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  • Writer's pictureLauren Rosenthal

Sweden’s Rare Earth Metal Jackpot: The Key to EU Energy Independence?


Written By: Lauren Rosenthal

Edited By: Vanessa Lu Langley


Lithium and rare earth metals are the new oil and gas. Essential for the production of technological products ranging from smartphones to wind turbines, demand for these materials in the European Union is expected to explode fivefold by the year 2030 (Chatterjee, 2023). In spite of the increasing recognition of their importance, the EU has fallen behind on rare earth metals mining and processing, remaining almost entirely reliant on imports to satiate the rising demand. Given these circumstances, Sweden’s recent, seemingly game-changing discovery might be just what the EU needs. On January 12th, 2023, it was announced that Europe’s largest deposit of rare metals had been located in northern Sweden. The news has garnered a range of reactions, with many excited and others less so, both worldwide and across industries.

Discovered by Swedish mining company LKAB, the deposit consists of over one million tonnes of rare earth oxides near the city of Kiruna, Sweden’s northernmost town and home to one of the world’s largest iron mines (Nikel, 2021). While the exact chemical makeup of the deposit currently remains unknown, LKAB has revealed that the materials found therein will be used to produce neodymium and praseodymium, two elements essential to the production of heavy-duty, heat-resistant magnets that are integral to technologies such as electric vehicles, wind turbines, and other green technologies (NPR, 2023).


Location of the deposit relative to Kiruna. Source: LKAB


Given their potential applications in a large variety of renewable technologies, rare earth metals have been identified as an integral component of the energy transition. It is estimated that in the next 3 decades, more heavy metals will be needed than have been mined in the past 70,000 years combined (Glenny, 2022, 1:58). However, the current global availability of rare earth metals is far from balanced; China and, to a lesser extent, parts of Southeast Asia, dominate mining and processing, with China alone comprising 60% of the industry (He, 2023, Ekblom, 2023). On the other hand, the EU’s rare earth oxides industry lags much further behind, leaving its nations almost completely reliant on imports from China, and to a lesser extent, Russia, with no mining currently taking place on the continent. Hence, within hours of the announcement, the energy world was abuzz over the potential significance of the discovery both for Europe and for the climate at large.


The EU has established lofty plans to build a green economy and become a major player in the renewable energy sector in the coming years (Ekblom, 2023), but has failed thus far to develop its rare earths industry in order to keep pace with its ambitions. The deposit in Sweden would provide Europe with the materials it will need to build electric vehicles, electronics, and clean energy for the future. And while the deposit’s potential contributions to green technology and decarbonization appear to be endless, the scope of the conversation surrounding it reaches far beyond potential climatic benefits alone. At its very center is the hope for energy independence in a rapidly-evolving energy landscape, particularly because this is all happening on the heels of the European energy crisis prompted by the war in Ukraine. As was explained by British journalist Misha Glenny, “We’ve seen what overdependency on a hostile supplier means since the Russo-Ukrainian war. Can the EU or indeed anyone expect to maintain their global political influence if China holds the keys to future progress?” As long as the EU cannot supply its own resources to build the renewable future it is envisioning, China remains capable of leveraging its position as “climate saviour” (Glenny, 2022, 9:32). Given that demand for rare earth metals is set to rise and political tensions between the EU and China have continued in the same direction, the Swedish supply may be the key to the EU’s predominance in the renewables sphere and its self-sufficiency.


Although certain circles abound with optimism about the deposit’s geopolitical and sustainability implications, it has also been emphasized that it is too early to truly deduce just how useful it will be in Europe’s energy transition. Concerns surrounding the quality of the reserve, the timeline needed to extract from it, the environmental risk involved, and the potential impacts on communities living near the deposit remain major unknowns.


According to Julie Klinger, professor of geography at the University of Delaware, it is first important to “look at the data” in terms of the quantity of rare earths that Europe is truly dealing with. She warns about the tendency for hyperbole when such deposits are discovered, citing numerous deposits from discoveries past that have all initially claimed to be the largest or one of the largest and stressing the importance of verification. Similar warnings can be made regarding the quality of the deposit, as there is no information as of yet about the quality of the ore, and a great deal of testing and drilling must take place before any definitive claims can be made. Given that Europe has an extremely stringent regulation process for mining, which already plays a role in the current local shortage, this might take over a decade to come to fruition (Sullivan, 2023).

The timeline concerns do not just pose limits to the speed at which information can be ascertained about the deposit. They may prohibit any climate goals that hinge upon the rare earths altogether. Time is famously of the essence for the building of new green technologies, but extraction is not a process that happens quickly. Although the EU is currently working on relaxing the restrictions on mining and processing in the interest of the energy transition, it remains to be seen how quickly any changes will actually materialize. In addition to the mining itself to obtain the supply, there is still the need to establish an entirely new processing industry in Europe in order to isolate and refine rare earth metals (Sullivan, 2023). It might take up to sixteen years to see the industry up and ready to go, which already takes the EU beyond its self-imposed 2030 deadline to reduce its emissions by 55% compared to 1990s levels (Glenny, 2022, 11:00).


