The role of product differentiation in the iron ore industry

the case of LKAB

Document identifier:
Access full text here:10.1016/S0301-4207(96)00020-7
Keyword: Social Sciences, Economics and Business, Economics, Samhällsvetenskap, Ekonomi och näringsliv, Nationalekonomi
Publication year: 1996
Relevant Sustainable Development Goals (SDGs):
SDG 9 Industry, innovation and infrastructureSDG 3 Good health and wellbeing
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The analysis shows how the Swedish iron ore producer, LKAB, in spite of mining its ore underground in an arctic climate at relatively high costs, has remained internationally competitive thanks to its large-scale operation with high grade magnetite ore, pelletization and relatively short distance to both its shipping harbour and its international markets. LKAB starts at a relatively high level on the supply curve with respect to mining costs, but as the analysis continues to describe, LKAB moves gradually downwards on the supply curve on delivered pellet costs. The analysis clearly shows that LKAB has successfully managed to find its comparative advantage and that its competitive strength is sustainable, primarily thanks to its rich deposits of magnetite ore.


Stefan Hellmer

Luleå tekniska universitet
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