Moving Kiruna: what does it take to relocate a city? – by Rhys Thomas (World Finance – April 9, 2014)

http://www.worldfinance.com/

The irresistible call of the world’s biggest [underground] deposit of iron ore is forcing the Swedish city of Kiruna to move two miles east, signalling a new beginning for its citizens. But can this groundbreaking project succeed with so much at stake?

As the northernmost city in Sweden, Kiruna is used to seemingly endless winters, short, cold summers, and relative isolation in the vast expanse of Swedish Lapland. Its population, just shy of 20,000, has learned to expect adverse weather and the long dark night that descends on the city between December and January – all things that are part and parcel of living some 90 miles above the Arctic Circle. They could not have expected the gravity of the newest challenge that the city faces – a problem that simply must be overcome, before it swallows it whole.

When state-owned Luossavaara-Kiirunavaara Aktiebolag (LKAB) – one of Sweden’s biggest mining companies – told the residents of Kiruna it needed to dig deeper into the mountain near the city to extract more iron ore, some eyebrows might have been raised. Veterans of the city would remember that in the 1970s rampant expansion forced the city’s Ön district to be vacated and the residents moved elsewhere.

What they probably didn’t realise was the scale of what would have to happen this time. LKAB didn’t want one district to be vacated. They wanted at least a third of the city moved to a different site – every house, hospital, school and shop in the chosen areas – and every citizen affected would have to relocate with it.

Already the effects of the digging can be felt around Kiruna. Cracks and fissures tiptoe closer to the city every month, threatening apartments and homes. The townspeople simply cannot afford to stay put any longer, that much is certain, but the alternative seems an impossible and costly task.

The call of the earth

LKAB’s mine at Kiruna is the largest iron mine in the world, extracting 75,000 tonnes of iron ore every day, and the prospect of even richer veins made digging deeper an easy decision for the company. LKAB believe that the orebody stretches below much of the existing city and is more than 2000 metres deep and four kilometres in length – the largest known continuous body of iron ore in the world – and enough to ensure mining operations will continue in Kiruna until at least 2035.

There is some irony in the situation: the very vein that brought Kiruna to life is now threatening to destroy it, unless the relocation plan succeeds. This sort of situation is not entirely new for the company – on a much smaller scale LKAB have been moving residents away from their mining operations in the nearby town of Malmberget, literally “The Ore Mountain”, for the best part of 60 years. The relocation of Kiruna, however, is a much greater test for the company.

The current population are desperate for stability – both above ground and under it. Moving all the residents to new houses will be a big endeavour. Where LKAB can they will try to move the properties themselves to a new lot, but otherwise the company’s normal policy is to compensate by purchasing the house for the market price plus an additional payment for a variety of factors, including the value of the ore beneath the land. The exact nature of the compensation package is extremely fluid and depends on a variety of factors, including property value and market movements.

For the rest of this article, click here: http://www.worldfinance.com/infrastructure-investment/project-finance/moving-kiruna-what-does-it-take-to-relocate-a-city