The Swedish state mining company said in a statement that it had discovered massive amounts of rare earth minerals on Thursday.
The company said the “large deposits” of rare earths in northern Sweden could make the area the largest known deposit of the mineral in Europe.
LKAB said the area around its giant underground iron ore mine in Kiruna, the world’s largest, contains more than 1 million metric tons of rare earth oxides.
The discovery near the northern tip of Sweden could raise hope that the European Union will reduce its dependence on China for components needed for a range of modern technologies, many of which are linked to combating climate change. China dominates the rare earth element market, producing more than 80% of global production and providing Europe with about 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,” Jan Monström, CEO of the company, said in a statement. statment.
“It can become an important building block for the production of raw materials that are so critical to enabling the green transition,” he added.
LKAB said it plans to apply for an exploitation concession in 2023, but added that it will likely be at least 10-15 years before they start mining the deposits and shipping to market.
Swedish Energy, Business and Industry Minister Ebba Bosch said that “electrification and self-sufficiency for the European Union and independence from Russia and China will begin at the mine”.
The discovery of rare earth elements is important because they are essential materials for the production of electric cars, smartphones, and renewable energy systems, among other things.
Contrary to its name, rare earths are found in abundance on Earth, intertwined 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 very dependent on China
Europe still relies heavily on Beijing for rare earths, powerful permanent magnets made of alloys of rare earth elements that are used in products such as electric cars and smartphones.
It is believed that there are rare earth deposits on the territory of many countries in Europe, especially in the resource-rich Nordic countries. But there are no working mining and extraction sites.
One potential barrier to exploiting these is the high relative costs of extraction operations – for example due to better wages and conditions for workers, or Chinese subsidies – in European countries.
Currently, within the European Union, there is only one rare earth separation facility in Estonia.
China provides 95% of the EU’s magnet, which is important for the defense sector as well. Estonia Magnet Factory is scheduled to be launched this yearManufacturing is scheduled to begin in 2025.
Once cheap from China, but with prices rising rapidly
The European Union is keen to secure its rare earth supplies and reduce its dependence on China, hoping to learn its lessons from the difficulties caused by sudden restrictions on shipments of Russian fossil fuels amid EU sanctions in the wake of Moscow’s invasion of Ukraine.
“Our twin green and digital transformation will live or die by the functioning of our supply chains,” said Swedish Energy Minister Bosch. “Take China, with its near monopoly on rare earths and permanent magnets and price hikes of 50-90% in the last year alone. The supply of raw materials has become a real geopolitical tool. This must change. In the short term we need to diversify our trade, but in the long term Long we can not rely on trade agreements only. Electricity and self-sufficiency of the European Union and its independence will begin in the mine.
Sweden has just assumed the rotating presidency of the European Union. The announcement of the state-owned company coincided with the arrival of the conglomerate commissioners to visit the country, marking its turn at the helm.
The European Union also estimates that demand for rare earths will increase fivefold this decade.
Amid rising trade tensions with the United States, Beijing recently threatened to cut off supplies of rare earths to the United States. The minerals were found in the United States, but according to a report by PentagonChina has strategically flooded the global market with rare earth elements at subsidized prices, driving out competitors, and discouraging new entrants to the market.
rm/msh (Reuters, AP)