Europe poised to enter rare earths race after major discovery in Sweden
With no internal supply, vast numbers of European industries have been reliant on China for rare earths, until now.
That may now be on the way to changing with the announcement by the Swedish state-owned mining company LKAB that it has identified more than 1 million tonnes of rare earth oxides in the Kiruna area located in the country’s far north.
In announcing the Swedish discovery, LKAB chief executive officer Jan Mostrom said the find was a big win for his country but also for Europe.
“It could become a significant building block for producing the critical raw materials that are absolutely crucial to enable the green transition,” he added.
It is being billed as the largest known such deposit in Europe, but it’s more accurate to say that Kiruna is the only significant rare earths find so far within the European Union.
Two years ago, the European Commission stated that 98% of the rare earths used in Europe were sourced from China.
It could be 15 years before mining begins
The European Commission has long listed rare earths elements on its critical metals list given that they are vital for the manufacture of electric vehicles, wind turbines, microphones and portable electronics — and, in the case of europium, necessary for having red as a colour on television and computer screens.
However, LKAB did caution that the discovery will not provide immediate relief for Europe and the supply of rare earths, saying that it would be “at least” 10-to-15 years before the deposit could be mined and rare earths shipped into the European market.
That caution is fully justified: mining companies outside of China have been exploring for rare earths for more than 25 years, and several large deposits in Australia are in the advanced stage.
However, in that 25 years, only one major new project — Mt Weld owned by Lynas Rare Earths (ASX: LYC) has come into production.
The next stage in advancing the newly found Swedish deposit will take place this year with LKAB submitting an application for an exploitation concession.
Downstream processing already being put in place
Europe also has another trick up its sleeve: unlike the US (and Australia), it has downstream processing capacity for rare earths in France.
Moreover, in September Belgium’s Solvay announced it was working on plans to get further involved in manufacturing of rare earth permanent magnets.
This will be done by expanding its existing La Rochelle plant, located on the Atlantic coast of France, to “create a powerful rare earths hub in Europe”, as the company claimed at the time.
At present, Europe imports its permanent magnets, but Solvay’s new hub is aimed at supplying European industries with such magnets.
EU seeking rare earths from Kazakhstan
Aware of its over-reliance on China for supplies of the 15 rare earths elements, has also cause the EU to turn to Kazakhstan for supplies.
At the COP27 climate change summit in Egypt in November, a new energy agreement was sealed between the EU and Kazakhstan for raw materials, including rare earths.
This latest news from Sweden comes on the heels of reports that Japan is about to start mining for rare earths on the seabed, also aimed at lessening its dependence on China.
After China, Japan is the world’s largest end user of rare earths.