Sweden discovers the largest deposit of rare earth metals in the EU
Sweden’s state mining company LKAB has said it has discovered Europe’s largest deposit of rare earths north of the Arctic Circle. The discovery strengthens the continent’s ambition to rely less on imported raw materials needed for the green transition.
The deposit, called Per Geijer, is located in the Kiruna area of northern Sweden, in the province of Lapland, and contains more than 1 million tonnes of rare earth oxides – the largest known deposit of its kind in Europe, the company said.
Speaking at the company’s existing iron ore mine in Kiruna – itself the largest in the EU – CEO Jan Moström said it would take several years to determine what the deposit contained. “We have ongoing exploration activities in this deposit, which means to us it’s open, it’s not closed – we don’t actually know how big it is,” he added at a news conference.
Moström emphasized the regulatory challenges facing the company as it tries to capitalize on the discovery. “If we really want to continue the green transition, we need to find ways to significantly accelerate this process.”
Rare earth deposits are – contrary to their name – quite common in different geographies, but it is the extraction of the minerals that is the most challenging part due to complex processing and intense environmental effects.
It would take 10 to 15 years before the raw materials could be delivered to the market, Moström said, but if permitting processes at the Swedish and EU level can be accelerated, this timescale can be reduced by upwards of 50 percent. The company plans to submit an application for an exploitation concession this year.
Currently, more than 80 percent of the world’s rare earth processing capacity is in China, and the EU predicts that demand for the metals used in electric car engines and wind turbines will increase fivefold by 2030.
The mining company’s announcement came when EU commissioners visited Kiruna during the opening days Swedensix-month rotating EU presidency.
The EU has provided the driving force for greater self-sufficiency in raw materials top of its agenda as it tries to curb its reliance on China and Russia and bolster its ambitions to boost homegrown green technologies including wind and car batteries.
The European Commission is working on plans to lower regulatory barriers to the mining and production of critical materials such as lithium, cobalt and graphite, which are needed for wind farms, solar panels and electric vehicles.
The work has gained more urgency amid a standoff with the United States over its $369 billion Inflation Reduction Act, which offers huge industrial subsidies aimed at boosting green technology in the United States.
The US system has sparked fears of an exodus of green investment from the EU across the Atlantic, reinforced this week by Belgian Prime Minister Alexander De Croo, who complained about “aggressive” US efforts to woo EU companies.
Some member states are skeptical of how far the EU can go to reduce its reliance on imported raw and refined materials given the regulatory hurdles, stressing the need to stick to a free trade agenda aimed at unlocking deals with mineral-rich continents such as the South America.
Valdis Dombrovskis, the trade commissioner, has stressed the need to widen the Union’s network of free trade agreements, pointing to Chile and its large reserves of lithium, as the EU seeks to sign a deal updating a 2002 deal. The EU also wants a deal with Australia, a another raw material power plant, for next summer.
“Having a broad network of free trade agreements is a source of diversification and thus a source of resilience,” Dombrovskis told the Financial Times last year.
Northern Sweden is home to one of the largest green industrialization projects in the world as several large battery and steel factories utilize the region’s surplus of renewable energy. The resulting rush of investment has turned the region into a boom area as companies such as Northvolt, Facebook and H2 Green Steel have moved there.
But the amount of power needed for the projects is enormous: LKAB’s plans to produce carbon-free sponge iron needed for steel will only take up a third of Sweden’s electricity resources.
Additional reporting by Richard Milne in Oslo