Swedish-based iron ore producer LKAB has announced that it has mothballed its Mertainen open-pit mine outside Svappavaara, Sweden, resulting in a SEK 1.2 billion ($131.38 million) asset writedown, which will impact earnings for the fourth quarter. The company stated that the prevailing situation in the market means that the mine will remain mothballed until circumstances change.
According to LKAB’s CEO Jan Moström, the market has changed in recent years and the products from Mertainen cannot be made profitable at the moment. As a result, the company will focus on the Leveäniemi and Gruvberget open-pit mines in Svappavaara and leaving Mertainen dormant until market conditions improve.
LKAB also stated that it is maintaining its strategy to maximize pellet production adding that demand for processed iron ore products is strong. Prices for the processed products have also developed positively during the year.