Swedish city is moving as Europe ramps up its minerals push
The LKAB facility in Kiruna, Sweden. The company said on Jan. 12 that it found Europe’s biggest known deposit of rare earth elements there.
Jonas Ekstromer | Afp | Getty Images
The ripple effects from Europe’s growing appetite for raw materials extend all the way to Sweden’s far north.
Thousands of residents and buildings are being uprooted in Kiruna, a city that lies 145 kilometers (90 miles) north of the Arctic Circle. The relocation project is regarded as one of the world’s most radical urban transformations.
Kiruna is physically on the move because of ground subsidence from the expansion of a sprawling underground iron ore mine. A new home is being created about 3 kilometers east of the old town as part of a multi-decade process that’s expected to be completed by 2035.
“It’s a place that would seem exotic to so many and, in a way, I guess it is, but also it is a small town like so many others — struggling with what they are struggling with and challenged by being so dependent on one company,” Jennie Sjöholm, senior lecturer at Sweden’s University of Gothenburg, told CNBC by video call.
Established 125 years ago as a city for the iron ore mining operations of state-owned firm LKAB, Kiruna is a small community that serves as both a significant European space hub and home to the world’s largest underground iron ore mine.
Every resident in Kiruna knows that we have to move from our homes sooner or later because we are dependent on this mining industry.
Mats Taaveniku
Chairman of the municipal council in Kiruna
LKAB is small in global terms but a highly significant regional player, accounting for 80% of all iron ore mined in the European Union.
Alongside its iron ore operations, which are integral to the steel-making process, LKAB recently identified one of Europe’s largest known deposits of rare earths, further strengthening its position in the extraction of essential materials for the green transition.
Moving a city
There are several obstacles to the successful relocation of Kiruna, with players across the spectrum raising political, economic and environmental concerns. Indeed, both the municipality and LKAB have called for greater financial support from the state, as well as the release of more land to accommodate the transformation.
Others have also flagged concerns about the relationship between resource extraction and community sustainability, particularly regarding the potential impact on indigenous Sami reindeer herding and culture.
In this aerial view, the Kiruna Kyrka church is transported by road to a new location on August 20, 2025 in Kiruna, Sweden. The church, weighing 672,4 tons, is being transported as a whole to a new location 3 km away to avoid damages caused by LKAB´s iron ore mine.
Bernd Lauter | Getty Images News | Getty Images
The city’s relocation, which was first planned in 2004, received international attention in August 2025 during the spectacular move of its iconic Kiruna Church. In a feat of engineering, the…
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