Success for Scania’s efforts in the mining industry − SEK 1.5 billion contract with Peab

Scania’s Swedish subsidiary has entered into a long-term agreement commencing in
late 2012, which will ensure safe road transportation of iron ore concentrate
until 2021 from Northland Resources’ ore-mining operation at Pajala in far north
Sweden. The order is worth about SEK 1.5 billion. Scania will deliver a total of
about 400 complete truck-and-trailer combinations and service-related products
tailored to the mining industry’s very strict demands in respect of load
capacity, uptime and delivery precision. The order was placed by the mining
company’s general contractor Swerock, which is a subsidiary of the Swedish
construction and civil engineering company Peab.
Scania’s overall undertaking covers delivery of truck combinations with
specially built trailers, driver training and coaching, vehicle monitoring,
maintenance and repairs of trucks and trailers, including tyres, supplies and
service. The deal will be financed by the Swedish subsidiary of Scania Financial
Services.

“This is the most comprehensive deal we have concluded to date with the Swedish
mining industry. We have used the overall competency of the Scania organisation
to cater for the various parameters, which aside from the trucks and trailers
themselves, are crucial for our customers’ profitability. For instance, Scania
has also been involved in planning the transportation arrangements and road
transport infrastructure,” says Sandro Grimpe, Service Marketing Director at
Scania-Bilar Sverige AB and who is responsible for the deal with Peab’
subsidiary Swerock.

Agreement on continuous improvements

Under the agreement, Scania undertakes to meet the mining company’s requirement
that it should continually reduce the cost per tonne transported over a nine
-year period based on performance indicators for expenditures on fuel, tyres,
repairs and maintenance.

“The order represents a success for our efforts to meet the mining industry’s
strict demands for comprehensive solutions. Scania not only delivers production
equipment, i.e. vehicles, but also services that are optimised for cost
-effective, heavy haulage round-the-clock,” says Björn Winblad, Managing
Director of Scania’s Mining business unit.

To ensure vehicle uptime, Scania’s Skellefteå Bil AB dealership in northern
Sweden will expand operations at its service workshop in Kiruna. In the future,
it may be necessary to establish a service business in the Kaunisvaara area
(near Pajala) as well.

Another part of Scania’s overall undertaking is that both trailers and
the ‘dolly’ which is used to connect the truck and trailer will be fitted out
with axles made by Scania.

“This means that our workshops can maintain just as high service competency and
accessibility to parts for trailer axles as for Scania’s own vehicles,” says Mr
Grimpe.

Scania has initiated efforts to supply components manufactured in-house to
trailer producers, for example. These operations are organised in a special
business unit, Scania Components.

“We will help broaden Scania’s business and customer offering,” says the head of
the newly-formed unit, Michael Sjöberg.

Long driving distances

The Scania trucks will enter into round-the-clock service with annual driving
distances of400,000 kmfor haulage of the concentrated ore to railway depots for
reloading to the Iron Ore Line (Malmbanan), a railway that will carry the ore to
theportofNarvikon the Atlantic coast of northernNorway. The rigs are optimised
for gross weights of up to 90 tonnes.

When the mining operations are fully developed in 2015, some 80 trucks and 400
drivers will be responsible for ensuring road transport of the almost 5 million
tonnes of iron ore concentrate which will be produced annually in the Pajala
area according to current production plans.

For further information, please contact:

  · Hans-Åke Danielsson, Press Manager, tel. +46 8 553 856 62, email hans
-ake.danielsson@scania.com
  · Björn Winblad, Managing Director, Scania Mining, tel. +46 8 553 810 46,
email bjorn.winblad@scania.com
Scania is one of the world’s leading manufacturers of trucks and buses for heavy
transport applications, and of industrial and marine engines. Service-related
products account for a growing proportion of the company’s operations, assuring
Scania customers of cost-effective transport solutions and maximum uptime.
Scania also offers financial services. Employing some 37,500 people, the company
operates in about 100 countries. Research and development activities are
concentrated in Sweden, while production takes place in Europe and South
America, with facilities for global interchange of both components and complete
vehicles. In 2011, net sales totalled SEK 87.7 billion and net income amounted
to SEK 9.4 billion. Scania press releases are available on www.scania.com