Sweden discovers Europe’s largest known rare earth deposit – DW – 01/12/2023

Sweden’s state-owned mining company discovered a large amount of rare earth minerals on Thursday, it said.

The company said that “significant deposits” of rare earths in northern Sweden could make the region the largest known mineral deposit in Europe.

LKAB said the area around the giant underground iron ore mine in Kiruna, the world’s largest, contains more than 1 million metric tons of rare earth oxides.

The discovery in Sweden’s northernmost tip could raise hopes that the EU will reduce its dependence on China for elements essential to a range of modern technologies, many of which are linked to the fight against climate change. China dominates the rare metals market, producing more than 80% of global output and supplying Europe with about 95% of the 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,” said company CEO Jan Monstrom..

“This can become an important building block for the production of critical raw materials that are absolutely essential to ensure the green transition,” he said.

LKAB said it planned to submit an application for an exploitation concession in 2023, but added that it would take at least 10 to 15 years before the field could start producing and sending the field to market.

Sweden’s energy, business and industry minister Ebba Bush said that “mining electrification, EU self-sufficiency and independence from Russia and China will begin.”

The discovery of rare earth elements is important because they are essential materials for the production of electric cars, smartphones and renewable energy systems.

Contrary to their name, rare earths are found quite abundantly on Earth mixed with other minerals. According to mineralogists, they are rare in the sense that they are sprinkled across the planet in relatively low concentrations.

Europe remains highly dependent on China

Europe remains highly dependent on Beijing for rare earths and powerful permanent magnets, which are alloys of rare earth elements used in products such as electric cars and smartphones.

A number of European countries, especially the Nordic countries, which are rich in natural resources, are thought to have rare earth deposits. But there are no working mining and extraction sites.

One potential barrier to using them is the higher relative costs of extractive operations in European countries – for example due to better wages and conditions of workers or Chinese subsidies -.

There is currently only one rare earth separation facility in Estonia within the EU.

China supplies 95% of the EU’s magnets, which is also important for the defense sector. Estonia plans to start a magnet plant this yearproduction is scheduled to begin in 2025.

It was once cheaper than China, but with rapidly increasing prices

The EU hopes to learn from the difficulties caused by Russia’s sudden restrictions on fossil fuel supplies amid EU sanctions following Moscow’s intervention in Ukraine, seeking to secure its rare metals reserves and limit its dependence on China.

“Our twin green and digital transitions will live or die by how our supply chains work,” said Swedish Energy Minister Bush. “Take China, which has a quasi-monopoly on rare earths and permanent magnets, and prices have risen 50-90% in the last year alone. Supply of raw materials has become a real geopolitical tool. This has to change. In the short term, we need to diversify our trade, but in the long term, we can only rely on trade agreements. We don’t know. Electrification, EU self-sufficiency and independence will start in mining.”

Sweden has just taken over the rotating presidency of the EU. And the announcement of the state-owned company coincided with the arrival of the bloc’s commissioners in the country to mark their turn at the helm.

The EU also estimates that demand for rare earths will increase fivefold this decade.

Amid rising trade tensions with the United States, Beijing recently even threatened to cut off supplies of rare metals to the United States. Minerals are found in the United States, but according to a report by the US Department of Defense“China has strategically flooded the global market with rare earths at subsidized prices, driving out competitors and deterring new entrants.”

rm/msh (Reuters, AP)

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