Imagine an entire town, nestled within the Arctic Circle, being uprooted and moved! This isn't a scene from a science fiction movie; it's the reality unfolding in Kiruna, Sweden, as part of a massive undertaking to expand the iron ore mining industry and tap into valuable rare earth deposits.
In a remarkable feat of engineering, a 113-year-old wooden church was moved nearly two miles in the summer of 2025. This was just a small piece of a much larger project. The mining company LKAB is relocating the entire town of Kiruna. This is being done because of the expansion of iron ore mining and the discovery of rare earth deposits.
This ambitious urban transformation is expected to span over a decade. Residents are being offered financial compensation or a new home to facilitate the move. According to Niklas Johansson, senior vice president of public affairs and external relations at LKAB, about 90% of the residents have opted for a new house.
While the move is bittersweet for some, the community understands the importance of the mining industry to Kiruna's survival. Mats Taaveniku, Chairman of the Municipal Council in Kiruna, told CNBC, "Kiruna is built on the minerals, so every resident in Kiruna knows that we have to move from our homes sooner or later because we are dependent on this mining industry."
LKAB has been mining iron ore in Kiruna since the early 20th century. The Kiirunavaara mine is currently the world’s largest underground mine for iron ore. Now, LKAB is exploring the new deposit, Per Geijer, which contains high levels of phosphorus and is one of Europe’s largest known deposits of rare earth elements.
In 2023, LKAB announced the discovery of significant rare earth element deposits in the Kiruna area. This is the largest known deposit of its kind in Europe. After a successful exploration stage, LKAB found that mineral resources of rare earth elements in the area exceed 1 million tons of rare earth oxides. Jan Moström, President and Group CEO at LKAB, stated that this discovery "could become a significant building block for producing the critical raw materials that are absolutely crucial to enable the green transition." He also highlighted the supply problem, saying, "Without mines, there can be no electric vehicles."
This discovery in Kiruna is part of a trend in the Nordic countries, which could help Europe reduce its reliance on China for mineral supplies. In 2023, Finland found two rare earth minerals – kukharenkoite and cordylite – for the first time. Norway is also planning to develop Europe’s largest deposit of light rare earth elements in the Fen field in the town of Ulefoss. Thor Bendik Weider, chairman of REE Minerals Holding AS, believes that the Fen field alone could meet a significant portion of European industry's needs for decades.
But here's where it gets controversial... The International Energy Agency (IEA) has highlighted the concentration of the rare earth supply chain. China currently holds a 59% share of rare earth mining, 91% in refining, and a staggering 94% in magnet manufacturing.
Two decades ago, China accounted for around 50% of the production of sintered permanent magnets, which are used in various applications. Today, that share has risen to 94%, making China the world’s single largest supplier of this critical component. The IEA's analysts warn that such high market concentration leaves global supply chains vulnerable to disruptions in key sectors.
What do you think? Is the relocation of Kiruna a necessary step towards a greener future, or does it come at too high a cost? And what are your thoughts on China's dominance in the rare earth elements market? Share your opinions in the comments below!
