Swedish mining companies LKAB and Boliden have agreed to establish a plant near the Boliden Aitik mine to extract pyrite concentrate from mining waste as part of efforts to move towards a circular business model.

The companies said the extracted pyrite concentrate would be processed into fossil-free sulphuric acid, which will then be used to extract rare earth elements and phosphorus from LKAB's mining waste.

In the first instance, LKAB will produce phosphorus and rare elements from the ongoing mining, but in the future could expand production by extracting these from mining waste that has been previously deposited.

Jan Mostrom, president and chief executive officer of LKAB, described the deal as an "exciting opportunity" to remove dependence on fossil products and get closer to being carbon-free.

"The sulphuric acid production will also generate excess heat that can be used in our industrial park, as well as fairly large volumes of iron oxide as a by-product," Mostrom said.

"Collaborating in this way is smart, climate-efficient and positive for LKAB's project to extract critical minerals."

The parties also explained that circular business models increase materials efficiency and could become an attractive and increasingly important business in the future.

Mikael Staffas, president and chief executive officer of Boliden, said the new plant would emphasise Northern Sweden's importance in the movement to cut emissions.

"Increased resource utilization combined with potential profitability may mean that together our companies can provide even more value in the climate transition," Staffas said.