Costs in Focus as Price Pressure Continues in the Market

Low iron ore prices and fewer deliveries are putting pressure on LKAB´s
profitability. Meanwhile, effects to reduce costs are having a positive effect.
Operating profit for the second quarter totalled MSEK
-228 (-417).
The world´s major iron ore producers continue to increase their production
volume despite an oversupply of iron ore. Given the market situation, demand for
LKAB´s high-grade iron ore products remained stable and the pellet premium is in
line with last year, which favours LKAB with a pellet proportion of 84 (83)
percent for the quarter.

Deliveries totalled 5.3 (6.0) Mt. Beside the shortage of crude ore, deliveries
were affected by an extended maintenance stoppage in the Port of Narvik and
delays in deliveries to customers in the MENA region.

A comprehensive effort to cut costs is in progress and negotiations on
organisational changes were conducted during the quarter. Savings to date of the
previous announced MSEK 700 for 2015 total MSEK 380.

During the quarter, LKAB´s board of directors appointed Jan Moström as the new
President and CEO of LKAB. Mr. Moström will assume his duties on 15 August, one
month earlier than previously announced.

For comments, contact:

Lars Eric Aaro, President and CEO. Telephone: +46 920 381 06
Katarina Holmgren, Senior Vice President, Finance. Telephone: +46 920 381 58
Contact: Frank Hojem, LKAB´s Senior Vice President of Communication. Tel: 46 (0)
920 380 70. E-mail: frank.hojem@lkab.com
LKAB is an international high-tech minerals group that mines and upgrades the
unique iron ore of northern Sweden for the global steel market. Sustainability
is core to our business and our ambition is to be one of the industry’s most
innovative, resource-efficient and responsible companies. The group had sales of
more than SEK 20 billion in 2014 and employs about 4,500 people in 15 countries.
Other group business include industrial minerals, drilling systems, rail
transport, rockwork services and property management.