KIRUNA, Sweden/STOCKHOLM (Reuters) -Swedish state-owned mining company LKAB on Thursday said it had identified more than 1 million tonnes of rare earth oxides in the Kiruna area in the far north of the country, the largest known such deposit in Europe.
Rare earth minerals are essential to many high-tech manufacturing processes and are used in electric vehicles, wind turbines, portable electronics, microphones and speakers.
"This is good news, not only for LKAB, the region and the Swedish people, but also for Europe and the climate," LKAB CEO Jan Mostrom said in a statement.
"It could become a significant building block for producing the critical raw materials that are absolutely crucial to enable the green transition," he said.
Rare earth elements are currently not mined in Europe, leaving the region depending on imports from elsewhere, while demand is expected to rise in coming years due to a ramp-up in electric vehicles and renewable energy.
"Electrification, the EU's self-sufficiency and independence from Russia and China will begin in the mine," Minister for Energy, Business and Industry Ebba Busch said in the statement.
Sweden currently holds the rotating presidency of the European Union and is a country seen as a key part of the EU's strategy for self-sufficiency in key minerals.
The European Commission considers rare earths to be among the most critical resources for the region. The vast majority of rare earths are currently mined in China.
Still, the road to mining the deposit in Sweden is a long one.
LKAB said it planned to submit an application for an exploitation concession in 2023 but added that it would be at least 10-15 years before it could potentially begin mining the deposit and shipping to market.
The process toward approval of new mines is lengthy and demanding in the Nordic country as operations often raise the risk impacting water resources and biodiversity in the areas where they are located.
Additionally, Erik Jonsson, senior geologist at the Department of Mineral Resources at the Geological Survey of Sweden, said Europe currently lacks full-scale capacity to process rare earth metals and to make intermediary products.
"So we also need to focus on the entire value chain on these metals, products like high efficiency magnets that we want to use for wind turbines or traction engines in EVs and so on," Jonsson said.
(Reporting by Johan Ahlander, Niklas Pollard and Marie Mannes in Stockholm and Jan Strupczewski in Kiruna; editing by Anna Ringstrom and Conor Humphries)