Europe’s Raw-Material Needs Push Thousands Out of Home in Sweden

Houses designated for demolition in Kiruna. Photographer: Erika Gerdemark/Bloomberg Photo by Erika Gerdemark Photography /Photographer: Erika Gerdemark Ph

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(Bloomberg) — Tanja Mattila and her husband had just splashed out about $300,000 on a new home on the outskirts of Kiruna in Northern Sweden when a letter arrived from the state-owned mining firm LKAB.

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The wood-clad house is in an area that’s likely to become unsafe because of movement underground, and they’ll have to move. The couple had just relocated from a flat that’s also due to be destroyed within a few years.

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“It was a shock. We planned to stay here at least until we retire,” said 54-year-old Mattila, who teaches Finnish and Meankieli, a minority language. “A lot of people are unsure about their future.”

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Europe has long been dependent on other parts of the world for raw materials, but increased geopolitical tensions and trade disputes mean old supply chains and relationships have frayed, creating a push to develop more supplies at home. The town of Kiruna, sitting on iron ore and, crucially, rare earth minerals, is feeling the brunt of that shift.

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The question is how far are governments willing to go to access commodities and what price will local communities pay?

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Iron, for example, is key for strategically important steel, used not only in cars and construction but in the military equipment Europe is racing to produce. LKAB plans to boost volumes by up to 50% in the next decade. That’s also in the company’s interest; Iron ore costs just over $100 a ton, so huge amounts are needed to turn a profit.

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But the jewel in the crown at Kiruna is Per Geijer, just north of the town. It’s one of Europe’s biggest deposits of rare earths, vital for products like electric cars and smartphones. The European Union, in its push for critical raw materials, has designated the find a strategic project. The deposit is still being investigated and it may take another decade to start mining.

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Right now, China dominates the rare earths market, and it’s using that as leverage against the US, threatening curbs on exports, with implications for European industry.

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“If you want self-reliance, you need to mine,” said EU Industry Commissioner Stephane Sejourne, who visited the town last month. “Kiruna sits at the heart of Europe’s strategy for economic sovereignty and competitiveness.”

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Moving Church

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Modern Kiruna, far above the Arctic Circle, was founded around the turn of the last century, but there have been Sami and Finnish-speaking settlements in the area for far longer. 

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In August, the town was in the spotlight when its delicate wooden church was slowly moved 5 kilometers (3 miles) to a new home, away from the seismic rumblings of the world’s biggest underground iron ore mine.

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The move — a massive feat of engineering — was streamed on the internet, clips viewed millions of times. On the route, locals cheered and Eurovision winner Carola sang from a nearby stage.

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Just over a week later, the feel-good vibe was cut short when the letters started arriving. At a town gathering, LKAB said 6,000 more residents would have to move. The company is paying for the relocation and says it’s working to ensure a strong community.