Sweden discovers the largest deposit of rare earths in the EU

Sweden’s state mining company LKAB has announced that it has discovered Europe’s largest deposit of rare earth metals. The discovery bolsters the continent’s push to reduce reliance on imported commodities needed for the green transition.

The deposit, named Per Geijer, is located north of the Arctic Circle in the Swedish province of Lapland and contains more than 1 million tonnes of rare earth oxides – the largest known deposit of its kind in Europe, according to the company.

Speaking at the company’s existing iron ore mine in Kiruna – itself the largest in the EU – CEO Jan Moström said it would be a few more years to determine what the deposit contained. “We have ongoing exploration activity at this deposit, which means to us that it’s open, it’s not closed – we don’t actually know how big it is,” he added in a news conference.

Mostrom highlighted the regulatory challenges ahead as the company seeks to capitalize on the discovery. “If we’re really going to drive the green transition, we need to find ways to accelerate that process quite significantly.”

Rare earth deposits are – contrary to their name – quite common in different regions, but extracting the minerals is the hardest part due to the complex processing and intense environmental exposure.

It would take 10 to 15 years before the raw materials could be brought to market, Mostrom said, but if permitting processes at the Swedish and EU levels could be speeded up, that timeframe could be cut by more than 50 percent. The company plans to apply for an exploitation license before the end of this year.

Currently, more than 80 percent of the world’s rare earth processing capacity is in China, and the EU predicts that demand for the metals, used in electric car motors and wind turbines, will increase fivefold by 2030.

The mining company’s announcement was made during a visit by European Commissioners to Kiruna during the opening days of Sweden’s six-monthly rotating EU Council Presidency.

The EU has put the pursuit of greater resource self-sufficiency high on its agenda as it seeks to reduce its dependence on China and Russia and underpin its ambitions to boost domestic green technologies, including wind and car batteries.

The European Commission is working on plans to remove regulatory barriers to the mining and production of critical materials such as lithium, cobalt and graphite needed for wind farms, solar panels and electric vehicles.

The work has gained urgency amid a standoff with the US over its $369 billion Inflation Reduction Act, which offers huge industry subsidies to boost green technology in the US.

The US program has sparked fears of an exodus of green investment from the EU across the Atlantic, compounded this week by Belgian Prime Minister Alexander De Croo, who lamented “aggressive” US efforts to woo EU companies.

Some member states are skeptical about how far the EU can go to reduce its reliance on imported raw and refined materials amid regulatory obstacles, and stress the need to stick to a free trade agenda aimed at striking deals with mineral-rich continents like the South America.

Valdis Dombrovskis, trade commissioner, has stressed the need to expand the union’s web of free trade agreements, pointing to Chile and its vast reserves of lithium as the EU seeks to sign a deal to update a 2002 agreement. The EU also wants an agreement with Australia, another commodity giant, by next summer.

“Having a broad network of FTAs ​​is a source of diversification and therefore a source of resilience,” Dombrovskis told the Financial Times last year.

Northern Sweden is home to one of the largest green industrialization projects in the world, as several large battery and steel factories tap into the region’s surplus renewable energy. The resulting investment rush has made the region a booming area as companies like Northvolt, Facebook and H2 Green Steel have settled there.

But the amount of energy required for the projects is enormous: LKAB’s plans to produce the carbon-free sponge iron needed for steel alone will consume a third of Sweden’s electricity resources.

Additional reporting by Richard Milne in Oslo

https://www.ft.com/content/78706a10-7ea6-445e-835c-ad8dd51b6a34 Sweden discovers the largest deposit of rare earths in the EU

Adam Bradshaw

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