FAQ about the challenging market situation
The challenging market situation is the result of several factors, many of which are largely beyond our control but have a significant impact on our operations.
Iron ore prices have dropped sharply during the year, while freight costs have risen significantly. It is primarily the weak development in China that is putting pressure on the entire iron ore and steel industry. The halt on the ore railway during the first quarter has also had both direct and indirect effects.
In addition to all of this, we have major, mandatory investments in 2024 and 2025 due to our new permit, which we utilized in December 2023. As a consequence of the situation, Kaunis Iron must take responsibility and implement what we can control to ensure long-term and competitive mining operations in Tornedalen.
Here, we have compiled some answers to the most common questions on the subject.
How many will lose their jobs?
It is too early to say. We need a few weeks to assess this. We will review the entire organization and consider staff reductions in all areas that are not directly critical to being able to continue production based on the production plan we have. At this point, we must do everything we can to reduce our costs to ensure our long-term sustainability.
Will the suppliers be affected?
We are not currently making any operational reductions in our production. The production plan remains in place. Suppliers and parts of our own organization that contribute to daily production are therefore not the focus. Other suppliers providing external services that are not as critical to production will be reviewed.
Does this affect the long-term strategy?
Our long-term strategy remains, but we are shifting focus in the short term. What we are doing now is about ensuring our competitiveness in a tough market, which is a prerequisite for us to be able to realize our strategy. Focusing on significant cost savings, as we are doing now, is about being responsible and safeguarding jobs, employment, and long-term sustainability in the region.
Will the planned open pit Sahavaara be opened?
We have not abandoned our long-term strategy to build a mining industry for generations where Sahavaara and Palotieva are included. What we are doing now may, of course, mean that the timeline is somewhat delayed. To be able to decide on a relevant and realistic timeline, we also need a legally binding decision, which we do not yet have. However, we look forward to the upcoming main hearing in week 45, which will hopefully bring us a step closer to that goal.
