Nine hundred metres beneath the frozen streets of Kiruna, where winter daylight barely touches the horizon and temperatures fall to minus twenty degrees, Europe is attempting to rewrite one of the most consequential power relationships of the twenty first century. What appears, on the surface, to be a mining expansion project by the Swedish state owned company LKAB is in reality a legal, geopolitical and industrial confrontation with China’s near total dominance of the rare earth supply chain, a dominance that has already reshaped global trade law, weaponised export controls, and destabilised the foundations of the European Union’s green transition strategy.
The Per Geijer deposit, named after the Swedish geologist who identified it more than a century ago, contains magnetite, hematite and phosphate ore hosting all seventeen rare earth elements essential for modern civilisation. Neodymium and praseodymium alone underpin the permanent magnets used in electric vehicles, wind turbines, smartphones, defence radar systems and precision guided munitions. Without them, Europe’s digital economy, climate targets and military autonomy collapse simultaneously.
Despite possessing geological reserves in Sweden, Norway and other parts of the continent, the European Union currently operates no active rare earth mines and controls only a negligible share of global refining capacity. China, by contrast, controls approximately eighty five percent of light rare earth processing and effectively all heavy rare earth separation, a dominance built deliberately over four decades through state subsidies, lax environmental regulation and strategic industrial planning.
This imbalance is no longer a commercial inconvenience. It is a legal vulnerability embedded in international trade architecture.
China’s repeated use of export restrictions, most recently in retaliation for United States tariff measures, sits within the contested boundaries of World Trade Organisation law. While Article XI of the General Agreement on Tariffs and Trade prohibits quantitative export restrictions, China has repeatedly justified its controls under Article XX exceptions relating to environmental protection and resource conservation. WTO panels have previously ruled against Beijing in rare earth disputes in 2014, yet enforcement remains slow and politically constrained. The Kiruna project is therefore not merely an industrial response but an attempt to exit a legal battlefield that Europe is structurally ill equipped to win.
The European Union’s vulnerability has now been codified into law through its own regulatory architecture. The Critical Raw Materials Act, adopted in 2024, mandates that by 2030 no more than sixty five percent of any strategic raw material may originate from a single third country. Rare earths are explicitly classified as strategic. Failure to diversify supply is no longer a policy embarrassment but a breach of binding regulatory targets that threaten industrial planning approvals, state aid authorisations and energy transition financing.
Kiruna is being positioned as the flagship solution to this legal obligation.
Yet extracting ore is the simplest part of the problem. The true bottleneck lies in chemical separation and magnet manufacturing, processes governed by some of the strictest environmental laws in the world. The same environmental protections that pushed rare earth refining out of Europe in the nineteen eighties remain in force today under the EU Industrial Emissions Directive, the Water Framework Directive, the Waste Framework Directive and the REACH chemicals regulation regime. These laws impose criminal liability, strict waste handling standards and unlimited civil damages for radioactive contamination, precisely the byproducts generated during rare earth separation.
LKAB’s eighty million euro investment in a demonstration processing plant in Luleå and its stake in Norwegian firm REEtec represent early attempts to reconcile industrial necessity with environmental legality. Whether this reconciliation is technically achievable without diluting EU environmental law remains uncertain. No commercial scale rare earth refinery has yet operated within the full scope of modern European environmental compliance.
This tension exposes a deeper contradiction in European climate law.
The European Green Deal, the Fit for 55 package and the legally binding Climate Law commit the Union to climate neutrality by 2050. Wind turbines, electric vehicles and battery storage systems are central to this transition. Each depends on rare earth magnets. Yet the legal frameworks governing mining, waste and pollution make domestic production economically and procedurally prohibitive.
Europe has thus created a regulatory ecosystem in which green technology depends on materials that can only be ethically sourced outside its own legal system. Kiruna threatens to collapse that contradiction into a single test case.
State owned LKAB operates under Swedish law, European Union competition law and international investment obligations. Any environmental damage could generate claims under the Aarhus Convention on access to environmental justice. Indigenous Sami communities already retain legal rights over land use under Swedish constitutional law and international instruments such as the International Labour Organisation Convention 169, exposing the project to litigation risk long before a single magnet is manufactured.
Meanwhile, China’s dominance is legally entrenched not only through production capacity but through intellectual property, supply chain contracts and export licensing frameworks that function as instruments of state policy. When Beijing restricted rare earth exports in response to United States trade measures, it did so under domestic national security legislation modelled loosely on Western export control regimes. The European automotive sector suffered immediate supply disruption, underscoring how export controls have become a normalised tool of economic coercion.
This shift has redefined international trade law. What was once governed by tariff schedules and dispute settlement panels is now shaped by national security exemptions that are increasingly immune from judicial review. The United States has invoked similar doctrines to restrict semiconductor exports to China. The result is a global trade system where legality is subordinate to strategic necessity.
Kiruna exists inside this legal vacuum.
Even if mining proceeds smoothly, Europe faces a decade long delay before full production is viable. Experts estimate ten to fifteen years from extraction to integrated magnet manufacturing. During this period China will retain leverage, able to tighten or relax exports in response to European diplomatic positions on Taiwan, human rights, or technology restrictions.
The geopolitical cost of dependency is therefore cumulative. Each year of delay strengthens China’s negotiating position in unrelated legal domains including investment treaties, sanctions regimes and multilateral climate negotiations.
The irony is that permanent magnets were originally a Western invention. Developed in the United States and Japan in the nineteen eighties, their production migrated to China solely because environmental compliance costs rendered Western facilities uncompetitive. What began as regulatory virtue became strategic vulnerability.
Now Europe confronts the legal consequences of its own environmental leadership. Either it relaxes standards to permit industrial processing, risking domestic litigation and political backlash, or it maintains them and remains structurally dependent on a geopolitical rival that has demonstrated its willingness to weaponise trade.
LKAB’s chief executive Jan Moström is correct in one narrow sense. Politicians rarely exceed the courage of voters. Yet the legal system rarely tolerates strategic ambiguity.
The European Commission understands this. Hence the procession of commissioners through Kiruna, the classification of rare earths as strategic assets, and the accelerated permitting pathways under the Critical Raw Materials Act. These are emergency legal adaptations, tacit acknowledgements that the old regulatory equilibrium is incompatible with the new geopolitical reality.
What Kiruna represents, therefore, is not freedom from China but Europe’s first serious attempt to buy partial autonomy at extraordinary legal, environmental and financial cost.
Whether that autonomy materialises depends not on geology but on courts, regulators, trade lawyers and the unforgiving arithmetic of global power. China controls the present. Kiruna offers Europe only a contested future.
And in the frozen tunnels beneath northern Sweden, drilled five metres at a time, that future is being negotiated not with speeches or treaties, but with explosives, environmental permits and the slow grind of law itself.