The discovery of Europe’s largest known deposit of rare earth elements in northern Sweden was hailed last week as a win for the bloc’s green transition that could help curb the EU’s reliance on China for critical raw materials.
But significant hurdles — from boosting refining capacity to red tape to dealing with angry reindeer herders — stand in the way of the find being turned into a going concern.
China currently provides nearly 98 percent of the EU’s supply of the rare earth minerals it needs to build green transition technologies. Russia is also a key supplier of metals like palladium, titanium, platinum and aluminum.
The announcement by Swedish mining company LKAB that it found a deposit of more than 1 million tons of rare earth oxides was seen as a key step in helping the bloc diversify its supply.
“The EU’s self-sufficiency and independence from Russia and China will begin in the mine,” Sweden’s Energy, Business and Industry Minister Ebba Busch said following Thursday’s announcement.
But Europe can’t mine its way out of reliance on China without also ramping up its refining and production capacity, said Marie Le Mouel, an affiliate fellow at the Bruegel think tank.
“There’s more of a dependency on Chinese manufacturing than on the actual materials that go into these components,” Le Mouel said, adding that she expects “large parts” of the mined Swedish deposit to end up being exported outside the EU for refining.
China accounts for 85 percent of rare earth processing worldwide. About 98 percent of the EU’s rare earth permanent magnets — used in things like electric motors of battery-powered cars — are imported from China.
There are “many, many intermediate steps between these raw materials and the installation of green technologies,” said Le Mouel, cautioning against claims that the Swedish discovery is “good news for Europe’s autonomy.”
But LKAB’s President and CEO Jan Moström insists that his company’s recent investment in Norwegian-based rare earths manufacturer REEte will create “the base for a strong and sustainable Nordic value chain for rare earth metals.”
REEtec’s second factory, which will also be able to process material from LKAB, is planned for 2026.
Brussels is aware of the challenge: As part of its forthcoming Critical Raw Materials Act, expected in March, the Commission is expected to outline how to subsidize not only production, but also processing and strategic storage reserves of critical raw materials within the bloc.
Miners and herders
Before LKAB can tap the new resource, it also needs to undergo a permitting procedure that could last 10 to 15 years. In a first step, it now has to apply for an exploitation concession to be able to investigate the deposit further, as well as the conditions for mining.
Moström has called on Brussels to use its upcoming critical raw materials rules to speed up the process, arguing that access to the minerals is “a crucial risk factor for both the competitiveness of European industry and the climate transition.”
Opening a new mine will also have to be balanced against other interests, such as nature conservation goals and the rights of the Sami indigenous community, who herd reindeer in the northern region.
LKAB, which already runs the world’s largest underground iron ore mine in the area, has been “mining in Kiruna for more than 120 years, coexisting with the two closest Sami reindeer organizations Gabna and Laevas,” said LKAB spokesperson Anders Lindberg. He said the company has a track record of “minimiz[ing] the impact on local environment and interests” and compensating for any impact that does occur.
Lindberg said that mining the new deposits will likely affect the herders “but it is too early to tell exactly in what way, as we have yet not decided the mining method,” adding that the company is in “close dialogue” with the Sami to allow reindeer herding to continue.
One advantage of the deposit’s location is that the company can use “existing infrastructure for the Kiruna mine, meaning we do not need to build new railroad, power lines and industrial areas as we would have if the finding was in a remote and untouched piece of land.”
In a statement to public broadcaster SVT, the Swedish Sami National Confederation and Gabna Sami village said that “LKAB’s constant expansion of mining and ore transport is at the expense of the Sami’s ability to practice and preserve their culture.”
