SCANDINAVIA MINERALS YEARBOOK—1988pellet-making capacity in its
three
plants in Kiruna, Maimberger, and Svappavarka by about 700,000 tons per year.
When expansion is completed, the company's overall pellet capacity will be
1 1 million tons per year. 
 Mining operations ceased at Svappavaara for 5 weeks in midyear. LKAB extensively
rehabilitated the plant and installed new equipment. The pellet plant capacity
was increased to 3.3 million tons per year. New equipment for loading pellets
onto railway cars was installed. A fluorine flume purification plant and
exhaust gas recovery furnace also were constructed. 
 
 Silicon.—KemaNord decreased silicon production at its Ljumgaverk
plant
from 24,000 tons per year to 14,000 tons per year in the last quarter of
1988. The company was unable to negotiate a lower cost power contract with
the Government. The Government's new energy policy aims to increase the average
price of power for the industry by 33% to 35% over the next 3 years. The
company, whose power contract expired at yearend, maintained that it could
not absorb escalating energy costs. KemaNord shut down one of its two furnaces
and announced that it was switching its emphasis to high-grade silicon used
in the chemical and aluminum industries. 
 
 Steel.—After a relatively slow year in 1987, business increased
for
the Swedish steel industry. The industry operated close to capacity. Most
companies showed profits. Companies made substantial investments in environmental
protection equipment to meet stricter operating criteria. 
 In early 1988, a new steel group was formed when Welbond AB was created
from Smedjebacken-Boxhohn AB, Hahnstad Jarnverks AB, and Forsbacka Jernverk
AB. The Welbond Group, now with the name Fundia AB, is scrap based and was
expected to be a major manufacturer of long steel products in commercial
grades. 
 Svenskt Stal (SSAB) implemented a ~ reorganization prior to a public stock
issue, the date of which was unknown at yearend. SSAB planned to concentrate
on strip mill products. New divi~ sions instituted were SSAB Strip Mill ~
AB, SSAB Heavy Plate AB, and SSAB Bar Steel AB. 
 SSAB announced its decision to ~ close several units in 1989 including the
electromelting shop and wire rod mill at Domnarvet, the small section mill
and two continuous casting machines at Lulea, and the hot strip mill at Surahammer.
These shutdowns were expected to result in the loss of 2,500 jobs. 
 The proposed closure of SSAB's two electric arc furnaces at Domnarvet and
Ovako Steel Oy AB's electric furnace at Hallefors would cut ferrous scrap
import requirements by around 500,000 tons per year. Because Sweden imports
around 750,000 tons per year, import requirements would drop to around 250,000
tons per year. The export ban on Swedish scrap could be lifted when the closures
take place. 
 
Industrial Minerals.—Cement.—The 
cement producer Allentown Cement Co. and the ready-mixed concrete manufacturer
Vineland Co., both of the United States, and Castle Ltd. of the United Kingdom
were purchased by the Euroc group of Sweden and the Aker Group of Norway.
The international diversification by Aker and Euroc was coordinated through
the joint venture Scancem AB. The establishment of Scancem resulted in the
formation of one of the largest international cement enterprises. By acquiring
Castle Cement, Scancem gained 25% of the United Kingdom's cement market.
Both U.S. companies are also strongly positioned in their U.S. markets. 
 
 Mineral Fuels.—According to Vattenfall, the state power authority,
Sweden faces the prospect of a doubling of cost of energy production. A major
cause of this price increase is the planned phaseout of its nuclear power

program. This phaseout is to start in 1995 . Nuclear power currently accounts
for about 50% of the country's energy supply. Vattenfall estimated that energy
prices would increase 40% by the mid-1990's. The effect of the higher prices
would be felt across a wide range of services. Two reactors due to be closed
by the mid-1990's include one of four at the Ringhals station and one of
two at Barseback. Forestry, metals, and mining industries would be hit particularly
hard. 
 Sweden plans to buy natural gas to replace the nuclear energy power stations.
Negotiations were underway at yearend between Vattenfall, the Finnish state
owned oil company Neste Oy, Norway's Statoil, and the U.S.S.R. To justify
the cost of a pipeline from the Norwegian gasfields, Neste estimated a market
of 5 billion cubic meters per year would be required. Through this pipeline,
Sweden would be connected to the European gas~grid, which would act as a
stabilizing price factor for Sweden's industry that competes with the EC
market. 
 Swedegas and Neste Oy held discussions to determine volumes and prices for
Soviet gas via pipeline from Finland to Sweden. A Baltic Sea crossing from
Uusikaupunki to Gavle, chosen as the best route for the pipeline, was estimated
to cost $242 million. 
 There was renewed interest in Baltic Sea petroleum prospecting after seismic
investigation confirmed oil deposits of an estimated 60 million barrels.
Two Swedish oil companies, Hydrocarbon International (HCI) and Gotlandsolja
AB (GOAB), formed Grauten Oil AB. The company will drill for gas and oil
deposits in the Baltic Sea sector and on the island of Gotland. Grauten expects
to perform 110 test drillings over the next 3 years at an estimated cost
of $3.3 million. 
 
 
 ' Prepared by Donald E. Buck, Jr., physical scientist, Division of International
Minerals. 
 2Where necessary, values have been converted from 
 
Danish krone (DKr) to U.S. dollars at the rate of 
 
733