When the Swedish state nationalised the mining company LKAB in 1957, it became the sole owner of one of the richest iron ore fields in the world. The government was aware that iron ore was a non-renewable resource and wished to conserve this wealth for future generations by allocating part of the revenue from LKAB to a mineral trust fund. This article investigates the decision-making process that created the LKAB trust fund. We demonstrate that, initially, the Social Democratic government had a dual goal with the LKAB trust fund. On the one hand, it wanted to use the revenue from LKAB to fund applied scientific and technical research to complement research and development within the private sector, thereby aiming to accelerate economic growth. On the other hand, the government were very concerned about the economic development of northern Sweden, where LKAB's mines were located. It wished to reduce the dependence on natural resource exports and to diversify the regional economy by providing capital for investments in the manufacturing industry.
However, the government eventually came to the decision that these disparate goals could only be realized by creating two separate funds. One fund, the so-called Ore fund (Malmfonden) was created to fund applied technical and scientific research. The other fund, the so-called Norrland fund (Norrlandsfonden), was created to provide investment capital for manufacturing industries in northern Sweden. The Social Democratic government had strong political ambitions to develop both these areas. To retain its commitment to national growth, it wanted the state to keep technological development in the economy at a sufficient level. The government also had a growing commitment towards spatial cohesion and began to implement active regional policies in northern Sweden. By stimulating investment in manufacturing industries, it hoped to break what was perceived as long-standing structural problems of regional unemployment and unbalanced outmigration.