Europe’s defence isn’t just a matter of armed forces and willpower—it’s about resources. Decades of reliance on free trade have endangered the continent’s mineral security, leaving it vulnerable in a world where strategic control of raw materials is paramount. Europe faces stiff competition not only from China but also from the United States and the Global South, all of whom are increasingly aware of the critical importance of mineral resources in shaping the future of global power dynamics.
The European Union has identified 34 minerals as critical and 17 of them as strategic. Strategic ones include cobalt, battery-grade nickel, and copper, as well as tungsten, titanium, and so-called rare earth elements. These and many other minerals are essential for the operational capabilities of modern defence applications.
China has worked persistently to gain strategic dominance in the global market for the majority of strategic minerals. In its keynote speeches, China highlights its role as a developer of electric cars and battery technology. As far as China is concerned, mineral flows are also a matter of superpower politics and the interests of the defence industry.
China Secured Congolese Cobalt
Cobalt is a good example of China’s resource strategy. A decade ago, Chinese companies started buying old copper mines in the Democratic Republic of Congo. Instead of copper China’s interest was in cobalt in the ore of those mines. The sellers were mainly Western companies that felt they had received a good price in the transaction. Otherwise, there would have been no deals. Thanks to ownership of these mines and other agreements in the region, China today controls more than 80 percent of the world’s cobalt production.
Cobalt has become known in public as a battery mineral, but after batteries, the second largest user base of cobalt is the aerospace and defence industry. Cobalt strengthens steel, many of the so-called “superalloys” contain cobalt. In defence industry products, durability, penetrating ability or penetration prevention are all vital elements for the troops using them.
China’s approach to seizing one mineral after another follows the same pattern. In addition to mineral flows, it is important to control the processing of minerals. For this reason, China has repeatedly built a model in which it during the growth phase processes strategic minerals with a negative margin, or loss. As a result, companies operating in the Western financial market have not been able to build or expand their operations. When Western companies are pushed out of the business Chinese have gained their target – dominance of the market and mineral flow.
The model offered by China has also suited both Europe and the United States perfectly. For the battery of an electric car, cobalt is mined from Congo, which is democratic and a republic only in terms of its official name. Part of the production is based on manual excavation, often with child labor. Although there are also better-managed mines in Congo, environmental and social problems are significant.
From Congo, the mined material containing cobalt – which contains some percent of the mineral that ends up in the final batteries – will be trucked to the port of Durban, South Africa. Next, the sea journey to the port of Shanghai begins. In China, cobalt is refined and the journey of a battery material, a finished battery or, increasingly, a Chinese-made electric car begins its journey to Europe. There is much more transition than green in this production process.
For Western consumers, companies and governments, it has been mineral colonialism, where we have outsourced ethical issues and environmental responsibilities behind a “Chinese firewall”. People have not wanted to know the origin of batteries, the energy used to manufacture them or the workforce. In social media electric vehicles look good, but sometimes the reality is more complex.
Biden Has Run Faster Than the EU
The impact of the US presidential election in November 2024 on world politics is rightly widely speculated. There are very few things that can remain the same, regardless of which of the two main candidates the U.S. electoral system ultimately elevates to the White House.
One of the things that will remain unchanged is the country’s minerals policy and its “America first” mentality.
Under both the Trump and Biden administrations, the United States has launched a strong backlash against China’s mineral superiority. Together with Canada and several countries in South America, it has created a cooperation network, which includes a tax reduction program called the Inflation Reduction Act and business subsidies made directly in the name of the Defence Administration’s Defence Act.
From the perspective of international financial markets, this has meant an increase in the attractiveness of projects favored by the United States. The European Union was left on the starting scaffold for years, the US federal government was able to make decisions in three months that the EU could not respond to in three years.
The international financial markets are still asking whether CRMA is a carrot or a stick. It will be up to the new EU Commission to consider how the EU area will respond with possible funding to the US support measures that have proven to be effective.
At this stage, the CRMA provides a sound framework but lacks the ability to make a significant impact without funding commitments from the EU to support private industry investment.
