Norway recently loosened China’s hold on rare minerals—a major breakthrough for Europe and the US

A Norwegian mining company, Rare Earths Norway, has recently discovered the largest deposit of rare earths in Europe. The acquisition has major implications not just for the company, which is expecting a windfall, but for global politics.

Rare Earths Norway has discovered a deposit in the Fen Carbonatite formation in the southern tip of the country, according to a press release. These rare elements, a family of 17 metals, are used in many consumer electronics such as smartphones and flat screen TVs. They are also important to the green energy transition because they are key components in products such as electric cars and wind turbines. But, as the name suggests, they are in short supply around the world. By fate or fortune, most of the world’s rare earths are found and mined in China, giving the world’s second largest economy tremendous influence in determining their supply and demand around the world. Currently, China accounts for 70% of the extraction of these elements from the ground and 90% of their processing, according to a study by the Oxford Institute for Energy Studies, an independent energy research institute.

The discovery of Norway will finally make Europe a player in this field.

“It is important to say that there is absolutely no collection of rare organisms in Europe today,” says Alf Reistad. CNBC.

Rare Earth’s Norway discovery comes at a time when Europe and the US have tense trade relations with China. Many of those conflicts are also wrapped up in issues of national security. Europe is wary of China, considering its relations with Russia, which has been largely excluded from the continent, by members of the European Union. Meanwhile, the US and China are engaged in what one economist calls an ‘eternal’ trade war. The US has accused China of deliberately flooding global markets with certain products, such as electric cars. The worry is that because China has cornered the market on exotics it may also exploit that market by doing the opposite and with the goal of holding supply to drive up prices—something it has threatened to do, but has yet to do.

Norway has already made some strides in trying to remove Europe’s dependence on China for access to building materials. In January, Norway’s parliament voted 80-20 to allow offshore, deep-sea mining for rare earth minerals in the country’s far north. Norway, already a major producer of oil and natural gas, will be the first country to allow its seas to be mined for rare minerals. Current plans would see Norway mine 108,000 square miles, an area roughly the size of Colorado. The newly discovered deposit only strengthens Europe’s hand against rivals such as China.

The fact that these reserves were located in China may have been due to chance. However, its ability to use them extensively and use them as a tool of national strategy—even a cudgel—was intentional. Through years of domestic industrial policy, China acquired patents on the technology needed to extract rare earths, directed large amounts of government resources to the project, and invested heavily in extracting ore deposits around the world.

Once its dominance was established, the Chinese government sought to protect it. Last year, China banned the export of technology used to extract gallium and germanium, two elements used in chip production. China’s strong market position has also been favored by looser operating standards. “This dominance has been achieved through state investment, export controls, cheap labor and low environmental standards,” the Oxford Institute researchers wrote.