More than 120 miles north of the Arctic Circle lies the city of Kiruna, Sweden, a charming community of roughly 18,000 that provides 90% of all the iron sold in the European Union. 
 
 The city is booming and beloved by its residents, but there's just one problem: Kiruna is sinking into the earth. 
 
 The city's iron mines are located almost directly below its current center, and decades of heavy mining have loosened the city's foundations, deforming the ground in the area. If the city wants to keep extracting iron, it must go dangerously deep into the Earth, possibly risking total collapse of homes and buildings. 
 
 Kiruna's solution: Pick up the entire city and relocate it, nearly two miles away from the mines. 
 
 Relocating an entire city, of course, is highly complicated and difficult — not to mention costly. But LKAB, the state-owned company responsible for the mine, is footing the entire bill until the year 2033. In 2010, LKAB had already spent $2.4 billion on the move and announced plans to sink another $3.8 billion in the following years. 
 
 The total cost of relocating the city is still anyone's guess, however, since the move will last the rest of the century. LKAB predicts its rich supply of iron ore will finance the project, keeping it afloat for decades to come. 
 
 The architecture firm behind the move, White, plans to migrate the city center over the next five years, concluding sometime between 2019 and 2021. Relocating the entirety of Kiruna will take much longer. According to White's timeline, the town will slowly move eastward, neighborhood by neighborhood, relocating the majority of its buildings and population within 30 years. But the master plan, which includes turning Kiruna into a more sustainable, walkable city with a diversified economy, is expected to be compete sometime around 2100. 
 
 In the short term, White has been tasked with moving many of Kiruna's most prized structures. Some, particularly the buildings that have been in the city for decades, will be plucked from their foundations and driven or airlifted to the new city center. 
 
 One of those buildings is the town church, which opened in 1912 and was voted the most beautiful building in Sweden in 2001 by Swedish residents. Others include Kiruna's city hall and a local store, called Centrum, which has been family-run since 1933. 
 
 "They are going to move the city and we will follow along," Johanna Sevä, the store's co-owner, explains in a new short film about Kiruna. "We are going to move with the store." 
 
 Not all buildings will be relocated, however. LKAB plans to pay residents of homes or apartments that aren't getting moved 25% more than market value to cover the cost of a new house. Residents can also opt to swap their old home for a new one, which is what Johanna Sevä did in 2013. The homes that are left behind will get demolished. 
 
 Officials from LKAB first noticed the damage caused by mining in 2003 when miners sought to expand their digging to penetrate deeper iron stores. By the next year, the town had already decided to move. 
 
 Mark Szulgit, one of the architects involved with the project, says that successfully moving the city's most iconic pieces of history will be the key to preserving Kiruna's identity. 
 
 "Our biggest challenge is not the design of a new city, which is sustainable and attractive and modern," Szulgit says in the film. "The biggest challenge is to move the minds of the people, and to move the culture." ||||| Bloomberg News The entire Swedish city of Kiruna is migrating about two miles east after fissures created by iron-ore mining weakened the earth beneath the city of 18,000 residents. Shown, a local youth skateboards on a concrete road near the affected land. 
 
 KIRUNA, Sweden–It is a tough slog trying to relocate an entire city—just ask the people of this Swedish mining town dozens of miles above the Arctic Circle. 
 
 For the Kiruna municipality, the process started in 2004 when it received an unassuming one-page letter from the state-controlled mining company Luossavaara-Kiirunavaara AB, or LKAB. 
 
 To extract more iron ore, it needed to dig deeper into a nearby mountain, leading to the fracturing and deformation of ground sitting beneath thousands of apartments, the City Hall, the main church and other vital buildings. 
 
 A decade later, fissures in the ground are creeping ever closer to the center of Kiruna, and some residents of this city of 18,000 may soon start packing their bags. 
 
 In March, Stockholm-based architectural firm White arkitekter AB won a competition with its proposal of a master plan for a new city shifted about two miles to the east, dubbed "Kiruna 4-ever." 
 
