Europe ready to enter the race for rare earth metals after a major discovery in Sweden
Without internal access, a large number of European industries have been dependent on China for rare earths, until now.
That may now be about to change as the Swedish state mining company LKAB announced that it had identified more than 1 million tonnes of rare earth metals in the Kiruna area in the far north.
In announcing the Swedish discovery, LKAB CEO Jan Mostrom said the find was a big win for his country but also for Europe.
“It can become an important building block for producing the critical raw materials that are absolutely essential to enable the green transition,” he added.
It is billed as the largest known such deposit in Europe, but it is more accurate to say that Kiruna is the only significant rare earth element found so far within the European Union.
Two years ago, the European Commission stated that 98% of the rare earth metals used in Europe come from China.
It may take 15 years before mining begins
The European Commission has long listed rare earths on its list of critical metals, given that they are essential to the manufacture of electric vehicles, wind turbines, microphones and portable electronics – and, in the case of europium, necessary to have red as the color on TV and computer screens.
However, LKAB warned that the discovery will not bring immediate relief to Europe and the supply of rare earths, saying it would be “at least” 10 to 15 years before the deposit could be mined and rare earths shipped to the European market.
This caution is fully justified: mining companies outside of China have been looking for rare earths for more than 25 years, and several large deposits in Australia are in advanced stages.
But in these 25 years, only one major new project – Mt Weld is owned by Lynas Rare Earths (ASX: LYC) has entered production.
The next step in advancing the newly discovered Swedish deposit will take place this year when LKAB submits an application for an exploitation concession.
Downstream processing is already in place
Europe also has another trick up its sleeve: unlike the US (and Australia), it has downstream rare earth processing capacity in France.
In addition, Belgium’s Solvay announced in September that it is working on plans to become more involved in the manufacture of rare earth permanent magnets.
This will be done by expanding its existing La Rochelle facility, located on France’s Atlantic coast, to “create a powerful hub for rare earths in Europe,” as the company claimed at the time.
Currently, Europe imports its permanent magnets, but Solvay’s new hub aims to supply European industry with such magnets.
EU seeks rare earth metals from Kazakhstan
Aware of its over-dependence on China for supplies of the 15 rare earths, the EU has also turned to Kazakhstan for supplies.
At the climate summit COP27 in Egypt in November, a new energy agreement was concluded between the EU and Kazakhstan for raw materials, including rare earth metals.
The latest news from Sweden comes on the heels of reports that Japan is about to start mining for rare earths on the seabed, also with the aim of reducing its dependence on China.
After China, Japan is the world’s largest end user of rare earth metals.