The push to develop Europe’s critical mineral discoveries

Two Nordic mining companies at the heart of Europe’s push to achieve resource security are taking novel — albeit very different — approaches. One is pursuing the concept of an “invisible mine,” while the other is taking on one of the world’s most radical relocation projects.

It forms part of a strategic shift for the European Union. Under its forthcoming “RESourceEU” initiative, the 27-nation bloc intends to step up its efforts to secure access to domestic sources of critical raw materials in both the short- and long-term.

The plan, which intends to boost investment in strategic projects, is designed to help break China’s long-held mineral dominance.

Alf Reistad, CEO of mining firm Rare Earths Norway, told CNBC that there’s been a clear shift in terms of how both domestic and EU policymakers are thinking about mineral supply chains.

“What we see now is really a sense of urgency. Everybody is speaking about the need for actions,” Reistad told CNBC by video call. “It is really the time to act now. We have always said that we are too early until we are too late.”

In June last year, Rare Earths Norway announced the discovery of Europe’s largest known rare earths deposit, reflecting what was seen as a watershed moment in the region’s pursuit of strategic autonomy.

It’s estimated that the firm’s Fen Carbonatite Complex, situated in the small industrial town of Ulefoss in southern Norway, contains 8.8 million metric tons of total rare earth oxides (TREOs).

Notably, roughly 1.5 million tons of these TREOs are thought to contain highly prized magnet-related rare earths, such as neodymium and praseodymium. These are critical components for a range of modern technologies, from electric vehicles and wind turbines to robotics and defense applications.

Rare Earths Norway said it is currently in close cooperation with the local municipality and national authorities over a zoning plan and hopes to present a prefeasibility study by the end of the year.

Ultimately, however, it faces a long road ahead to deliver on its rare earths potential. The company is targeting the delivery of rare earths to market by the first half of the 2030s.

To help reach these targets, Rare Earths Norway has been lobbying for domestic and EU policymakers to consider fast-track permitting and price guarantees, saying such measures will be pivotal to its success.

Reistad compared the firm’s push to deliver on its resource potential to participating in the Enhanced Games, a controversial event that allows athletes to take banned performance enhancing drugs under medical supervision.

“If you look now at what you see with China and the U.S., they are competing in a kind of Enhanced Games, and it’s not possible for us to compete at all if we have no security,” Reistad said.

“You see that the actions that have been made by [U.S. President Donald] Trump. He has been fast and bold. So, if there is no level playing field then it will not be possible to come true with this project,” he added.

A spokesperson for the European Commission, the EU’s executive arm, told CNBC that the bloc has a “clear vision” to ensure the secure and sustainable access to raw materials. By 2030, the bloc wants to extract 10%, process 40% and recycle 25% of what it consumes each year.

The EU is also aiming to limit reliance on any single external supplier to 65%.

To develop its discovery, Rare Earths Norway is planning to extract rare earths from its Fen site using an “invisible mine” concept to avoid surface disruption and environmental impact.

This concept involves drilling a long, narrow tunnel diagonally beneath the village of Ulefoss and backfilling extracted voids with waste materials.

“It’s important that people on top of the deposit are safe,” Reistad said, who compared the concept to that of a “Kinder Egg.”

“So, if you have seen in the project by LKAB in Kiruna, they have to move the town. We need to prevent that, and its approximately 300 properties on top of the deposit and a lot of people living there,” he added.

Reistad said the company has had “very good” dialogue with the people living on top of the rare earths deposit. Early community surveys have reportedly shown strong local support for the project, alongside some concerns about stability and waste management.

Swedish state-owned mining firm LKAB, which operates far above the Arctic Circle in the city of Kiruna, is taking a completely different approach to Europe’s growing appetite for raw materials.

The company announced in January 2023 what was then considered to be Europe’s largest known deposit of rare earths, describing the discovery as “good news” for Sweden, Europe and the climate.

The discovery of the so-called Per Geijer deposit sits in close proximity to the world’s largest underground iron ore mine. Indeed, it is LKAB’s plans to expand its iron ore mine that has prompted the move of thousands of city residents to a brand-new city center.

The extensive urban relocation project received international attention in August, when workers successfully moved a 113-year-old wooden church five kilometers (3 miles) down the road over the course of two days.

Later that same month, LKAB announced that 6,000 more people and approximately 2,700 homes would be affected by the relocation. The transformation is estimated to come at a cost of 22.5 billion Swedish kronor ($2.4 billion).

Niklas Johansson, senior vice president of public affairs and external relations at LKAB, said the relocation is not related to the rare earths discovery, but rather the firm’s sprawling iron ore mine.

Like Rare Earths Norway, LKAB’s Johansson said the company is currently in discussion with European lawmakers to ensure that it will be economically viable to develop its resources.

“We’ve already got the material up to the ground. That’s all been paid for by the iron ore. Still, it’s not a given that this is a business case. It looks like it is for us at the moment, but it’s not something that you’d say, ‘oh it’s a no brainer, just run for it,'” Johansson told CNBC by telephone.

“I also tell them that if it looks like this for us, who has most of the infrastructure and everything in place, how do you think it will look for others in Europe?”

Anthony Heron, deputy editor of the Arctic Institute think tank, said the projects overseen by Rare Earths Norway and LKAB are “strategically significant” because they represent some of the most credible paths to reduce Europe’s near total dependence on imported rare earths, especially from China.

“Estimates suggest the Norwegian Fen deposit could cover a sizeable share of future EU demand for rare earth minerals, and the exploration of Arctic deposits has been framed by analysts as pillars of Europe’s emerging ‘mineral sovereignty’ agenda,” Heron told CNBC by email.

“That aligns the Arctic squarely with the EU Critical Raw Materials Act, which has set targets for a minimum share of extraction to take place within Europe,” he added.