LKAB´s Work with Compensation of Natural Resources for the Mertainen Site

Background and localization

LKAB is a high-tech supplier of iron ore pellets to the global steelmaking industry and a growing supplier of industrial minerals for other sectors. The business is built upon the unique magnetite ore, mined in the north of Sweden. Since the beginning of the 1900s, primarily three mining sites have dominated LKAB´s iron ore supply. In the year of 2014 however, LKAB received an environmental permit to start mining in a new additional open pit mining site called Mertainen.

Figure 1. The map shows the location of the mining site in the north of Sweden. 

The picture with the mine marked with a red arrow demonstrate the environments to be compensated.

Impacted area

The Mertainen mine will affect approximately 1 220 hectares of land. About 460 hectares of this have been categorized as direct impact zones – areas that will be logged and landfilled. 230 hectares is categorized as medium impact zones and 410 hectares as low impact zones. Both medium and low impact areas are, in various degrees, indirectly affected by mostly noise and dust from ongoing activity.

Several biodiversity surveys were initially conducted in the area. Based on the results, three different biodiversity condition classes and four habitat types were identified and mapped (figure 2).

Figure 2. Map of condition classes and habitat types at the mining site. Darker shaded areas correspond to direct impact zones, non-shaded areas correspond to medium and low impact zones. 

The compensation

To compensate for loss of biodiversity, LKAB developed a compensation plan for offsetting residual values in accordance with the mitigation hierarchy. The plan was consistent both with the conditions of the permit and LKAB´s land-use guidelines and was based on the Business and Biodiversity Offsets Programme (BBOP) guidelines. The Mertainen project was also used as a case in a VINNOVA-funded pilot project with Sveaskog, LKAB, and Enetjärn Nature AB to develop a methodology for calculating losses and gains. The project also investigated how new methods can stimulate the application of ecological compensation and develop into business for landowners. The project included a broad referent group with universities, companies, industry associations, and state representatives and received technical support from Forest Trends.

The chosen offset area, called Kuosajänkkä, is located north of Mertainen. It is located next to the  mining site and therefore exhibits similar ecosystems and species diversity.

Figure 3 . Map of condition classes and habitat types at the compensation site. Map displays the closeness between the compensation area and the mining site. 

In the court hearing during the permit process, LKAB guaranteed that a minimum of 1200 hectares of highest or high natural value (condition class 1 and 2) would be included in the compensation program. In order to live up to the no net loss ambition stated in the company’s land-use guidelines, and based on the methodology that the company developed during the project (see part -The quantification model), LKAB is today working with an offset area of approximately 2000 ha.

Conservation measures

The number of conservation measures that can improve the habitat condition and species richness in these types of forest habitats in northern Sweden are limited. Besides free development, LKAB has defined four different management measures.

  1. Increasing the amount of dead wood in about 60 hectares of woodland. Dead wood is often scarce in human impacted areas due to selective cutting. The measure aims to improve the amount of available substrates for plant and animal species. The trees have been collected primarily from Mertainen with the hope of also moving species into the compensation area.
  2. Mire haymaking is an example of historical land use practices that used to be a common part of living-conditions in the northern parts of Sweden. The measure could improve species diversity in selected wetlands in Kuosajänkkä, and LKAB will follow up how species diversity is affected.
  3. To restore natural water flows and improve wetland conditions affected by human activity, wetland restoration will be made by filling ditches and tramlines with peat and moss.
  4. Fires - just as dead wood - are a rare commodity in today's forestry, and through nature conservational burning (controlled burning), fire dependent plants and insects will be favoured.

The quantification model

The model chosen to best quantify the biodiversity values for this project was the Habitat-Hectares method. ‘Habitat hectares’ are a unit of measurement that takes into account both the area affected and the quality and condition of the biodiversity in said areas.

The quality is determined by the quantities of selected benchmark attributes, that in a representative way, reflect overall biodiversity which will be lost or gained. 

Figure 4. Picture of Dead wood to be moved from the Mertainen mining site to the compensation area.

In forest habitats these were:

  • Biodiverse trees
  • Dead wood
  • Continuity
  • Number of red-listed fungi
  • Number of red-listed lichen

In wetland habitats these were: 

  • Wetland heterogenity
  • Wetland structures
  • Rich wetland-indicators
    • mosses
    • vascular plants
  • Number of redlisted species
  • Mineral wealth
  • Human impact

To ensures a reference point against which losses and gains can be quantified and compared consistently and transparently, a baseline/reference dataset was collected.  A number of reference sites, so called benchmark sites, were inventoried to gather data for the “best/highest possible condition” for each benchmark attribute.

The different habitat types in Mertainen and Kuosajänkkä were then plotted against the benchmark, and habitat-hectares for both areas were calculated. Separate calculations were made for each habitat type and condition-class. Also the amount of impact was weighed in.

The gains were estimated by comparing two scenarios for the compensation area: one with and one without compensatory measures for a time period of 50 years. The calculations include factors of uncertainty to take height for unpredictable events and uncertainty parameters.

The results from the calculations show a balance between losses and gains. For Mertainen a total of ca 450 ‘habitat-hectares’ were lost, and in Kuosajänkkä a total of ca 480 ‘habitat-hectares’ were gained, thus leaving the area with net gain.

A follow-up program has been designed to monitor the results from the conservation measures, which will give feedback to the preliminary expert estimations that were used in the model.


Stina Ericsson