 In mid-September, a winner will be picked in the design competition for a new City Hall, the first major building to be relocated. 
 
 Enlarge Image Close Bloomberg News Swedish state-owned miner LKAB already has dished out $532 million to move Kiruna two miles to the east. 
 
 Over the next two decades, more than 3,000 apartments and houses, several hotels, and 2.2 million square feet of office, school and health-care space will migrate east. 
 
 The massive relocation is virtually unprecedented and is raising a range of thorny issues including how to compensate property owners and how to design the new city. 
 
 White's plan for the new Kiruna will showcase many of the ideals popular in present-day city planning, including sustainability, a bustling, densely built city center, mixed-use development and less dependence on automobiles. 
 
 At the same time, the anxiety level is rising over whether the massive project will be completed on schedule. "We should have started the process in 2009 or 2010," says Peter Johansson, the local contracting manager at construction company NCC. "The only thing that cannot be stopped is the fracturing, and it makes me worried thinking about how we will be able to make this in time." 
 
 LKAB, which has agreed to pay the bulk of the tab, says it is impossible to estimate the full cost of the project. But it has dished out 3.5 billion kronor ($532 million) to date and set aside an additional SEK7.5 billion for the remaining transformation. 
 
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 The biggest cost uncertainty relates to property values. Under the current plan, owners of real estate that needs to be demolished will have the value of their properties assessed independently. LKAB will pay them with a 25% premium added. 
 
 The residents of Kiruna largely support the relocation because the city is almost entirely dependent on extracting iron ore from the mountain. Residents know what it is like when LKAB falls on hard times, as in the 1970s and 1980s when the company's struggles sparked a population drop of almost 30%. 
 
 That is one reason why people realized the project is necessary, Kiruna's municipal commissioner Kristina Zakrisson says. "The town and the mine are mutually dependent." 
 
 Krister Lindstedt, a White architect, says the fragmented and low-density layout of the current city also may be incentive for people to move. "Kiruna has built a city that people don't really want." 
 
 White architects describe their plan for the new Kiruna as a "Model City 2.0." Topping the agenda is establishing a new city center soon as possible. A new City Hall, which will be its hub, will be built on a plot that now houses a half-occupied industrial property and next door to an asphalt factory. 
 
 The town hall, planned for completion in 2016, will be accompanied by a public square and a train station so people and businesses will be attracted to relocate. 
 
 Downtown stores have about 10 years to move, but some owners are concerned their business will be hurt if they move too early. 
 
 "There is a major concern among store owners in the city center about what will happen if only some of the businesses in the current center will move," says Kjell Törmä, co-founder of Kiruna's only book shop. 
 
 Ms. Zakrisson agrees. "Ideally, we would close downtown on Friday and open in the new location on Monday. That may be unrealistic but our ambition is to make it as coherent as possible." 
 
 There also are significant challenges when it comes to housing. The city already is facing an acute housing shortage, Ms. Zakrisson says, and it needs at least 100 new homes even before demolition starts. 
 
 Construction companies like NCC, which sees potential for a 200% increase in construction volumes in Kiruna, will need even more homes for workers that will help build the new city. "We need to bring people here, but it will be hard if we can't offer decent housing," says Mr. Johansson, the construction manager. 
 
 Write to Niclas Rolander at niclas.rolander@dowjones.com 
 
 A version of this article appeared September 4, 2013, on page C7 in the U.S. edition of The Wall Street Journal, with the headline: How Do You Move an Entire City? Carefully. ||||| By Barbro Plogander 
 
 Epoch Times Staff 
 
 GOTHENBURG, Sweden—The city of Kiruna at the northern tip of Sweden, home to 23,000 residents, sits atop the world’s largest iron ore mine. With an increase in worldwide demand for the resource, state-owned mining company Luossavaara-Kiirunavaara Aktiebolag (LKAB) is planning to move the entire city to better access the ore. 
 
