Northland Resources has awarded a SEK800m ($125m) contract to Norway-based Peab to construct all civil works for the industrial area of the Kaunisvaara iron ore project in northern Sweden.

Under the contract, Peab will provide detailed engineering, earthworks and foundations.

The scope of the project includes crusher stations, conveyor tunnels, stockpile buildings, mill foundations and the construction of the process plant building, along with truck workshop and a number of smaller buildings.

Kaunisvaara project will exploit magnetite iron ore deposits, feeding a single, multiline processing facility in Sweden.

On completion of the project, the process plant will have an annual capacity of 12Mt of dry iron ore and 5Mt of iron ore concentrate.

Construction of the civil works is scheduled to be completed in the third quarter of 2012.