Stable Deliveries and Reduced Costs

The operating profit was MSEK 273 (-6,951), with impairment losses of MSEK
-7,136 on property, plant and equipment having been charged to earnings in the
third quarter of 2015. The underlying operating profit(1) for the quarter was
MSEK 762 (798).
“LKAB´s third quarter saw stable production, increased delivery volumes and
positive cash flow. Continued efficiency improvements and cost savings have had
an effect, primarily as a result of measures to improve productivity in daily
operations and more efficient capacity utilization,” says Jan Moström, President
and CEO.

LKAB’s delivery volumes increased by 16 percent compared with the same period
the previous year. At the same time the average spot price(2) for the quarter
increased to USD 59 (55)/tonne.

The positive impact of higher delivery volumes and a higher iron ore price
remains countered by the results of hedging activities. The hedges were entered
into at the lower iron ore prices that prevailed during the fourth quarter of
2015 and the first quarter of 2016. Hedging was carried out in order to
alleviate the effects of changes in prices and exchange rates in the market.
This meant that LKAB was not able to take full advantage of the price increase
during the year.

“To sum up the year’s third quarter, business was better than in the same period
last year. The focus on maximizing pellet production remains and demand for
LKAB’s processed iron ore products is strong. The price of processed iron ore
products developed well compared to the market situation earlier in the year”,
says Jan Moström.

All mining operations require the use of land, and LKAB’s commitment to and
responsibility for urban transformation in the mining communities remains
unchanged.

“LKAB will strengthen its long-term competitiveness through increased
production, a focus on costs and the efficient use of the investments made in
LKAB, and will do this in partnership with the communities where we operate. The
goal is mining operations that are financially, socially and environmentally
sustainable in the long term,” says Jan Moström.

JULY-SEPTEMBER
• Net sales totalled MSEK 4,258 (4,203)
• Underlying operating profit(1) was MSEK 762 (798)
• Operating profit/loss was MSEK  273 (-6,951)
• Costs for urban transformation provisions totalled MSEK -489 (-613)
• Profit/loss for the period was MSEK 509 (-5,641)
• Operating cash flow was MSEK 235 (-417)
• Deliveries of iron ore totalled 7.2 (6.2) Mt

JANUARY – SEPTEMBER
• Net sales totalled MSEK 11,826 (11,948)
• Underlying operating profit(1) was MSEK 1,095 (1,420)
• Operating profit/loss was MSEK 167 (-6,805)
• Costs for urban transformation provisions totalled MSEK -928 (-1,088)
• Profit for the period was MSEK 628 (-5,451)
• Operating cash flow was MSEK -2,366 (-1,612)
• Deliveries of iron ore totalled 20.1 (17.4) Mt

(1): Underlying operating profit is defined as operating profit excluding costs
for urban transformation provisions and impairment of property, plant and
equipment.
(2): Platts IODE X 62% Fe CFR North China
Contact: Bo Krogvig, Senior Vice President of Communications at LKAB, Tel: +46
(0)8 429 34 45. E-mail:bo.krogvig@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 16 billion in 2015 and employs about 4,500 people in 13 countries.
Other group business include industrial minerals, drilling systems, rail
transport, rockwork services and property management.