The Swedish iron ore was an important theme in the World War II debate. Both the Allies and the Third Reich were keen on the control of the mining district in northernmost Sweden, surrounding the mining towns of Gällivare and Kiruna. Both the planned Franco-British support of Finland in the Winter War, and the following German occupation of Denmark and Norway (Operation Weserübung) were to large extent motivated by the wish to deny the respective enemy iron critical for wartime production.
The Anglo-German Naval Agreement (AGNA) of 1935, concluded between Britain and Germany, seriously challenged the independence of Sweden and its long-standing policy of peaceful neutrality. Signed on June 18, the agreement was "the most startling event of 1935". Despite provisions in the Treaty of Versailles, the AGNA allowed Germany to increase the size of its navy to one-third the size of the Royal navy. At the same time, Britain agreed to withdraw its navy from the Baltic Sea completely, making Germany the dominant power in the Baltic, making itself a potential threat to Sweden and the other Baltic countries during a time of war as well as in peacetime.
Iron ore is extracted in Kiruna
, and brought by rail to the harbours of Luleå and Narvik
. (Borders as of 1920–1940.)
The Anglo-German Naval Agreement made it easier for the German navy to control a major portion of the sea traffic traveling in and out of the Baltic, including sea traffic traveling through the Gulf of Bothnia. It was from the Gulf of Bothnia and the Swedish port of Luleå where a majority of Germany's iron-ore imports were originating from. With 50 percent of Germany's iron-ore imports coming from Sweden, iron-ore was of major importance to Germany, especially for the German military's attempts at rebuilding its war arsenal. Grand Admiral Raeder, head of the German navy, said himself that it would be "utterly impossible to make war should the navy not be able to secure the supplies of iron-ore from Sweden". By controlling the Baltic, as Gunnar Hägglöf has stated, "All the iron-ore needed by Germany could be shipped from the harbours of the Baltic".
Germany's expanded power, as granted through the AGNA, posed a serious threat to the independence of nations that bordered on the Baltic, particularly Sweden and the Baltic states of Latvia, Lithuania and Estonia. It forced some of those nations to seriously reconsider their traditional policies up to that point, with Sweden being no exception.
Iron ore trade
For Germany, the import of Swedish iron-ore was of extreme importance in its attempts to rebuild its military strength, despite the stipulations presented in the Treaty of Versailles. Prior to the Second World War, Germany was able to supply itself with only a quarter of its total iron-ore consumption per year, with the rest being imported from other countries. Sweden provided up to almost 60 percent of the iron-ore that was imported into Germany. Without the sixty percent of iron-ore imports coming from Sweden, Germany might possibly have not been capable of initiating the Second World War. In 1940, iron-ore imports from Sweden as well as Norway constituted 11,550,000 of the 15,000,000 tons Germany consumed that year. With the absence of Britain in the Baltic due to the Anglo-German Naval agreement, Germany was capable of controlling the vital trade routes between Sweden and Germany. The AGNA also made it difficult for Sweden to avoid the wishes of Germany, since its navy was capable of virtually controlling most of the Baltic.
The primary ports where Swedish iron-ore originated from were from the town of Narvik in the northern region of Norway on the North Sea and Luleå in Sweden on the Gulf of Bothnia. During the war, Britain was effective in cutting off the port city of Narvik in Norwegian waters, by mining large areas of the North Sea. But since the AGNA aided in preventing the British from effectively entering and dominating the Baltic sea in naval affairs, iron-ore continued to flow into Germany from the port city of Luleå. Had Sweden stopped providing Germany with its iron-ore on its own accord, Sweden would have run the risk of a German invasion. It was known in government circles in Sweden that Germany had been considering an invasion of Sweden, but the idea was shelved in light of the fact that Sweden was well armed, and a German invasion of the country may have proved difficult and impractical.