Grängesberg Iron AB – Grängesberg Iron Mine


The Grängesberg project is a substantial iron ore asset of over 80Mt of magnetite/haematite located in a very favourable jurisdiction. During the 1980s the mine, located about 200 kilometres north-west of Stockholm, had produced around 180Mt of iron ore and current plans envisage the production of high grade ore at or above 70% Fe.  The group holds a direct 49.75% interest in the Grängesberg project, together with management rights and a right of first refusal to increase its interest to 50.25%.


Anglesey, in conjunction with its Swedish partners in Grängesberg, commissioned an updated PFS on the development of the project, based on updated forecasts for long term iron prices and on a modified development programme to take advantage of optimisations expected since the previous 2012 Pre-Feasibility Study. The update by leading mining consultant Micon International Limited commenced in late 2021 and was finalised in July 2022.


The updated PFS demonstrates a very robust project with production of 2.3 – 2.5Mtpa of iron ore concentrate grading 70% Fe over an initial 16-year life, generating strong economic returns, including a NPV8% of US$688 million post-tax. The study assumed an iron ore price of US$120/t (62% Fe benchmark, CFR China) with sensitivities indicating a long-term price of US$80/t required to achieve a positive return at a discount rate of 8%.


Grängesberg PFS Study Highlights


The study confirmed the previous estimate of 82.4Mtpa of Probable Ore Reserves which would support a 16-year mine life at a throughput of 5.3Mtpa. Production of between 2.3 and 2.5Mtpa of iron ore was envisaged with concentrate grading 70% Fe generating strong economic returns including:

  • Post-tax NPV of US$688 million at an 8% discount rate
  • IRR of 25.9% post-tax
  • Operating costs of US$53.60/t FOB to the port of Oxelösund
  • Net cashflow post-tax of US$2.08bn, for an average annual net cashflow of US$130 million
  • Pre-production capital of US$399 million
  • 3.6 years payback


Micon concluded that the Grängesberg Project demonstrates an economically viable project using the stated price assumptions, cost estimates and technical parameters generated by the PFS, with the sensitivity analysis indicating positive returns can be achieved even with using a 30% lower underlying iron ore price.

The +67% Fe high-quality product expected to be produced from Grängesberg continues to make the interest in developing the Grängesberg project more likely and potentially more attractive than many other undeveloped iron ore projects in Europe. The Ukraine conflict has highlighted the strategic positioning of Grängesberg. Prior to the conflict, Russia and Ukraine supplied over 20Mt of iron ore into the European steel market. With the future uncertainty around this supply, a long-term source of iron ore could be highly sought after by European and Middle Eastern steel producers. Grängesberg, with the high-grade nature of its concentrate, existing infrastructure and favourable location in southern Sweden in proximity to European steel mills, represents highly strategic positioning.  Below are the key financial metrics from the updated PFS:


Key MetricUnit2022 updated PFS
Ore to MillMt82.3
Life of MineYears16
Contained FeMt30.6
Recovered FeMt26
Outgoing ConcentrateMt37.2
Concentrate Grade% Fe70
Average annual Concentrate OutputMt2.3
Cash cost*US$/t Conc53.6
All-in Sustaining Cost**US$/t Conc57.8
Pre-production capitalUS$m399
Post-tax NPV8%%688
Post-tax Internal Rate of Return%26
Project paybackYears3.6
Average annual Post-tax Operating Cashflow ***US$m130


* Cash costs are inclusive of mining costs, processing costs, site G&A, transportation charges to port and royalties
** All-in Sustaining Cost includes cash costs plus sustaining capital and closure cost
*** Post-tax Operating Cashflow based on iron ore price forecast of US$120/t China CFR 62% Fe benchmark


The results from the PFS study represent another promising stage in development of the project and provide a very solid foundation. Grängesberg has the potential to be restarted as one of Europe’s largest individual producers of iron ore concentrates. When combined with the high-grade nature of the concentrate and proximity to European steel mills, the asset clearly demonstrates highly strategic positioning

Strategic positioning in iron ore


The iron ore price demonstrated significant volatility over the course of the calendar year 2021. In the first third of the year, the price rallied from US$170/t (62% CFR China) to US$235/t. The second third of the year saw the price collapse to US$87/t, mainly due to lower imports by China following its move to control steel production to meet carbon emission norms and Covid-19 related shutdowns. The final third of the year saw the price regain value as it closed the period at US$155/t. The iron ore market experienced another period of extreme volatility in the first half of 2022. While averaging US$140 per tonne for the full six months, the price fluctuated between a high of US$159 in March to a low of US$112 in June. Subsequently, the price declined to US$100 in July before recovering to US$115 in early August.


