The National Audit Office's report on LKAB's transition

Isak From (S)

Mr. Speaker! Now we come to the interesting area which is the government's communication 2025/26:8, the National Audit Office's report on LKAB's transition. It is not a very thick product, but it is, however, quite important.

LKAB is a star in the state company portfolio. The National Audit Office notes that the owner's role in the transition has been limited because no ownership coordination had been carried out at the time of the audit. The National Audit Office also assesses that no signs have emerged of any political steering of the company – whether social democratic or anything else that has been discussed in the previous debate – in order for the company to be able to drive the transition forward.

Mr. Speaker! The audit is narrow and focuses primarily on the investment conditions and the business viability of creating a facility for the production of iron sponge. The Swedish National Audit Office has audited whether the government and LKAB have acted in a business-oriented manner in the planning of the transition of LKAB's operations to the production of iron sponge.

The National Audit Office highlights several points of concern affecting the company. The authority also concludes that there are no routines at the Government Offices for how profitability targets should be implemented in practice to ensure market competitiveness. Against that background, the National Audit Office recommends that the government ensures that the decided profitability target is applied consistently.

Mr. Speaker! Following the previous debate, we can also observe that when it comes to the state-owned companies, the government as the owner has left it to the companies themselves to develop their operational goals and establish their profitability goals. One can then wonder how that is actually going to work.

Mr. Speaker! LKAB cannot influence the greatest prerequisites for LKAB's transition. One can certainly influence and point out one's situation. But it is clear that when LKAB has now made the decision to postpone the production of fossil-free iron sponge, it also implies poorer conditions to reach both profitability goals and climate neutrality.

Some things that affect the company's opportunities are, by their nature, such things as the state handles in a different way. The prerequisites for producing iron sponge mean that a new 400 kilovolt high-voltage line to Malmfälten needs to be built. It is Svenska kraftnät, with the state as the owner, that is to ensure that this happens. It is absolutely necessary that double tracks are built on the Malmbanan. It is absolutely necessary that the urban redevelopment can be carried out and that the land exchange program can be carried out so that Kiruna municipality and the company get access to buildable land. It is absolutely crucial for the company that the permit processes for the extraction of the new deposit, Per Geijer-malmen, get started.

All of this has an impact. Naturally, the company is also affected by trade policy, potential steel tariffs and so on. At the same time, the EU's emissions trading system also has an impact – a higher cost will be imposed on the company if it cannot transition quickly and resource-efficiently. That, Mr. Speaker, can cause great damage to the owners: the state and, in the long run, the Swedish people. It can damage Sweden's preparedness and the supply of iron, fossil-free iron sponge, and strategic rare earth metals.

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Katarina Luhr (MP)

Mr. Speaker! It is getting late in the evening, and I do not intend to make any further statements regarding the management of LKAB, not least considering that we have already concluded a debate which, among other things, concerns precisely the same issue. In many respects, I agree with the National Audit Office's report and the government's response to it. But it is still very important to once again emphasize the importance of the fact that the companies owned by the state should be utilized to the full extent to solve our major societal challenges.

LKAB is one of the companies that year after year is on the list of the ten Swedish companies that emit the most carbon dioxide. LKAB is also one of the companies that has large and far-advanced plans to radically reduce Sweden's climate emissions. It is very important.

The Swedish National Audit Office emphasizes in its review of LKAB that the company has no mandate to specifically work towards Sweden reaching the climate goals, and the government has in its response not put forward any objections to that. I do not, however, share the Swedish National Audit Office's assessment that LKAB does not have a mandate to work towards Sweden reaching the climate goals.

In the state's ownership policy for state-owned companies, a policy that both the current government and previous governments have signed and which was, among other things, highlighted by the Christian Democrats in the previous debate, it states explicitly that a state-owned company shall be a role model within its industry in the field of environment and climate. State-owned companies shall also work to achieve the national environmental and climate goals that the Riksdag has decided upon as well as contribute to fulfilling the Paris Agreement, which aims to limit global warming by reducing greenhouse gas emissions. It says "shall". Against this background, we believe that LKAB has or should have a clear mandate to work towards Sweden reaching the climate goals.

But in this matter, it becomes clear that the state's ownership policy is more to be regarded as an optional advice to the state-owned companies, where the boards can then themselves make decisions on what they want to do and not do. I think that the matter underscores the importance of our state-owned companies, both LKAB and other companies with state ownership, not least those with a large and tangible impact on climate and environment, needing to be given specifically decided social mandates to work towards so that Sweden can reach national and international environmental and climate goals. These are tools that can really make a difference if they are steered in the right direction.

With climate-smart transport and buildings, carbon storage, and fossil-free production, several of our state-owned companies, not just LKAB, could become heavyweights in climate work. Our companies could become leaders in Europe's transition, but only if the government gives them clear mandates. I would therefore like to conclude by moving for approval of our reservation in the report.

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Eric Palmqvist (SD)

Mr. Speaker! Initially, I would like to vote in favor of the committee's proposal for a decision and reject the alternative reasoning.

In the autumn of 2007, a good friend of mine called and asked if I wanted to come to Gällivare and work. Even though I had a job and was actually about to take a new job in Denmark, I became curious and got into the car and drove the more than 170 miles up to Gällivare. Once there, we went down to what would become the new main level at a depth of 1,250 meters. The rest is, as they say, history.

