owned company 90% of the EU s iron ore production Deliveries 2013; 25,5 Mt where of pellets 21,1 Mt Among the top five pellets producers in the world (by capacity) Approx. 40% of EU s annual pellet consumption More than 120 years of operation and more than 50 years of pelletizing About employees 4

5 IRON ORE OPERATIONS Harbour ARCTIC CIRCLE Mine and Procssing Kiruna Malmberget Mine and Mine and Procssing Narvik 169 km 204 km Luleå Svappavaara Mine and Procssing Harbour & Headoffice RUSSIA NORWAY SWEDEN FINLAND PERFORMANCE IN IRONMAKING

6 MAJOR INVESTMENTS THE LAST DECADE Total: more than 4 billion Euro New concentrating and pelletizing plants Logistics: locomotives, ore cars and loading/discharging terminals New storage facilities in Narvik New main haulage levels: Kiruna KUJ 1365, Malmberget M1250 New open-pit mines: Gruvberget, Mertainen, and Leveäniemi 6

7 Mertainen Start planned in 2015 Gruvberget Leveäniemi Start planned in 2015 THE SVAPPAVAARA FIELD - EUROPE S BIGGEST IRON ORE PROJECT 7

8 NARVIK HARBOUR

9 STATE OF THE ART OPERATIONS High technology mining Clean technology for pelletizing plants Effective and environmentally friendly logistics World-leading R&D in pelletizing and ironmaking 9

10 MAIN PRODUCTS Blast Furnace Pellets Direct Reduction Pellets High grade Sinter Fines Blast furnace pellets (BF) for manufacturing with coal Direct reduction pellets (DR) for manufacturing with natural gas 10

11 SALES BY PRODUCT CATEGORY Special 2% Fines 14% Pellets DR 21% Pellets BF 63% Blast furnace pellets (BF) for manufacturing with coal Direct reduction pellets (DR) for manufacturing with natural gas 11

12 TRENDS IRON ORE MARKET Trend 12 Description Consequence Generally falling ore qualities Increased supply of iron ore with lower-, and greater variations in quality require increased blending of different orequalities. Increased environmental footprint and lower capacity in a sinter plant. Increased demand for high-grade iron ore products, as it creates flexibility in the steel plants raw material mix. Stricter environmental requirements increase demand for high-quality To cut emissions, an energy efficient steel production is required, consequently the use of iron ore pellet and lump is increasing. Higher pellet- and lump premiums. There is a shortage of high quality iron ore 12

13 TRENDS IRON ORE MARKET - CONSEQUENCES Decreasing Fe-grades force iron ore/steel producers to beneficiate the ore more to reach higher Fe-grades. This will lead to finer material, such as concentrate/ pellet feed. Stricter environmental issues, mainly in China, pushes for increased demand of high quality iron ore and direct charge material (lump and pellet) Environmentally friendly processes gets advantages. The pellet- and lump-premiums are expected to stay strong. The price difference between high- and low quality iron ore will increase. 13

14 DIRECT REDUCTION GAS BASED Region MENA Increased steel consumption driven by strong GDP-growth and infrastructure projects. Gas-based steel production. Environmentally friendly Low emissions Increased demand for DRpellet U.S. Shortage of high-grade scrap Shale gas low/falling gas-prices Environmentally friendly Low emissions Increased demand for DR-pellet HBI production from BF-pellet can be used as a feed for a BF

15 SHALE GAS TOP RESERVE HOLDERS 2012 (TRILLION CUBIC METERS) Canada 11 24,4 U.S. Poland 5,3 36,1 China Mexico 19,3 Algeria 6,5 8,2 Libya Brazil 6,4 21,9 Argentina 13,7 South Africa 11,2 Australia 15 Source: EIA

16 THE CORE OF LKAB WHAT MAKES US UNIQUE - Long term customer relations - World class magnetite reserves - Knowledge based on experience more than 120 years experience of mining more than 50 years of experience of pelletizing 16