Maquinaria Lorenzana S.A.

Sweden's state-owned mining company LKAB is bulldozing a section of the town of Kiruna so it can expand its iron ore mining in the area.

Residents will move a few kilometres east of the current location to new homes to make way for the mine, reports Bloomberg.

About 35% of the town will move, including 65% of the apartments, over the course of several years. The new town will have basic amenities in place by 2017.

The company said the move was imperative to keeping the mine functioning. The new part of the underground mine is about one kilometre below the surface, but deformations and cracks can affect the town's infrastructure.

LKAB produces 90% of all iron ore in the European Union from the world's largest contiguous ore body in Kiruna. The company makes up 64% of the country's net exports, which ranks it as the seventh largest exporter.

The company opened the new mine level Tuesday, it announced on its website, which it expects will extend its life by 20 to 25 years. Each year, it will put out 35 million tonnes of crude ore.

This is the first stage of the expansion, which started in 2008, and the reamining four stages will be completed in early 2017.