Some of what we are debating here today has in one way or another an impact on the municipality where I and my family live and work. I would actually like to dwell more on the two social transformation processes taking place in Kiruna and Gällivare, as their consequences and impact on the local communities actually deserve greater political attention and debate than is currently the case. The investments and decisions regarding LKAB's transition to so-called iron mushroom production, which the National Audit Office has audited, presuppose that the operations in both locations are expanded and future-proofed.

In Kiruna and Gällivare, the people and the mines live in a kind of symbiosis. One knows that the mine gives and that the mine takes. If it doesn't rumble in the mountain and shake the house a few minutes after midnight, one thinks: No, tonight the blasters are having problems with the charges.

It must be kept in mind that without the goodwill of the local population and the municipalities, these future investments are not possible, because the human capital that one is completely dependent on would ultimately be lacking. That entire communities are being moved naturally gives rise to opportunities, but it also creates great challenges, not least regarding the depreciation costs for all new constructions that burden the municipal budget in both mining municipalities.

The social transformation – or the urban relocation – is therefore not something I have only read about or heard of. I live in it. It is a part of my everyday life. One must remember that neither Kiruna nor Malmberget is being moved because the citizens demand it. Both mining communities are being moved because the state-owned company demands it in order to ultimately deliver profit to the state.

Mr. Speaker, today it is the government's communication we are to debate, that is to say its response to the National Audit Office's audit report on LKAB's transition to the production of fossil-free so-called iron sponge. I shall try to stick to that communication henceforth.

In the government's communication, it is accounted for which measures have been taken or are intended to be taken in light of the National Audit Office's observations. A couple of the most central points are whether the transition rests on a business basis – whether it can be considered profitable, quite simply – and whether the ownership coordination stipulated by the state's then current ownership policy for companies with state ownership has been carried out in an adequate manner or not.

From the Sweden Democrats' side, we have in the previous statement expressed repeated strong criticism of what we have perceived as a lack of owner coordination. At the same time, we have questioned how the state-owned company has assessed the business viability of the project, not least viewed from a larger perspective, where the cost to society for creating the power production required for the project is taken into account. Without such investments, the project could not, in fact, ever be realized. The National Audit Office's review shows, however, that an owner dialogue has taken place but that it leaves some room for improvement in other respects regarding traceability and documentation.

It must be kept in mind that this does not concern some trivial matter. LKAB's transition to iron ore production has been described in the media as the largest industrial investment in Sweden in modern times, and there has been talk of investments of around 400 billion Swedish kronor. That an investment of that caliber therefore takes place with the owner's, the state's, good memory, and that the ownership dialogue preceding the decisions is traceable and well-documented – not in the form of vague notes – should therefore be reasonable requirements that are in line with what the general public actually expects.

From the Sverigedemokraterna's side, we presented, for example, early and clear criticism of the fact that the owner, that is the state, could not demand an ownership coordination in cases where it was perceived to be called for but the state-owned company did not voluntarily take the initiative for this. Our starting point has been that the owner should, in principle, have that right.

The government, however, was quite quick on the ball and began working on a new ownership policy which is decided and in effect. In that, the ownership dialogue has a clearer place, and it is a change we welcome. Our hope is that this will contribute to increasing transparency, not only in the case of LKAB but in all future major changes for all companies with state ownership.

Mr. Speaker! The Swedish National Audit Office also concluded that LKAB has made the decisions regarding its production transition primarily on commercial grounds. This is thus in line with the mandate the company has to be able to deliver profit to the shareholder, that is to say the state and, in the long run, the Swedish taxpayers.

The report states that there are question marks regarding how the profitability targets are calculated. The Government has therefore, in its new and now adopted ownership policy, changed and clarified the routines for such decisions that affect the companies' financial targets. This is something that LKAB has implemented following a decision at the company's annual general meeting in the spring of 2025.

The new ownership policy also prescribes that the owner shall be given the opportunity to take a position on proposals for new or revised economic goals for the company before the board of directors makes its decision. This shall furthermore occur together with the assumption that the assumptions underlying the owner's positions shall be clearly reported and documented.

Overall, it is changes that the Sverigedemokraterna welcome.

With this said, Mr. Speaker, it can also be mentioned that we experience that LKAB today communicates its plans for iron sponge production in a more nuanced way than before. From having sounded as if one were to convert the entire production, whatever the cost may be, and that this should happen as quickly as possible, one is today clearer that the investments shall be carried out in stages. One only proceeds to the next phase or scales up the production of the fossil-free iron sponge if it is profitable, which is an approach we have requested and welcome.

I truly have to hope that the investments are carried out in a well-thought-out manner that becomes profitable. This is not only in LKAB's interest. It is also important for my neighbors who work at my old workplace in the mine. It is important for my home municipality, for my constituency Norrbotten, and for Sweden. It is also important for all the significant value chains that follow Swedish iron and steel production and for strengthening Europe's self-sufficiency of important input materials.

With that said, I would like to thank for and agree with Member Kjell Jansson's description of LKAB in the debate on companies with state ownership, which preceded this debate.

The deliberation was hereby concluded.

(A decision was to be taken on 28 January.)

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