Finland is a Significant Refiner of Cobalt
Finland is a superpower in European metal processing. Outokumpu, Boliden, and SSAB have significant metal processing capacity in Finland, but above all, generations of expertise and a long tradition of research and education in the field.
In terms of mining and material processing, Finland is also a significant player in process design and related equipment manufacturing. At present, approximately 10 percent of all cobalt mined in the world is processed in Finland. Most of this is imported, mainly from Congo and Russia. Despite the EU sanctions rounds, ore trains importing nickel and cobalt still run through the Eastern border, from Vaalimaa to Harjavalta near the western coastline. How long this continues is not a matter for sanctions decisions alone. It is possible that it is in Russia’s interest at some point to divert that mineral flow. The rails from Russia lead also to China.
Finland’s bedrock contains cobalt. Most of the identified cobalt reserves within the EU area are in Finland, and this mineral can also be found in Swedish bedrock.
EU currently mines around one percent of the world’s cobalt. This production comes from Finland, from two mines, Terrafame’s Sotkamo mine Sotkamo at the Kainuu region and Boliden’s Kevitsa mine in Sodankylä in the Lapland Region. Terrafame’s main product is nickel, while the main products of Kevitsa mine are nickel and copper. The Kevitsa mine is nearing the end of its production cycle. Cobalt is a by-product in both mines, so the annual production of cobalt is determined by how much of the mine’s main minerals are mined. There is the Chinese impact again.
The world market price of nickel has been relatively low in recent years. The reason for this lies in Indonesia, where China has recently commissioned several new nickel mines with significant annual production. For this reason, many nickel mines in Australia, for example, are currently on care and maintenance – not producing. The world market price is pushed below their break-even point.
Exploration and Opening of Mines Take Time
The properties of Finnish bedrock are well known, thanks to the Geological Survey of Finland – GTK. State geological research has been carried out in Finland since 1877 when the Geological Bureau of Mountain Board “Vuorihallitus” was established.
GTK is an internationally highly respected organization that has produced a lot of information on the bedrock of Finland. However, there is a long way to go from the data produced by GTK to the precise locating of orebodies containing minerals and studying their properties. This work is called exploration.
In Finland, exploration was for a long time the exclusive right of state-owned companies. In the 1990s, state-owned companies abandoned exploration both in Finland and abroad. Outokumpu had exploration projects on continents other than Europe. At the same time, both Finnish and European industries threw themselves into the ideals of free trade. Material was obtained from around the world at lower prices, and there was no talk of origin, production methods, political or other security of supply risks.
Only in the last decade has exploration in Finland returned to the level it was at under state-owned enterprises. In the intervening decades, research focused mainly on studying previously discovered gold deposits in Western Lapland and utilizing the knowledge accumulated in previous decades.
Only in recent years has exploration been carried out in Finland, targeting previously little-studied areas. Such research is progressing slowly for two reasons: the moraine layer formed by ice ages makes exploration work much more expensive than elsewhere in the world, and initial rock, boulder, and soil samples can only be collected when the ground is thawed. Of course, technology is advancing, and drones have also become involved in early-stage exploration to enhance the study of the electrical and magnetic properties of bedrock.
Europeans are Passive Ore Explorers
According to expert estimates, in 2023 only three percent of all exploration investments were made in the European Union. In Europe, exploration and mining have not been part of socially supported business activities. There are many reasons, and the history and effects of coal mining characterize the entire industry, especially in continental Europe.
Ore exploration in the EU area relies heavily on funding from other parts of the world. Most exploration companies are funded by Canadian or Australian investors. Funding for early-stage exploration requires not only culture but also expertise. After state-owned enterprises, neither institutional investors nor the state has financed exploration e.g. in Finland.
From the perspective of mining financing, the difficult temporal predictability of Finnish permits is a key problem. The CRMA, which has now entered into force at the EU level, aims to create deadlines for permits and the so-called “one-stop-shop principle”. In Finland, as in other Member States, national legislation guided by CRMA is currently underway. Regarding strategic minerals, Finland is likely to apply the so-called fast lane procedure created by the previous government for various green transition projects.
