The partnership between Railcare and Kaunis Iron continues with a ten-year contract for transports of iron ore. It is a distance of 220 kilometres between Pitkäjärvi and Narvik, and Railcare T operates two round trips per day, seven days a week along this route.
Mining company Kaunis Iron is steaming ahead at full speed and summed up 2020 as a record year, despite the pandemic. High demand for iron ore from China, for example, and reduced supply following production challenges in South America are driving up prices.
As a relatively new company, Kaunis Iron, has benefited from this. We achieved our production targets in 2020, and definitely exceeded our financial expectations,” says Klas Dagertun, CEO of Kaunis Iron AB.
From mine to customer
The iron ore concentrate is transported by truck from the mine in Pajala to the Pitkäjärvi transhipment terminal, outside Kiruna. There, the ore is loaded onto a train for the 220 kilometre run to Narvik. Each train set comprises 2 locomotives and 36 wagons and carries an average load of 3,100 tonnes. Railcare operates two round trips per day, seven days a week, making a total volume of about 2.3 million tonnes of iron ore annually. Once in Narvik, the ore is loaded onto a ship for onward transport to the customers’ steelworks.
Valuable contract
The new contract for iron ore transports is valued at SEK 740 million and runs until November 2031. Just as before, the wagons are owned by Kaunis Iron, while Railcare T provides the hauling and shunting locomotives. Railcare T is responsible for planning train assembly, shunting resources in connection with transhipment from truck to rail at the Pitkäjärvi terminal and at the docks in Narvik, as well as for operating the trains along the line in between.
Beneficial collaboration continues
We are pleased to have won Kaunis Iron’s continued trust. Given our northern Swedish roots, participating in this project, which reinforces northern Sweden’s reputation as a producer of high-quality iron ore, feels particularly positive. This has become the long-term relationship we hoped for when the collaboration began in 2018,” says Daniel Öholm, CEO of Railcare Group AB.
Johan Hansén, Production Manager for Railcare T continues:
We have a good collaboration with personal contact channels and flexible working methods. The new contract provides stability for Railcare T and shows that we can deliver beneficial solutions, particularly with regard to special transports.
Great demand among steelworks globally
At Kaunis Iron in Pajala, production of iron ore products continues, passing 2,084 thousand tonnes in 2020. Their unique iron ore concentrate offers benefits in terms of quality and the environment in demand among steelworks around the world, making the logistics chain extra important.
The ten-year contract with Railcare is positive. It establishes a long-term perspective for our continued operations and affords us the conditions to continue developing our partnership, concludes Klas Dagertun, CEO of Kaunis Iron AB.
This is an article from the 2021 Railcare News.
To read the magazine in its entirety, click here >>
