Iron Ore Train Derailing May Cost LKAB up to SEK 100 Million
38 carriages of the LKAB iron ore train derailed in Northern Sweden Sunday morning. If the railway shutdown lasts for long, it may cost the mining company up to SEK 3 million per hour.
38 out of 68 carriages from the LKAB iron ore train derailed near Gällivare in Northern Sweden Sunday morning. The incident took place along the railway line towards Kiruna and the goods were on way to Narvik, Norway.
The iron ore railway is some 50 kilometers long and connects the LKAB mines in Kiruna and Malmberget with the ports of Narvik, Norway and Luleå, Sweden. The derailing took place some three kilometers from the nearest road and the railway line is expected to be shut for days on end. The train driver is said to have escaped the incident without injuries.
Communications Manager Tina Benson of LKAB says to High North News that the derailing may cost the mining company in the range of SEK 50-100 million, depending on how long the trains will have to be stopped between Kiruna and Gällivare, and depending on what investigations will show.
“If the halt is to be long-lasting, this may affect our customers if we are unable to deliver as agreed. We have estimated that it may cost us up to SEK 3 million per hour. However, we do not yet know if this will happen. For now, we are not sure how long the halt will last and of course we also have products in store”, Benson says.
May transport to Narvik
She adds that the company will also have to expect an economic drop when it comes to the 38 train carriages. It is not yet clear whether the carriages can be repaired or if they have to be fully replaced.
Benson says LKAB still has the opportunity to transport products from its Kiruna mine to Narvik, and from its Gällivare mine to the port of Luleå.
Swedish broadcaster SVT writes that the mining company tries to compensate for ore that should have been shipped from Gällivare via Narvik through increasing production in its Kiruna mine.
Want dual tracks
“This is the most used railway line in all of Sweden, and our only way through which to supply our customers”, says Logistics Manager and CEO of LKAB Iron Ore Traffic Jan Lundgren in a press statement.
“We have stressed for years that there is a need to expand the iron ore railway line to a dual track line. In part, that has to do with increasing capacity so that it matches our planned production increase, however, it also has to do with reducing sensitivity to disturbances”, he adds.
The State Incident Investigation Commission is currently on site. Investigation of the causes for the derailing outside Gällivare will decide whether LKAB or the Swedish Traffic Office has to pick up the tap for the material damages, according to SVT.
This article was originally published in Norwegian and has been translated by HNN's Elisabeth Bergquist.