Iron ore is a non-fungible commodity with many variables that determine quality. There are number of key price affecting chemical components of iron ore including iron, silica, alumina and phosphorus. Iron ore also differs in its physical form. Fines require sintering (agglomeration into crude pellets) prior to use in the blast furnace, lump ore and pellets can bypass this process and be charged directly into the furnace – with both commanding an associated price premium. Most steel mills use a blend of different grades of ore, and a mix of sinter, lumps and fines but the quality requirements depend on the circumstances and availability.


A more recent element of the iron ore price formation process is the ‘green’ aspect. China’s 2016 update to its Environmental Protection law enforced stricter caps on industrial pollution, and consequently increased the appetite for higher purity ores, which has not diminished significantly although the law’s deadline has been postponed by five years. As a relatively simple ‘rule-of-thumb’, lower-grade ores with higher fractions of impurities such as silica and alumina require increased consumption of coke, which can raise emissions of controlled gases and particulates. We are now very much in an environment where ‘grade-is-king’. The 70% Fe high-quality product expected to be produced at Grängesberg would command premium prices and makes Grängesberg more attractive than many of the undeveloped iron ore projects in Europe.


The Ukraine conflict has demonstrated the strategic positioning of the Grängesberg Iron Ore Project. Prior to the Ukrainian conflict, Russia and Ukraine supplied over 20Mt of iron ore into the European steel market. With the future uncertainty around this supply, a long-term supply of high-grade iron ore concentrate is anticipated to see strong demand from both European and Middle Eastern steel producers. Historical production from Grängesberg demonstrated the ability to produce a 70% Fe concentrate, which would generate strong premiums in the current, and forecast, steel industry dynamics. With steel producers and their downstream customers looking to reduce the overall carbon footprint of manufactured products, supplies of high-grade concentrate feed to produce direct reduced iron (DRI) are becoming highly sought after. Importantly, the production of steel from DRI in an electric arc furnace has a significantly lower CO2 footprint than the traditional blast furnace route.


The opportunity for Anglesey Mining is now to advance the Grängesberg project through to a Financial Investment Decision. This could be completed along with securing a strategic investor, offtake partner, separate listing, or a combination of these options. However, we recognise that there is still a lot of work to do at Grängesberg, including consolidation of the asset, as well as updating both the resource and reserve models and undertaking environmental assessment studies as preliminary steps to preparing a Feasibility Study.

Project History


In May 2014, Anglesey announced that it had entered into agreements giving it the right to acquire a controlling interest in the Grängesberg Iron project in central Sweden including a direct 6% interest in Grängesberg Iron AB (GIAB), a private Swedish company which owns the mine; and, an option exercisable until 30th June 2015 to acquire an additional 51% in GIAB. Anglesey also entered into shareholder and co-operation agreements such that during the term of the option Anglesey holds management control and operatorship of GIAB.  Following a small investment in late 2019 and other investments since that date the company’s direct interest has increased to 49.75%


In September 2014 the following resource summary was produced by Roscoe Postle Associates Inc. (RPA):


CategoryTonnes% Fe% PContained Fe (tonnes)


Notes: CIM definitions were followed for Mineral Resources. The values for tonnages, grades and contained iron have been rounded. Mineral Resources are estimated at a cut-off grade of approximately 20% Fe. A minimum mining width of approximately 10 m was used.

RPA concluded that the Grängesberg iron ore deposit hosts a significant iron resource that has excellent potential for expansion at depth. Geophysical interpretations from the 1960s suggest that the ore body continues to at least 1,700 m below surface. Diamond drill holes confirm the mineralization continues to at least 1,100 m to 1,200 m below surface. In RPA’s opinion, more geotechnical, metallurgical, and other engineering studies were warranted to advance this project.

A programme has been developed to look closely at geo-mechanical and hydro-geological aspects of the site which will be critical components of the permitting regime required for the dewatering and reopening of the mine. This will include drilling boreholes into the general mine area and the capture and interpretation of key data on the physical aspects of the ground and hydrological conditions. No programme for this work has yet been fixed.