A further complication to the situation is the need to weigh the environmental benefits to obtaining these raw materials more easily with the potential environmental harms of initiating a new, large scale mining operation at this stage. Rare earths have numerous applications besides renewable technologies, such as petroleum refining and military technologies. There is currently no legal mechanism that can prevent the use of rare earths that were mined “in the name of climate change” by other industries that are likely to exacerbate climate change (Sullivan, 2023). In addition, it is not only the end-products that pose a risk, but the mining process itself. Part of the reason behind the lengthy approval process is the potential impacts of major projects on water resources and biodiversity in the region (Reuters 2023). Mining rare earths requires digging massive open pits that, if not sufficiently supervised, can produce acidic wastewater ponds with heavy metals and radioactive materials that can leach into the groundwater. Such wastewater has also historically proven harmful to human health, increasing the risk of lung and pancreatic cancers (Gramling, 2023).


The human element is the final and most complex consideration involved in the LKAB deposit. The town of Kiruna, located near the deposit, has already experienced major disruptions as a result of the large LKAB iron mine, being forced to move to a different location due to compromised ground stability. Furthermore, the town’s historic routes have been cross-cut by roads and train tracks, which is of particular concern to the Sàmi population, who are indigenous to Sweden and have subsisted mainly from reindeer herding for hundreds of years. The mining in the area has already interrupted their migration routes and complicated reindeer movement, and the LKAB deposits, if exploited, would only worsen the situation. The new mine would effectively cut their land in two, making it impossible to herd reindeer and threatening their livelihood (Frost, 2023).


Although the potential for European energy independence from China and Russia is significant, the LKAB rare earths deposit poses a difficult situation for decision-makers. It represents a textbook example of the environmental, social, and economic complications involved in attempting to develop sustainably while satisfying all parties involved, despite their interests often being at odds with one another. The deposit may well present an incredible opportunity for Europe and its energy transition, but it is clear that great care must be taken to ensure that any exploitation is done as mindfully as possible, and only after considering all of the potential downsides and risks. As of now, with so little information available, only time will tell how the project will evolve.


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References:


Chatterjee, P. (2023, January 12). Huge rare earth metals discovery in Arctic Sweden. BBC News. https://www.bbc.com/news/world-europe-64253708


Ekblom, J. (2023, January 12). Largest Rare Earth Mineral Deposit in Europe Discovered in Arctic Town of Kiruna - Bloomberg. Bloomberg. https://www.bloomberg.com/news/articles/2023-01-12/swedish-miner-finds-europe-s-largest-rare-earth-deposit#xj4y7vzkg


Frost, R. (2023, February 11). What Sweden’s rare earth discovery means for Sámi communities. Euronews. https://www.euronews.com/green/2023/02/11/mining-europes-biggest-rare-earth-deposit-could-make-life-impossible-for-sami-communities


Glenny, M. (2022). The EU’s dependency on China (No. 4). Retrieved January 15, 2023, from https://www.bbc.co.uk/sounds/play/m001cf27


Gramling, C. (2023, January 11). Rare earth mining may be key to our renewable energy future. But at what cost? //www.sciencenews.org/article/rare-earth-mining-renewable-energy-future


He, L. (2023, January 13). Sweden finds the largest rare earth deposit in Europe. It could help cut dependence on China | CNN Business. CNN. https://www.cnn.com/2023/01/13/tech/sweden-biggest-rare-earth-mine-china-dependence-intl-hnk/index.html


Nikel, D. (2021, March 23). Kiruna: A Mining Town On The Move In Northern Sweden. Forbes. https://www.forbes.com/sites/davidnikel/2021/03/23/kiruna-a-mining-town-on-the-move-in-northern-sweden/


NPR. (2023, January 13). Rare earth minerals deposit found in Sweden. NPR. https://www.npr.org/2023/01/13/1149135808/rare-earth-minerals-deposit-found-in-sweden


Reuters. (2023, January 13). Sweden’s LKAB finds Europe’s biggest deposit of rare earth metals. Reuters. https://www.reuters.com/markets/commodities/swedens-lkab-finds-europes-biggest-deposit-rare-earth-metals-2023-01-12/


Sullivan, A. (2023, January 13). Rare earths find in Sweden: A gamechanger? DW. https://www.dw.com/en/explainer-what-the-rare-earths-find-in-sweden-might-mean-for-the-eu/a-64375644


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