page_title: LKAB Malmtrafik
section_title: Establishment
hierarchical_section_title: LKAB Malmtrafik / History / Establishment
caption_attribution_description: El-Lok IORE 110+109 Gällivare 11.08.04
context_page_description: LKAB Malmtrafik, earlier Malmtrafik i Kiruna AB, is a Swedish railway company which operates the iron ore freight trains on the Iron Ore Line and the Ofoten Line. MTAB is a wholly owned subsidiary of the mining company Luossavaara–Kiirunavaara. In Norway, operations are handled by the subsidiary Malmtrafikk AS. Malmtrafik hauls ore from LKAB's mines in Kiruna, Malmberget and Svappavaara to the ports of Luleå and Narvik, the latter located in Norway. The company owns 28 Iore locomotives and 750 hopper cars. Each train is 68 cars long and weighs 8,600 tonnes, allowing the company to transport 33 million tonnes per year.
  Traditionally the ore hauling had been done by the Swedish State Railways and Norwegian State Railways. In the late 1980s, LKAB started a process to take over operations and increase efficiency by using heavier and longer trains. Because of the profitability in the operations, especially NSB was reluctant to lose the operations. In 1993, LKAB received permission to operate their own trains in Sweden, and from 1996 in Norway. MTAB and MTAS were created in 1996 when they took over the hauling formerly operated by NSB and SJ. It inherited Dm3 and El 15 locomotives.
context_section_description: In December 1991, LKAB stated that they wanted to take over the operation of the ore trains from NSB and SJ. At the time, they were paying 0.15 Swedish krona (SEK) per tonne kilometer in Sweden and 0.30 Norwegian krone (NOK) per tonne kilometer in Norway, while comparable rates abroad were between SEK 0.03 and 0.10 per tonne kilometer. While SJ had several times during the 1980s agreed to reduce their rates, NSB had not offered the same, and was making a profit of NOK 60 to 70 million per year. LKAB stated that they, by taking over operations themselves, could save SEK 200 million per year. In addition, they stated that they could save between SEK 50 to 100 million in auxiliary fields. LKAB had sent an application to Swedish authorities for permission to take over operations, and had received positive feedback from SJ. NSB, on the other hand, did not support a solution where they did not operate the trains themselves. LKAB stated that if an agreement with NSB could not be reached, they would shift all their transport to the Port of Luleå.
  In February 1992, a report ordered by Kiruna Municipality recommended that LKAB, SJ and NSB create a common company to operate the ore trains. At the same time, SJ stated that the consequence of LKAB taking over operation could be that passenger trains on the lines would be terminated. In April 1992, LKAB was awarded traffic rights by the Swedish Rail Administration. There was a disagreement as to whether the agency had the authority to do this, and SJ stated that it was only the Ministry of Enterprise, Energy and Communications who had the authority to award traffic rights on the stem lines, in particular from Boden to Luleå. The rights also did not affect the Ofoten Line.
  The following day, SJ and NSB stated that they were considering establishing a joint venture that would take over the operations of the ore trains. In May, LKAB stated that Norway would, through its membership in the European Economic Area, be required to allow any train operator to run trains on a line, while this was rejected by NSB who stated that this only applied within the European Union, of which Norway was not a member. In late May, NSB stated that they were able to cut costs by 25% and that they would reduce the price to LKAB more than this. LKAB rejected the proposal, and stated that NSB had shown their ability of restructuring too late. By August, SJ and NSB had offered to reduce the price from SEK 650 million to 450 million, but LKAB stated that they believed it was possible to reduce the costs further.
  In September, Norwegian Minister of Transport and Communications Kjell Opseth from the Labour Party, stated that it would be "unfortunate" if LKAB should take over the operations. The Swedish Government stated that it was their intention to privatize LKAB. On 18 September, 3,000 in Narvik held a general strike against LKAB's plans. At the time it was not possible for NSB to fire redundant employees, at that the state agency would have to continue to pay their Narvik employees who would not be hired by LKAB, should the latter take over operations.
  In October the Swedish Ministry of Communications gave the final permission for LKAB to take over operations in their own right. On 26 October, SJ and NSB signed a new five-year contract with LKAB where the latter would purchase transport services from the two state railway. The annual price had then been reduced from SEK 650 to 400 million. Political commentators stated that the agreement allowed LKAB to keep all the profit in the line and introduce new cost savings, while SJ and NSB kept face by keeping the operating contract. The price reduction would mean that both NSB and SJ would have to lay off employees.
  In 1993, the state railways were losing money on the ore trains. In January 1994, SJ and NSB stated that they were going to merge the operations of the Iron Ore Line and the Ofoten Line. In May 1994, LKAB applied for traffic rights on the Ofoten Line. This was rejected in December by the Norwegian Ministry of Transport and Communications, who stated that t
caption: Twin Iore locomotives in Gällivare
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