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The European Union wants to reduce its dependence on Russian fossil fuels while accelerating its efforts to reduce CO2 emissions. Metals and critical raw materials will play a key role. Minerals, especially lithium, are most needed for clean energy technology. Relevant mining operations are concentrated in Asia, Oceania and South America.
Finland and Sweden, the two European countries currently applying for NATO membership, have a long mining tradition and could help solve the EU deficit, but questions remain.
“We are the most important mining countries in the EU. Sweden alone produces over 90% of all iron ore produced in the EU,” Maria Suner, CEO of Sweden’s Mines, Minerals and Metals Producers (Svemin), told DW. But it is just a little over one a quarter of what the bloc needs, which means the EU still has to import 70% of its iron ore, she added.
Finland and Sweden also share the mineral-rich Fennoscandian bedrock. According to Suner, the solid stone under the Scandinavian and Kola Peninsulas has the potential to provide everything on the EU’s list of critical raw materials.
The European Commission compiled a list of critical raw materials (CRM) in 2011. Economic value and supply risk are the two criteria used to determine the importance of materials. The list gets longer.
The EU’s dependence on Chinese rare earth metals is enormous, but there is little the bloc can do about it in the short term.
Russia and security of supply
Russia’s invasion of Ukraine is the main reason for Finland and Sweden to apply for NATO membership, and without a doubt, to intensify mining operations in the medium term.
Svemin’s CEO says that the focus on mining increased due to the covid pandemic and subsequent disruptions in the supply chain, but more so after Russia invaded Ukraine. This has increased demand and pushed commodity prices to a new peak.
China is the leading manufacturer of graphite and rare earth metals. According to data from the International Energy Agency, it also processes 87% of the rare earth metals, 65% of cobalt, 58% of lithium and 35% of nickel. Russia is the second most important country in the world for nickel mining and the third most important for cobalt mining.
“If there is more support for mining in Europe, I do not see it as a result of the Russian hostilities. It is rather a question of whether Europe has woken up to the fact that it lacks metals,” said Pekka Suomela, executive director of the Finnish Mining Association ( FinnMin), told DW.
Current obstacles
Land competition is always an issue in the Nordic region with a focus on forestry. Increased mining is opposed by many environmentalists, who cite the need to protect biodiversity.
In March, when the Swedish government allowed the exploitation of the Scandinavian country’s largest unexploited iron ore deposit, the Swedish climate protection activist Greta Thunberg and the movement Fridays for Future said that Sweden “is waging a war against nature”.
Finland, Norway and Sweden are the least densely populated countries in Europe, which in theory could be a plus for mining. Nevertheless, many sparsely populated areas are protected.
– Almost half of the Swedish territory is reindeer herding area for the Sami, the only indigenous people in Europe, says Suner. “But the area needed for mining is very limited and we know how to minimize the impact.”
Strange time frame
Within the EU, it can take up to 25 years from the exploration phase to the start of commercial mining. Svemin has proposed 27 reforms, including shortening the permit procedures. Concerns about the environmental impact in the medium term often clash with long-term efforts to reduce carbon dioxide emissions.
While EU member states are responsible for mining legislation, Brussels deals with aspects related to health, water and land use.
The current geopolitical situation may increase social acceptance, but caution is required. According to Suomela, the EU must be careful not to put too much pressure on any individual country to avoid local opposition that could easily change public opinion.
Another possible future obstacle has to do with energy prices. They are still quite moderate in northern Sweden and Finland, well below the levels reached in Central Europe. But an increase in mining operations requires consistent investments in energy resources.
“The mineral and mining sector plans for a tenfold increase in electricity use by 2050,” Suner commented. “In addition, we have other projects for battery production and fossil-free steel production. Such projects are not covered by the electricity production we have in Sweden today.”
New mining projects are often opposed by local people and environmental activists in Sweden and Finland
Neighboring countries
Estonia, another country bordering Russia, is active in the cleantech supply chain and hosts the only commercial rare earth metal processing plant in Europe. The plant is owned by Toronto-based technology company Neo Performance Materials for rare earth metals. The company launched an initiative in 2020 to expand the range of rare earth metals to their Sillamae processing plant near the Gulf of Finland.
Constantine Karayannopoulos, Neo’s President and CEO, told DW that the war in Ukraine prompted refiners to take a closer look at their global supply chains. “Neo is no exception,” he explained, recalling that its supplier in Kola, the Russian peninsula, had been a reliable supplier for over 40 years.
“Geopolitical considerations are always a factor, but our primary driving force is still customer demand,” says Karayannopoulos.
Right now, it looks like demand will increase. According to the European Association of Metals (Eurometaux), lithium use in pure technology could increase by a staggering 2,109% by 2050. Demand for dysprosium, tellurium and scandium is expected to more than double over the next 30 years.
Edited by: Hardy Graupner