Supplying much of Europe’s REE needs – promising Swedish deposits

Promising Swedish deposits

The supply uncertainty experienced by consumers of critical metals has been on the public and political agenda since 2010, when the rare earth element (REE) crisis demonstrated the fragile nature of the current REE supply chain, built as it is upon an unsustainable Chinese monopoly.  Continued global political tensions and instability have ensured that the desire for energy and resource independence has remained topical.

Despite reams of articles and recommendations published by governments, academia and industry over the intervening years, there has been little fundamental change with regard to supply options for REE’s, tungsten, tin, tantalum, antimony or platinum group elements (PGE’s) for Western consumers.  Such metals, and numerous others, are deemed critical due to the irreplaceable role they play for industry, and the high degree of concentration in the existing supply chain.

Across the Western World, a majority of undeveloped mineral resources lie in the hands of junior exploration companies with no cash flow, that rely on shareholder funds to discover and advance their assets.  This system is highly efficient for metals like Cu, Au, Zn or iron for which there are hundreds of producers globally, thousands of undeveloped resources, and broad supply networks with transparent pricing mechanisms.  Risk capital flows quickly to projects with the best chance of profitable development, and takeovers by major producers are a regular occurrence, rewarding early stage investors handsomely.   

In the critical metals arena, significant resources are geologically scarce, such that countries or regions will have few alternatives from which to choose for domestic critical metal supply.  These mineral resources are again concentrated in the hands of junior companies.  However, despite the clear economic importance of these metals, the availability of risk capital has been limited.  Opaque pricing, market asymmetry, involvement of the Chinese government with centralized control of competitors, and substantial technology hurdles for new participants have limited investor appetite.  On this unlevel playing field, government policy is clearly highly relevant to attract and support investment for critical metal development, and appropriate policy can greatly increase the chance of success.

In Europe, manufacturing industries are currently completely dependent on distant suppliers for critical metals.  These suppliers may be direct competitors, are often monopolies, are continually prone to manipulation, and include unsustainable environmental or social practices.  To counter this monopoly, and provide a sustainable domestic supply option, a range of mineral exploration companies are investing across Europe to discover and develop critical metals projects.

Tasman Metals Ltd is one such company, focused on the traditional mining districts of the Nordic countries and 100% owner of Norra Karr in Sweden, one of the world’s most significant heavy REE deposits.  Norra Karr is rich in the most critical REE’s and is able to supply much of Europe’s REE needs for at least 50 years.  Unlike many heavy REE deposits, the associated concentrations of radioactive thorium and uranium in Norra Karr are extremely low, greatly facilitating the development of the deposit.  A fully integrated European REE supply chain shall remove supply risk, minimise the environmental footprint of mining, eliminate the need for stockpiling, and will allow Sweden and Europe to retake the lead in future REE innovation.

The European Commission and Member States have been significantly less active than most other developed regions in their attempts to attract exploration and ensure its success.  In Canada, the government of the Province of Quebec has become a direct investor in companies with critical metal assets, acknowledging the imbalance between the difficult market conditions and the long term benefits a secure project can bring.  In Australia, Research and Development rebates extend to exploration investment, and in some areas the State Government co-invests to part-pay for drilling activity.  In the USA, the State of Alaska has recently approved debt funding in excess of US$130 million to support the future construction of an REE project, with a view to capturing the downstream benefits to be gained through Alaska’s involvement in emerging and expanding technologies.

China has now recognised that critical metals are key drivers for sophisticated and strong industrial economies, and not commodities to be wasted.  Critical metals lie upon the leading edge that will unlock the coming century’s material science, energy and engineering innovations, in areas that cannot yet even be imagined.  The supply uncertainty felt by Western companies, and their inability to incorporate critical metals with confidence, is not felt by Chinese competitors, where the most appropriate metals can be used to engineer the best and most efficient solutions.  The age of unrestricted access to critical metals is over, and without appropriate planning and the guidance of supportive government policy, countries and their manufacturing industries will not have access to the building blocks for the most forward-looking of technologies.

Mark Saxon
Tasman Metals Ltd