Thursday 28 / November / 2024
Stockholm: Sweden's state mining company said Thursday it has discovered vast amounts of rare earth minerals.
In a statement, the company said "significant deposits" of rare earths in northern Sweden could make the region that biggest 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, holds more than 1 million metric tons of rare earth oxides.
The discovery near the northernmost tip of Sweden could raise hope of the EU reducing its dependency on China for elements that are crucial to an array of modern technologies, many of them connected to combating climate change. China dominates the rare earths market, producing more than 80% of the global output and providing Europe with around 95% of its supply.
Why are rare earth minerals important?
"This is good news, not only for LKAB, the region and the Swedish people, but also for Europe and the climate," Jan Mostrom, the CEO of the company, said in a statement
"It could become a significant building block for producing the critical raw materials that are absolutely crucial to enable the green transition," he added.
LKAB said it planned to submit an application for an exploitation concession in 2023, but added it would likely take at least 10-15 years before they could begin mining the deposit and shipping to market.
Swedish Industry Minister Ebba Busch said that "electrification, the EU's self-sufficiency and independence from Russia and China will begin in the mine."
The discovery of rare earth elements matters because these are materials essential to 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, tangled up with other minerals. They're rare in the sense that they're sprinkled across the planet in relatively low concentrations, according to mineralogists.
Europe remains highly dependent on China
Europe remains highly dependent on Beijing for rare earths and the strong permanent magnets composed of alloys of rare earth elements that are used in products like electric cars and smartphones.
There are thought to be rare earths deposits on the territory of several countries in Europe, however, particularly in the resource-rich Nordic nations. But there are no working mining and extraction sites.
One potential barrier to exploiting these are the higher relative costs of extraction operations — for instance because of better worker pay and conditions, or Chinese subsidization — in European countries.
Currently, within the EU, there is only one rare earth separation facility in Estonia.
China supplies 95% of the EU's magnets, which are also important for the defense sector. Estonia is slated to launch a magnet plant this year, with manufacturing scheduled to kick off in 2025.
Once cheap from China, but with rapidly rising prices
The EU is keen to secure its own rare earths supplies and to limit its dependency on China, hoping to learn its lessons from the difficulties caused by the sudden limitations on Russian fossil fuel deliveries amid EU sanctions following Moscow's invasion of Ukraine last year.
"Our twin green and digital transition will live or die through the functioning of our supply chains," said Industry Minister Busch. "Take China, with its quasi-monopoly on rare earths and permanent magnets and prices rising by 50-90% in the past year alone. Supply of raw materials has become a real geopolitical tool. This must change. In the short run, we need to diversify our trade, but in the long run we can't rely on trade agreements only. Electrification, the EU's self-sufficiency and independence will begin in the mine."
Sweden has just taken over the EU's rotating presidency. And the announcement from the state company coincided with the arrival of the bloc's commissioners, visiting the country to mark its turn at the helm.
The EU also estimates that demand for rare earths will increase fivefold this decade.
Amid escalating trade tensions with the US, Beijing recently even threatened to cut off supplies of rare earths to the US. The minerals are found in the US, but according to a report by the US Department of Defense
, "China has strategically flooded the global market with rare earths at subsidized prices, driven out competitors, and deterred new market entrants."
