IRTC Industry Advisor Magnus Ericsson writes about the Rare Earth deposit discovery in Kiruna, Sweden.
The announcement by the Swedish iron ore miner LKAB that a large REE deposit has been identified at its Kiruna iron ore operation is welcome and good news. The company is a forerunner among mining companies in trying to facilitate the green energy transition by extracting REEs from its iron ores, together with phosphate, another critical element. LKAB is also at the front of CO2 free steel production.
But it is early days for the REE project and there are serious technical problems to be solved, not in the mining process step but in extracting the REEs form the iron ore. In addition, the market for REEs is small in volume and value compared to iron ore, copper and other major metals and the price volatility is high. It is a high-risk market which is further complicated by the dominating role of the Chinese producers.
In order to support the undertaking, the European Commission should de-risk the project by coordinating long-term offtake agreements to guarantee that the REE products can be sold to European users at a reasonable price when LKAB’s project starts delivering in 10-15 years time.
References:
- “Europe’s largest deposit of rare earth metals is located in the Kiruna area”, January 12, 2023, LKAB : https://lkab.com/en/press/europes-largest-deposit-of-rare-earth-metals-is-located-in-the-kiruna-area/