Relocated Arctic Town: LKAB Gets Green Light to Acquire Land for Continued Transformation 

The Swedish government has given mining company LKAB green light to purchase land from the state to continue the extensive urban transformation in Kiruna.

The decision means that the Swedish state-owned mining company will acquire an area of 275 hectares for community development purposes in Kiruna, Sweden's northernmost city. This corresponds to around 385 soccer fields.

The exception is a limited section that the Swedish Transport Administration wants to retain as railway property.

"We welcome the government’s decision. The most important thing is that Kiruna now gains access to the site that both LKAB and the Municipality of Kiruna have identified as necessary for the continued community transformation."

This is stated by Kiruna's Mayor Mats Taaveniku and Stefan Hämäläinen, LKAB’s Senior Vice President Community Development, in a joint statement. 

"This provides better conditions for new housing, businesses and community services. We can now take the next step together in the work on Kiruna’s continued development," they add. 

Large-scale relocation

The Arctic town of Kiruna is in the process of being relocated as mining operations have caused cracks and unstable ground under the city. A large-scale relocation and associated urban transformation of parts of the town are therefore under way in order to secure LKAB’s continued mining operations.

The relocation of the town has been under way for a long time, and Kiruna's new city centre was officially opened in 2022.

As HNN has previously reported, LKAB announced in August 2025 that mining operations are affecting the ground more than expected, and that a significantly larger area will fall within the affected zone. 

In the wake of this, LKAB and the municipality requested substantial financial support from the state, as well as the release of a larger area to enable mining operations to continue.

The Swedish government's recent decision means that the areas identified by both LKAB and Kiruna Municipality as important to Kiruna's continued development will now be available. This is described as an important prerequisite for new housing, business activity and community services for Kiruna's residents.

Agreement between company and municipality

"Kiruna is undergoing a historic societal transformation. Around 12,000 people and 6,000 homes are affected. It is therefore important to move forward with the matter and create favourable conditions for continued mining operations in Kiruna," says Minister for Rural Affairs Peter Kullgren in connection with the announcement of the land acquisition. 

LKAB and the municipality of Kiruna reached a historic agreement earlier this year, under which the mining company assumes full financial and practical responsibility for enabling and carrying out the urban transformation, while implementation takes place in close cooperation with the municipality. 

Will not remain owned by LKAB

"Since the agreement in June, LKAB and the municipality of Kiruna have been working on a joint way forward for the community transformation. With the land decision in place, the conditions are now in place to take the next step together," the municipality and mining company state in a press release. 

It also clarifies that the site is being acquired to develop Kiruna, not to remain in LKAB's ownership in the long term.

"LKAB owns the site during the development phase and therefore also assumes the financial responsibility and risk for the development. Once the areas have been developed, the site is transferred back to the municipality of Kiruna. In other words, the site is for Kiruna and the people of Kiruna," it states.