In mining, it is important to distinguish what is lifted from the soil or bedrock. Humanity engages in soil extraction in many ways. Lifting oil, oil shale, or coal to the surface produces a one-off effect in the form of energy production and a lasting effect in the form of various emissions.
Some minerals help capture, store, and transport renewable energy. When these minerals are recycled after their primary use, the benefits will increase. However, the properties of recycled minerals do not correspond to the properties of the mined material, the higher the performance expected from the mineral, the more accurately its properties must correspond to the final use. Directing recycled material to where it is most justified in terms of its technical characteristics will be an important issue for a sector such as defence. Minerals with the best properties must not be secondary.
Geological Reasons to Wage War
Every defence professional is familiar with Finland’s and Europe´s military history understands how strong the impact minerals have had on the course of events over the centuries.
The lake ore know-how of Finnish ironworks was created during the Swedish rule and interested Russia. During WW2, both the Soviet Union and Germany had great interest in the nickel of Petsamo by the Arctic Sea.
The world has not changed. Ukraine’s front lines and geological maps of the region placed side by side, tell another eternal story. There has always been a desire to set boundaries so that iron or other riches are on one’s own side of the fence. Swords are made of ore and for ore.
Strategic Minerals for NATO
Since 2017, I have been working with ore exploration for cobalt and other technology minerals. Our company Latitude 66 Cobalt conducts ore exploration in 15 municipalities in Kainuu, Koillismaa, and Lapland. In Kuusamo, we are developing the well-known cobalt-gold orebody for mining.
When we started our work in 2017, cobalt was primarily seen as an enabler of the electrification of transport. A few years later, the possibility of capturing and storing renewable energy came alongside.
Now the international and national debate on cobalt is discussed primarily through the needs of the defence industry. Defence is not only super alloys and other special materials – defence is more and more also a question of batteries. Airborne and waterborne autonomous devices demand battery technology. Military communications technology to coordinate weapon systems needs security, as well as the security of power supply by batteries.
My acquaintances in Washington refer in private conversations to certain minerals in the bedrock of Finland and Sweden as “NATO minerals”. The needs of the Nordic defence industry must be anticipated over the next 30 years. At the same time, it is necessary to find out where the industry can obtain the strategic minerals it needs safely and without interruption in all circumstances.
Such an investigation has its nature, not all information can and should not be public. However, this is an important tool for both the Finnish and the Swedish governments towards both the European Union and NATO.
Own Mineral Production Needed
In the defence industry mineral value chains must be in order. In the United States, the Pentagon controls the production of the arms industry and has halted fighter aircraft production in a situation where the origin of materials has been unclear.
The United States has been investing heavily in mining and exploration developments to ensure the security of the critical minerals required in the defence industry. This is something the European Union should also consider. Without these investments, the ability to secure the supply of critical raw materials will be extremely difficult, or even impossible to the level that reality requires.
Neither Finland nor Sweden nor the other Nordic countries can ever be completely self-sufficient in minerals. That would be a geological impossibility. We would not be able to mine or refine minerals from our own bedrock without international trade in minerals.
Politicians place great hopes on the Nordic defence industry as the export markets of the future. The time to secure the foundation is now. The defence industry must be able to provide the best-informed estimate of the mineral needs of the coming years and decades. Based on this, clear plans must be drawn up as to where and how the minerals in question can be extracted.
The metal processing expertise of Finland and Sweden is world-class. This competence and its development must be taken care of at the same time. We must invest in product development in universities and companies located in their vicinity.
The governments of Finland, Sweden, and Norway would do well to build a joint minerals strategy. Strategy work is currently underway in Finland, once it is ready let´s keep the pace up. The geology of the Nordic region provides an excellent basis for the needs of the defence industry, but it requires investments in ore exploration and the development of mining operations. Permitting timelines also can have a negative impact on the ability to advance important mining operations.
Mining and exploration techniques have advanced considerably in recent times to ensure environmentally sustainable methods are incorporated. Research and development efforts should also be directed towards continuing the important advancement of sustaining mining methods. In essence, it is also a task of building security.
Jussi Lähde is the head of responsibility and communications of Latitude 66 Cobalt Oy, an author, and a former advisor of the president of Finland.
