Competition between steel producers becomes political issue

The private company H2 Green Steel believes it is being opposed by the state actors LKAB, Vattenfall and SSAB. The latter is not a state-owned company, but state-owned LKAB is the largest owner of SSAB. 

LKAB has long supplied iron ore to SSAB, but does not want to sell iron ore to H2 Green Steel. LKAB believes that the capacity of the Malmbanan is not sufficient for more trains between Malmfälten and Boden. H2 Green Steel is now exploring the possibility of buying ore from Brazil or Canada instead. Which many think is an absurd situation.

Now politicians and opinion leaders are starting to react, according to the newspaper Dagens Industri. Within the government block, demands are being made for Finance Minister Elisabeth Svantesson (M) to call a meeting with LKAB's board of directors with chairman Göran Persson, former prime minister in a previous social democratic government. The demand has been put forward by Camilla Brodin, a Christian Democrat on the business committee, and Elisabeth Thand Ringqvist, business policy spokesperson for the Center Party.

Minister of Finance Elisabeth Svantesson has replied that she has no plans to summon the board of LKAB. As a representative of the owner, she has had a dialog with the chairman of the board. She says to Dagens Industri that she neither can nor should interfere in individual business decisions. But she shares the view that the railroad between the mines and the ports in the north, Malmbanan, must be upgraded. 

The governor of Norrbotten, Lotta Finstorp, has criticized LKAB for booking railway departures that are then not used, so-called "ghost trains". In 2022, 8,269 of 19,524 booked departures were canceled, about 40 percent. LKAB replies that the company must have a margin for disruptions.

The same issue of disadvantage exists with regard to the supply of electric power.  H2 Green Steel has electricity contracts with the state energy companies in Norway and Finland, Statkraft and Fortum, but not with Vattenfall in Sweden.

Critics argue that there is a risk that the state actors could distort competition by allowing LKAB to supply iron ore and Vattenfall to supply electricity to SSAB and Hybrit on non-market terms. This would disadvantage H2 Green Steel and distort competition.

Lennart Håkansson

editor@northswedenbusiness.com