Sweden discovers Europe’s largest known deposit of rare earth metals – DW – 2023-12-01
Sweden’s state mining company stated on Thursday that they have discovered large quantities of rare earth metals.
In a statement, the company said “significant deposits” of rare earths in northern Sweden could make the region the largest known deposit of the minerals in Europe.
LKAB said the area around its giant underground iron ore mine in Kiruna, the largest in the world, contains more than 1 million tonnes of rare earths.
The discovery near Sweden’s northernmost tip could raise hopes that the EU is reducing its dependence on China for elements crucial to a range of modern technologies, many of them linked to fighting climate change. China dominates the rare earth market, producing more than 80% of global production and supplying Europe with around 95% of its supply.
Why are rare earths important?
“This is good news, not only for LKAB, the region and the Swedish people, but also for Europe and the climate,” says Jan Mostrom, CEO of the company, in a statement.
“It can become an important building block for producing the critical raw materials that are absolutely essential to enable the green transition,” he added.
LKAB said it plans to submit an application for an exploitation license in 2023, but added that it would likely take at least 10-15 years before it could start mining the deposit and send it to market.
Sweden’s Industry Minister Ebba Busch said that “electrification, EU self-sufficiency and independence from Russia and China will start in the mine.”
The discovery of rare earth metals is important because these are materials that are essential for the production of electric cars, smartphones and renewable energy systems, among other things.
Contrary to their name, rare earths are found quite abundantly on Earth, entangled with other minerals. They are rare in the sense that they are scattered across the planet in relatively low concentrations, according to mineralogists.
Europe is still heavily dependent on China
Europe remains heavily dependent on Beijing for rare earth metals and the strong permanent magnets made of rare earth alloys used in products such as electric cars and smartphones.
There are believed to be deposits of rare earth metals on the territory of several countries in Europe, but especially in the resource-rich Nordic countries. But there are no working mining and extraction sites.
A potential barrier to exploiting these is the higher relative costs of extractive operations – for example due to better wages and conditions for workers, or Chinese subsidization – in European countries.
Currently, within the EU there is only one separation plant for rare earth metals in Estonia.
China supplies 95% of the EU’s magnets, which are also important for the defense sector. Estonia is planned to launch a magnet factory this yearwith production scheduled to start in 2025.
Once cheap from China, but with rapidly rising prices
The EU is keen to secure its own supplies of rare earths and limit its dependence on China, hoping to learn from the difficulties caused by the sudden curbs on Russian fossil fuel supplies amid EU sanctions following Moscow’s invasion of Ukraine last the year.
“Our dual green and digital transition will live or die by the performance of our supply chains,” said Industry Secretary Busch. “Take China, with its quasi-monopoly on rare earths and permanent magnets and prices have risen by 50-90% in the last year alone. Commodity availability has become a real geopolitical tool. This needs to change. In the short term, we need to diversify our trade, but in the long run we can’t just rely on trade deals. Electrification, EU self-sufficiency and independence will start in the mine.”
Sweden has just taken over the EU’s rotating presidency. And the announcement by the state-owned company coincided with the arrival of the bloc’s commissioners, who visited the country to mark their turn at the helm.
The EU also estimates that the demand for rare earth metals will increase fivefold this decade.
Amid escalating trade tensions with the US, Beijing recently even threatened to cut off rare earth supplies to the US. The minerals are found in the United States, but according to a report by United States Department of Defense“China has strategically flooded the global market with rare earths at subsidized prices, driving out competitors and discouraging new market entrants.”
rm/msh (Reuters, AP)
Correction, January 12, 2023: In an earlier version of this article, the name of LKAB CEO Jan Mostrom was misspelled. DW apologizes for the error.