Stockholm - Swedish state-owned mining group LKAB announced plans to invest 12.5 billion kronor (1.5 billion dollars) to expand its mining operations in Kiruna, northern Sweden.

The investment in a new main level was expected to secure LKAB's iron ore mining and processing operations in Kiruna until 2030, the group said.

"This is in line with the company's long-term strategy and it backs up investments totaling about 20 billion kronor that we have already made in facilities at surface level," LKAB chief executive Ola Johnsson said.

The mine in Kiruna has high-grade iron ore that is converted into pellets.

However, the location of the mine will however mean the relocation of large parts of Kiruna city since the mining operations are conducted under the city limits.

Plans are underway to move the railroad serving the mine, as well as even moving key buildings in Kiruna such as the town hall and the main church.

LKAB said it was working with the central government as well as local authorities, other companies, as well as property owners and other stakeholders to find solutions.

The company said the investment hinged on mining concessions, land use permits and environmental permits. (dpa)