Rare Earth Exchanges

Critical Minerals – LKAB Breaks Ground on Europe’s First Critical Minerals Facility

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Highlights

  • LKAB initiates $72.56 million demonstration plant to extract phosphorus and rare earth elements from existing mining operations
  • Potential to supply 7x Sweden’s phosphorus needs and 6% of EU’s agricultural demand by 2030s
  • Strategic move to reduce Europe’s dependence on imported critical minerals for agriculture and renewable energy sectors

According to their January 28 press release (opens in a new tab), Swedish mining company LKAB (opens in a new tab) has started construction on a groundbreaking facility in Luleå, designed to extract phosphorus and rare earth elements from existing mining operations. This marks a major step in Europe’s push for greater self-sufficiency in critical minerals, a sector currently dominated by imports.

No domestic supply-can LKAB change that?

For decades, Europe has relied on foreign sources for minerals essential to agriculture and the green transition. Phosphorus is a key ingredient in fertilizers, ensuring food security across Sweden and the EU. Meanwhile, rare earth elements play a crucial role in the production of electric vehicles and wind turbines, powering the shift to renewable energy. Right now, Europe has no domestic supply of these materials—a situation that LKAB is determined to change.

Security of supply

“The world has now turned its attention to metals and minerals once again. We are currently almost entirely dependent on imports for phosphorus and rare earth elements, while demand is rising sharply,” said LKAB CEO Jan Moström. “By extracting these critical minerals, LKAB can make better use of the material we already mine and strengthen our future competitiveness while also improving security of supply and preparedness in Europe. This facility is a crucial building block to make that possible.”

Geopolitics and environmental issues

This initiative isn’t just about business; it has major geopolitical and environmental implications. The supply of critical minerals is currently at the mercy of global markets, often controlled by a handful of countries. As Minister for Energy, Business, and Industry Ebba Busch put it, “The green transition and the electrification of our society start in the mine. It is an unsustainable contradiction to want electric vehicles and wind turbines without also taking responsibility for the raw materials.”

$72 million for demonstration plant

LKAB has committed approximately $72.56 million to this demonstration plant, which will be operational by 2026. The goal is to refine and validate a process that extracts phosphorus and rare earth elements from apatite concentrate, a byproduct of iron ore mining in Gällivare. This is just the first step in a larger plan: if all goes well, LKAB intends to scale up operations through the 2030s, eventually meeting a significant share of Europe’s mineral demand.

A game-changer?

The scale of the potential impact is immense. Once at full capacity, the planned industrial park could supply seven times Sweden’s phosphorus needs and cover about six percent of the EU’s agricultural demand. Since rare earth elements are not currently mined in Europe, this facility could be a game-changer for industries that rely on them, from car manufacturers to renewable energy companies.

Luleå Mayor “very pleased”

Local leaders are embracing the project as a catalyst for economic growth and technological innovation. “I am very pleased that LKAB has chosen to build a Demonstration plant for critical minerals in Luleå,” said Fredrik Hansson, Deputy Mayor of Luleå municipality. “This strengthens our city as a hub for innovation and sustainable development while building on the historical ties with Gällivare and the Malmbanan railway.”

Environmental permit decision expected by end of the year

Meanwhile, in Gällivare, where the raw materials originate, the investment represents an economic boost and a step into the future. “Norrbotten is on the threshold of a new industrial era, and the collaboration between Gällivare and Luleå is a driving force for the entire region,” said Birgitta Larsson, Chair of the Municipal Board in Gällivare.

LKAB has already filed for environmental permits to develop a full-scale industrial park in Luleå, and a decision is expected by the end of 2025. The demonstration plant will not only serve as a production site but also as a research hub, exploring ways to extract even more valuable minerals from Sweden’s rich geological deposits.

1.7 million tons of rare earth oxides

At the heart of this strategy is the Per Geijer deposit in Kiruna, which contains an estimated 1.7 million tons of rare earth oxides—one of the largest known reserves in Europe. LKAB hopes this deposit will play a crucial role in expanding its critical minerals operations in the coming years.

Europe’s reliance on imported raw materials has long been a vulnerability, one that global supply chain disruptions and geopolitical tensions have increasingly exposed. LKAB’s investment in domestic production is not just a business decision; it is a strategic move to secure the continent’s future in a world of uncertainty.

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