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22/06/2024
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Securing Europe’s rare metal supply: Sweden’s strategic contribution

As Europe endeavors to achieve its climate and sustainability objectives while reducing dependence on a single dominant power, particularly in the realm of rare metals, Sweden emerges as a pivotal player. European Commission President Ursula von der Leyen underscored the increasing importance of lithium and rare earth metals in her 2022 State of the European Union address, signaling the imperative for the bloc to recalibrate its approach to critical mineral supply chains with a geostrategic mindset.

Against the backdrop of global efforts to mitigate reliance on China, Europe is reevaluating the significance of mining and mineral processing. The proposal for the European Critical Raw Materials Act, presented by the European Commission in March 2023 and subsequently approved by the European Parliament, reflects a concerted effort to establish a regulatory framework for the secure and sustainable supply of critical raw materials.

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The burgeoning demand for rare metals, essential for digital advancement, security, and the transition to a green economy, underscores the strategic significance of these resources in the context of great power competition, particularly between China and the United States. As tensions escalate over defense and economic policies, the risk of a resource war for critical raw materials looms large, with the International Energy Agency projecting a substantial increase in demand for various critical metals and minerals in the coming decades.

Currently, the European Union relies heavily on imports of rare metals from China, posing environmental, health, and sustainability concerns. The European Union has identified rare earth metals as being at risk of scarcity, prompting a reevaluation of sourcing strategies. While China remains the dominant supplier, significant deposits of rare earths exist outside its borders, including in Greenland, a territory with vast potential.

Sweden, with its historical legacy in rare earth metals and ongoing initiatives in the sector, emerges as a promising alternative to China. Projects such as Norra Karr in Sweden’s northern reaches offer economically viable and environmentally sustainable sources of rare earth metals. However, the road to mining and extracting these resources is fraught with challenges, including regulatory hurdles, technical complexities, and anti-mining sentiments.

Moreover, securing access to rare earth deposits is only the initial step in mitigating supply risks. The European Union must develop robust processing capabilities to reduce dependence on China for downstream manufacturing processes, where it currently holds a dominant position.

China’s strategic control over rare earths, coupled with its history of export restrictions and geopolitical maneuvering, poses significant risks for Europe’s strategic autonomy and security. Export bans and controls on critical materials could disrupt European industries, particularly in sectors such as automotive and renewable energy.

In navigating these challenges, Europe faces a critical choice between continued reliance on legacy supply chains, exposing itself to geopolitical vulnerabilities, or pursuing diversification efforts to establish alternative sources and processing capabilities. Such diversification efforts would not only mitigate supply risks but also contribute to the development of a more resilient and sustainable European economy.

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