Swedish mining company LKAB said on Thursday it has discovered a large deposit of rare earth elements in Sweden’s Kiruna region which is the largest known deposit in Europe. LKAB found that mineral resources of rare earth elements in the area exceed 1 million tons of rare earth oxides after a successful exploration stage. This discovery is expected to allow the EU to reduce its dependence on China for the supply of rare earths.
Rare metals are critical to many modern technologies, many of which are relevant to combating climate change. China currently dominates the rare earths market which produce more than 80% of the world’s output and supplies about 95% of Europe’s needs.
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“This is good news, not only for our company, the region and the people of Sweden, but for Europe and the climate as well.” Jan Mostrom, the company’s chief executive, said in a statement. He also added that “It could become an important component in the production of the necessary raw materials, which are critical to achieving a green transition.”
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The company said that it would take time to assess what the deposits contained and it would take at least 10 to 15 years before the raw materials can be delivered to the market.
I want to tell another story when the company said it gonna take at least 10 to 15 years in the market.
Estonia plans to launch a magnet factory this year and plans to start production in 2025. Magnets are very important for National defense equipment and 95% of the EU’s magnets come from China currently.
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Europe remains highly dependent on China for rare earths and powerful permanent magnets made of alloys of rare earth elements which are used in electric cars and smartphones among others. One potential obstacle to the development of rare earth deposits is the relatively high cost of mining operations in European countries. For example, worker wages and working conditions are more challenging as well as there are no subsidies like those offered by the Chinese government.
The EU also estimates that its demand for rare earths will increase five times within a decade. China has even recently threatened to cut off supplies of rare earths to the United States.
Rare earth minerals are also found in the United States, according to a U.S. Department of Defense report, “China has strategically expanded its rare earths into the global market at subsidized prices and discouraged new market entrants.”
Sweden discovers Europe’s largest rare-earth deposit. Will EU achieve self-sufficiency in rare earths now?
A senior person who has managed environmental protection projects in international organizations for a long time believes that it will be a long process from the current stage of the mine to the approval of completion. 10 to 15 years is estimated to be a little bit optimistic.
The deposit may does not have high economic value and China has a global voice and impact in the rare earth market. It is possible that the deposit does not have any market advantage, especially in areas like Northern Europe where labor costs are massively high.
The mining of the mine is more likely to stem from a geopolitical and industrial, national security perspective. There is more demand for it from the EU than from Sweden itself for this deposit.
Europe’s demand for rare earths is expected to increase dramatically due to electrification. According to the European Commission’s assessment, demand for rare earth elements in the field of electric vehicles and wind turbines will expected to increase more than five times by 2030. Europe’s access to get rare earths is largely dependent on imports.
According to the U.S. Geological Survey (USGS) data, the world’s rare earth reserves in 2021 will be 120 million tons with a highly concentrated reserve distribution. About 86.4% of them are concentrated in China, Vietnam, Brazil, Russia, India, Australia, the United States and Greenland.
Sweden intends to continue its efforts to implement the Global Gateway Strategy to enhance global connectivity.