- Rare earths are elements considered essential for the green transition and their demand is only growing in the global industry;
- Norway discovered the largest rare earth deposit in Europe and will be the first country on the continent to extract these minerals;
- Currently, China dominates the market for these minerals, using them as a geopolitical tool, but the Norwegian discovery could change this global scenario.
Rare earths are considered extremely critical for current industry, being used for various technologies, especially those linked to the green transition. Recently, Norway discovered what may be the largest reserve of these minerals in Europe.
The rare earths market, until now, has been dominated by China, which has a history of using these elements as an economic weapon to achieve its geopolitical objectives.
In this way, the Norwegian discovery and a possible strategic independence of Europe and the United States in relation to access to rare earths, could influence the global market for these minerals and geopolitics itself.
What are rare earths and what are they for?
According to the International Union of Pure and Applied Chemistry, rare earths – also known as rare earth materials – are made up of 17 different chemical elements.
Despite the name, these 17 elements are not earth and can be commonly found in nature. This name was given because the elements were found for the first time in rare and exotic minerals. The term “earth” referred to metallic oxides, so rare earths would be the oxides of these elements.
Furthermore, rare earths are not found in deposits of abundant concentrations, but are dispersed in nature. The separation and extraction process is complex and costly.
Rare earths can be subdivided into three groups according to their density:
- Light: Lanthanum (La), Cerium (Ce), Praseodymium (Pr), Neodymium (Nd) and Promethium (Pm);
- Medium: Samarium (Sm), Europium (Eu) and Gadolinium (Gd);
- Heavy: Terbium (Tb), Dysprosium (Dy), Holmium (Ho), Erbium (Er), Thulium (Tm), Ytterbium (Yb), Lutetium (Lu), Yttrium (Y) and Scandium (Sc).
The importance of rare earths in society is countless. These elements can be used in a wide range of products, ranging from glass and ceramics to military equipment. Currently, the greatest demand for rare earths comes from two factors:
- Electronic products: As they are materials with ductile, malleable, magnetizable, heat and electricity conductors, rare earths are widely used in the technology industry.
For example, the cell phones, tablets and televisions we use on a daily basis have rare earths in their components, mainly batteries and high-resolution screens.
In addition, medical equipment (such as magnetic resonance imaging machines), fluorescent lamps and communication radars also contain elements considered rare earths.
- Climate transition: In the lists released by the United States, European Union and China that list the most important minerals for the green transition, rare earths are present in all of them.
With growing concern about climate change and the need for investment in sustainable energy, demand for rare earths is expected to gradually increase.
This happens because these elements are mainly used in electric car batteries and wind energy turbines.
China’s track record of using rare earths as a geopolitical weapon
Having strategic natural resources considered important for global industry gives countries several advantages in geopolitical negotiations. China with rare earths is a great example of this. The country has the largest reserves in the world, with around 44 million tons, in addition to being responsible for most of the production and processing of these elements.
It was from the 1980s onwards that China became a giant in this market, realizing the importance of investing in technologies and resources to increase the extraction capacity of rare earths. In 1992, the country already declared the geopolitical importance of these elements with Deng Xiaoping, the then Chinese leader, saying that:
“The Middle East has oil, China has rare earths.”
The first time China explicitly used rare earths as a geopolitical tool was in 2010, during a diplomatic confrontation with Japan. At the time, a Chinese ship captain was arrested by Japanese authorities after colliding with a coast guard vessel Japanese. This happened near islands that were disputed by both countries and Japan claimed that the accident had actually been intentional.
After Japan refused to release the captain, China imposed an unofficial embargo on rare earth exports to Japan, that is, it banned trade with the country, but not openly. This highlighted Tokyo’s vulnerability.
In recent years, geopolitical tensions between China and the United States for global hegemony have brought rare earths back to the center of discussions. In 2018, during the trade war between the two countries, catalyzed by Donald Trump’s attack on Chinese products, there was speculation that China might restrict exports of rare earths to the US, but this ended up not happening.
However, at the end of 2023 it was announced that China would increase control over the export of rare earths, requiring buyers to report the destination of the elements sold. This declaration was supposed to be in force until the end of 2025 and many believed that this move was a strategy to gain an advantage in the summit negotiations that brought together Xi Jinping and Joe Biden.
These events caused countries to begin investing in alternatives that would diversify the source of imports of these elements, in addition to investing in the extraction, recycling and potential substitutes for rare earths, with the aim of becoming less dependent or “hostages” to China. .
However, China continues being the largest producer of rare earths, which is a problem for dependent countries. In 2022, the country was responsible for 40% of the total rare earths imported by the European Union and was considered by the economic bloc to be a major trading partner.
The mega discovery of rare earths in Norway
On June 6, 2024, a new discovery in Europe appears to provide relief for Europe’s heavy dependence on the export of Chinese rare earths.
After a geological investigation, the mining company Rare Earths Norway released data on what, until then, is the largest rare earth deposit in Europe, with around 8.8 million tons of the element, of which 1.5 million tons can be be used in electric batteries and wind turbines.
These resources are concentrated in the Fen Carbonatite Complex, in the municipality of Nome southwest of the Norwegian capital, Oslo. The place is where 580 million years ago there was an active volcano, which after its extinction had its upper part eroded.
Also according to Rare Earths Norway, the magma that solidified in the volcano now contains rare earth elements, such as neodymium and praseodymium and it is likely that the deposits reach around a thousand meters below sea level.
Furthermore, the Norwegian government also wants to invest in having the most sustainable mineral industry in the world, working on an Invisible Mine extraction concept.
How the discovery of the largest rare earth deposit in Europe – and also in Brazil and Greenland – weakens Chinese oligopoly and power in this sector
China’s history of using rare earths as a weapon for geopolitical negotiations demonstrates the strategic need to have natural resources considered important on the international stage.
By investing in controlling the production and supply of these crucial elements, China has been able to influence global economic and industrial policies while strengthening its position on the global stage.
Relations between the United States and Europe with China are tense. The European Union remains cautious in relation to the Chinese alliance with Russia, while the American country has a trade war with the Asian giant that has lasted for a long time.
With the new discovery of rare earths by the Nordic country, the United States and the European Union may become a little less dependent on the supply of these minerals from China. This is a very important geopolitical movement, as before this there was no extraction of rare earths in European territory.
Despite not being a member of the European Union, Norway is part of the European Economic Area (EEA), which promotes the free movement of goods, people, services and capital across Europe and is intrinsically linked to the European Union. Furthermore, the United States and Norway have a strong historical partnership in the military, educational, cultural and economic spheres, as the Scandinavian country exports oil, natural gas, maritime products and other goods to America and is part of NATO.
It is clear that, for the US and the EU, it is immensely more advantageous to import rare earths from a partner and ally country and be freer from China, which could use dependence on its products as a negotiating strategy.
Furthermore, Brazil also began investing in the national production of rare earths at the beginning of 2024. It is estimated that the country has the third largest reserves of these minerals in the world and this could be another bet to challenge Chinese hegemony in the international market. , even though it is a country with good relations with Beijing via the BRICS group.
Finally, near the US, Critical Metals Corp has acquired control of Greenland’s Tanbreez project, which it claims is the world’s largest rare earth deposit and hopes to supply Europe and North America.
In this way, the Norwegian discovery, in addition to Brazilian and Greenlandic investments, could weaken the geopolitical power that China holds with its large reserves and exports of rare earths and thus undermine one of the many tools that Beijing currently has to try to consolidate itself. as a global power.
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