Swedish city is moving as Europe ramps up its minerals push
LKAB facility in Kiruna, Sweden. The company announced on January 12 that it had found Europe’s largest known deposit of rare earth elements here.
Jonas Ekstromer | Afp | Getty Images
The ripple effects of Europe’s growing appetite for raw materials extend to the far north of Sweden.
Thousands of residents and buildings are being displaced in the city of Kiruna, located 145 kilometers (90 miles) north of the Arctic Circle. The moving project is added One of the most radical urban transformations in the world.
Kiruna is physically on the move due to the ground collapsing due to the expansion of a sprawling underground iron ore mine. A new house is being built was created It is about 3 kilometers east of the old city, part of a decades-long process expected to be completed by 2035.
“This is a place that might seem exotic to a lot of people, and in a way it is, I guess, but it’s also a small town like many others, struggling with the same things that being dependent on a single company struggles and struggles with,” Jennie Sjöholm, a senior lecturer at the University of Gothenburg in Sweden, told CNBC via video call.
Founded 125 years ago as a city for the iron ore mining operations of the state-owned company LKAB, Kiruna is a small community that serves as both a city and a port. Europe’s major space center and home world’s largest underground iron ore mine.
Every resident in Kiruna knows that sooner or later we will have to move out of our homes because we are dependent on the mining industry.
Mats Taaveniku
Mayor of the municipal council in Kiruna
LKAB is a small but extremely important regional player globally. accounting 80% of all iron ore mined in the European Union.
In addition to its iron ore operations, which are an integral part of the steelmaking process, LKAB has recently identified one of Europe’s largest known rare earth deposits, further strengthening its position in the extraction of materials required for the green transition.
moving a city
There are many obstacles to successful relocation of Kiruna; Actors across the spectrum are voicing political, economic and environmental concerns. In fact, both the municipality and LKAB requested more financial support from the state, as well as the release of more land to accommodate the transformation.
There are others too flagged concerns about the relationship between resource extraction and social sustainability, especially potential impact about the indigenous Sami reindeer herd and culture.
In this aerial view, Kiruna Kyrka church is moved by road to its new location in Kiruna, Sweden, on August 20, 2025. The church, which weighs 672.4 tonnes, is being moved as a whole to a new location 3 km away to avoid damage to LKAB’s iron ore mine.
Bernd Lauter | Getty Images News | Getty Images
First planned in 2004, the city’s move gained international attention in August 2025. amazing move The iconic Kiruna Church. In a marvel of engineering, the 113-year-old wooden building was completely transported with special trailers within a two-day period.
However, around the same time, LKAB also announced The expansion of the iron ore mine will require the relocation of an additional 6,000 people and 2,700 homes. The mining company responsible for the move estimated The cost of compensation over the next 10 years will be SEK 22.5 billion ($2.4 billion).
Niklas Johansson, LKAB’s senior vice president of public relations and external affairs, told CNBC that those asked to move were offered an additional 25% of the market value of their property, plus an additional 25% or the construction of a new home. About 90 percent of people choose to buy a new home, Johansson said.
“The problem at the moment is that the local council has very little land. [or] They can make it administratively constructible,” Johansson said.
“They had to buy land from the state, which owns most of the land above the Arctic Circle. And here you have conflicts with reindeer herds, conflicts with defense, conflicts with nature, etc.,” he added.
‘We live with mines’
Mats Taaveniku, the mayor of the city council in Kiruna, described the relocation of the city as a “huge project” that could offer great opportunities to European citizens in the coming decades.
He added that a successful outcome was partly due to greater financial and political support from the Swedish government and the European Union.
“There is what we can call a big fight between the municipality and LKAB, and the municipality and our own government,” Taaveniku told CNBC via video call.
“The EU needs to take steps to support us. It is not enough to decide that we have critical and strategic mines. Of course, they need to support us with political statements and money.”
CNBC contacted spokespeople for the Swedish government and the European Commission, the EU’s executive arm.
A foundry worker processes molten metal at the Betsaide factory in Elorrio, which mainly serves the automotive industry, on May 26, 2025.
Ander Gillenea | Afp | Getty Images
EU for its part known LKAB’s new rare earth deposits are of strategic importance under the Critical Raw Materials Act, which aims for domestic production to meet 40% of the region’s annual demand by 2030.
Asked how Kiruna residents reacted to the relocation effort, Taaveniku said: “Some of the citizens are sad because they will lose a lot of memories. They grew up in one house for two or three generations, so it’s sad.”
“But on the other hand, everyone knows that we live on mines,” he said. “Kiruna was built on minerals, so every resident of Kiruna knows that sooner or later we have to move out of our homes because we are dependent on this mining industry.”
Outside in the cold?
One concern for those on the move is that Kiruna’s new city can be up to 10 degrees Celsius colder in winter.
A. to work Research by the University of Gothenburg found that Kiruna’s new city center is laid out in a grid pattern with tall buildings and narrow streets in an area where cold air collects, meaning that for many months of the year the setting sun is likely to have difficulty reaching the ground.
A worker is seen in the underground tunnels of the LKAB iron ore mine in Kiruna, northern Sweden, on August 21, 2025.
Jonathan Nackstrand | Afp | Getty Images
“Kiruna is a winter city. It’s a cold Arctic city. Winters are long and the snow season is long. It’s rarely -35 degrees. [degrees Celsius] “But in the middle of winter it can be this cold for a while, and there’s a huge difference between -15 and -25, which is not unusual.”
“If there is a long winter and cold, people’s comfort decreases, but things become more fragile, so to speak.”
