Rare earth elements (REE) have become crucial to Europe’s industry, modern technology and the green transition. They are used in batteries, smartphones, wind turbines, electric cars and more. However, Europe is currently entirely dependent on China, which accounts for 95% of REE production. To accelerate the green transition and increase Europe’s self-sufficiency in rare metals, the industry and politics are working on the challenge of increasing the supply of critical minerals. During the seminar “Rare Metals – Great Power Politics, Dependencies and Security Challenges”, David Högnelid, CSO Business Area Special Products at LKAB and Niklas Rossbach, Senior Researcher at Swedish Defence Research Agency (FOI) discussed the complex world of critical minerals with dependencies, security threats and challenges in supply chains.
– The key message for me is that the challenge of increased extraction of rare metals, whether it takes place in Sweden or elsewhere in the world, is primarily a security policy issue rather than a purely economic issue, says Niklas Rossbach.
LKAB’s ore contains critical minerals, such as phosphorus and rare earth metals, but historically it has not been profitable to extract these and therefore it has been treated as mining waste. That situation has now changed.
– We have an opportunity within LKAB. We have existing mines where we mine iron ore and are now investing in new technology, new infrastructure and new process technology where we can extract phosphorus for mineral fertiliser and rare earth metals for electrification. We have an opportunity to provide Europe with the material needed for the transition, says David Högnelid.
A new era of the rare metal
Rossbach compares REE’s strategic importance to that of oil in the 20th century. Back then, oil was perhaps the most crucial strategic resource needed in the industry, from the defence industry to making the car industry run. Today, critical minerals are that resource.
– Our dependence on imports of rare earth metals is central to perhaps the most important industry in Europe, the automotive industry. But also, in order to enable the electrification and the green transition. In a situation where there is a shortage of supply, we might also experience conflicts over materials, which we can already see, says David Högnelid.
– We are in a new era, globally and in terms of security policy. We have become accustomed to trading and cooperating globally. Now we see that a classic security policy issue has returned, in that there are strong nations with access to raw material, such as China and Russia, who want greater influence, perhaps on their own terms. This means they can also use other means in negotiations, says Niklas Rossbach.
Security policy and Swedish extraction
Rare metals have security policy value and can affect international relations. In a time of increased geopolitical tension, Rossbach emphasises the importance of ensuring access to rare metals.
– If Sweden extracted more of the rare metals that we have access to, it would increase the global supply. It would become a less strategic resource in that they would be easier to secure, even if they were more expensive to extract in Sweden than in China as we have stricter sustainability and environmental legislation. It would also make the world a more stable with increased extraction. And Sweden would thus also show solidarity with friends, partners and allies. At the same time, it would make Sweden more strategically significant and important to defend, says Niklas Rossbach.