21.3 C
Belgrade
19/06/2024
Mining News

Could the Swedish Arctic hold the key to Europe’s green energy transition?

The world is on the hunt for the raw materials that will power electric vehicle production. The discovery of more than one million tonnes of rare earth oxides near Kiruna in northern Sweden could be a game changer.

The global auto market has embraced electric vehicles (EVs), and battery demand is soaring.

Supported by

Gigafactories – large-scale electric battery factories, with production capacities typically expressed in gigawatt hours (GWh) – are cropping up in places such as Australia, China, Germany, Sweden, the UK and the US.

However, despite this global concerted effort to meet the rising demand, a shortage of electric batteries is expected by 2025, owing to a shortage of the raw materials needed to produce them. Could a new mine in Sweden’s northernmost town help to secure supply for Europe’s fast-growing market?

“More important than oil and gas”

Investment into gigafactories is heating up, with global capacity predicted to be ten times its 2020 level by 2030, according to research by GlobalData. Currently, China is home to the largest share of gigafactories, but, by 2030, Europe is set to be home to a much larger share, going from 9% in 2020 to a projected 32% in 2030.

For EVs, analysis by global management consultancy McKinsey shows worldwide demand growing by around 30% to reach almost 4,500GWh a year by 2030. The McKinsey report also projects the global battery value chain will increase by as much as ten times between 2020 and 2030 to reach annual revenues of $410bn.

“EVs are already supply constrained,” says Daniel Clarke, an analyst at GlobalData. “Demand will continue to rise and supply will not accelerate at the same rate. This is likely to get worse by mid-decade because mines take between seven and ten years to come online.”

Key to ultimately alleviating this future shortage is a greater supply of raw materials. Currently, China is also the source of most mined rare earth minerals, but a new mine in the north of Sweden – Europe’s largest known deposit of rare earth minerals – will be essential in continuing the global green transition.

In 2022, European Commission President Ursula von der Leyen said rare earth elements, needed to manufacture battery components central to a transition away from fossil fuels, would “soon be more important than oil and gas”.

Europe currently imports 99% of its rare earth elements from China, and a new mine closer to home has benefits beyond securing a supply of raw materials.

With supply chain lines tossed into disarray by Covid-19 and geopolitical events in Europe, manufacturers are looking to have all components of their products close to home. More than ever, parts-makers want to be able to source raw materials, manufacture batteries and install them in vehicles within a small radius. Ideally, those production points are also close to market.

While China has the biggest EV market, Europe leads the way for share of total car sales, share of existing car inventories and sales per million people, according to the International Energy Agency. In terms of EV demand growth, Europe is the dominant market, especially in the Nordic countries, where EVs accounted for more than half of all cars sold in 2021.

The new mine in Sweden has the potential to relieve supply demand from China while also boosting Europe’s capabilities to manufacture cars with European-sourced materials.

“This place … is at the very forefront of the green transition in Europe,” said Sweden’s minister for energy, business and industry while speaking at the mine. “This is the site of the most modern underground iron ore mine in the world. LKAB has taken the lead in a global transformation of the iron and steel industry by setting a new world standard for mining, producing carbon-free sponge iron and extracting critical minerals.”

 

Source: Investment Monitor

Related posts

Rio Tinto Assures on 2500 Pages – There is a Solution for Every Danger

Post Editor

EU’s new era: Critical Raw Materials Act and the push for sustainable autonomy

David Lazarevic

Navigating the critical material challenge: Securing a sustainable future for Europe

David Lazarevic
error: Content is protected !!