 Ulrika Isaksson, information officer for the municipality of Kiruna, says that the city will move in stages over a long period of time. The first stage will involve moving the city center about 1.5 km (0.9 miles) northeast. 
 
 “We’re not quite sure about how it will happen, and this is because LKAB has to negotiate separately with everyone who owns a building in the area,” she said. 
 
 Next year, LKAB will open up a new main level at the Kiruna mine, at a depth of 1,492 yards (1,365 meters), and this is what has forced the city to move, according to Anders Lindberg, information officer at LKAB. 
 
 “We have looked at how much of the city will be affected when we go down to that level. It will take us between 20 and 25 years, and 3,000 houses will be affected during that period,” Lindberg said. 
 
 According to Swedish law, LKAB is economically responsible for the move. Lindberg lives in Kiruna himself, and used his own situation as an example of what the process of buying out the house owners can look like. 
 
 The difficult part is walking into people’s homes and telling them that they have to move. —Anders Lindberg, Information Officer, LKAB 
 
 “LKAB will buy my house within ten years from now,” he said. “After that, I will still stay there as a tenant. LKAB is seeking a mining permit in my area, which means they must buy all of the houses in that area. When they eventually start mining, it will probably take 10–15 years for the ground to be affected to such a degree that I have to move.” 
 
 The moving of 3,000 households takes some serious planning. Much of the infrastructure is already in place, with new roads, a new railroad, and utilities. An area of 140 households is currently being emptied because of its proximity to the cracks that have already formed in the mountain from the mining, but so far, no houses have been demolished or moved. 
 
 LKAB has put aside 6 billion SEK (about $900 million) thus far for the restructuring of the entire community. Anders Lindberg says that LKAB’s profits are so large that the move is well within its technical and financial capacity. 
 
 The difficult part is walking into people’s homes and telling them that they have to move. 
 
 “Sure, we give you another nice place to live, but you will never be able to walk around in the area where you grew up, or where you raised your children,” he said. 
 
 Isaksson said that an architect competition is underway to decide what the new city center will look like. 
 
 “The municipality and LKAB have decided together which buildings of cultural value need to be moved,” she said. “There’s 19 of them, and they will all have a role in the new city.” 
 
 Among the buildings to be moved is the beloved red wooden church from 1912, and the house of Hjalmar Lundbohm (1855–1926), the first managing director of LKAB. He is more or less considered the founder of Kiruna, since it was his idea to create this city in the middle of nowhere. He understood that it would be difficult, even with the best of wages, to motivate miners to move to this subarctic wasteland without creating an attractive community for them and their families. 
 
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 This challenge of creating a place where people will want to live is exactly what faces LKAB and the municipality again today as they plan their big move. 
 
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– What do you do when a city is sinking? Why, you move it, of course. That's what the Swedish city of Kiruna has decided because iron mining below it has weakened the foundations of houses and buildings, Tech Insider reports. Now LKAB, the state-owned company behind the mining, is dedicating billions of dollars to moving Kiruna about 2 miles east. The ongoing 30-year plan includes relocating 21 particular buildings (like Kiruna's city hall and its attractive church) and paying residents to have their homes demolished and rebuilt at the new location, the Guardian reported last year. An Arctic city that's in darkness most of the year, Kiruna "will be a bit like a walking millipede with a thousand feet, moving, crawling, slowly ... toward the east," says an architect in a promotional video for the plan. Critics say social networks will be shattered by the move and relocated residents will have higher rents, but on the bright side, the new city is supposed to be more walkable and economically diverse. Plus there's a lot at stake: Founded partly by LKAB in 1900, the city of 18,000 supplies the European Union with 90% of its iron. "There might be some concerns, but the mine has to keep operating," a resident says. It's not a first, either: Cities have been relocated before for economic or safety reasons, and other towns are considering moves over climate change, the New York Times notes. Only possible problem for Kiruna? "Iron is under the new town center, too," admits a city official. "[But] it will be too expensive for LKAB to move the city again." (In another mining story, Apple and Microsoft are said to use cobalt mined by kids.)