Get to Know the Terms: What Is the Difference Between Critical and Strategic Raw Materials and What Are REEs (Rare Earth Elements)?
Critical raw materials and their availability have been extensively discussed recently with regard to the war in Ukraine and security of supply in Europe and the United States. Many similar terms surface in the public debate that often get confused in the discussion. What are critical and strategic raw materials? And what are REEs, or rare earth elements? Senior Specialist Harri Kaikkonen explains the meanings of terms in this article in a series dedicated to explaining terms.
Critical raw materials are always a matter of definition. A party, such as the European Union, the United States or NATO, determines the raw materials critical to the operations of the region or organisation. The EU has identified critical raw materials that are of great importance to the EU economy and involve a high risk of disruptions of supply. The EU updates its list every few years.
A place on the list is determined mainly using the formula defined in the Critical Raw Materials Act. The EU list currently contains 34 raw materials. The US list features many of the same raw materials as the EU list, but uranium, for example, is on the US list of critical raw materials, but not the EU list.
The EU has defined 17 of its critical raw materials as strategic. For some of these raw materials, only a refined version is on the strategic list compared to the critical raw materials list. Lithium, for example, is on both lists, but only purer, battery-quality lithium has been classified as a strategic raw material.
Strategic raw materials are raw materials needed to achieve the EU’s strategic objectives. These include the green transition, digitalisation, space technology and the defence industry. Additionally, there is a significant difference between the global supply and demand of strategic raw materials, and it is relatively challenging to increase their production.
In 2024, the EU Critical Raw Materials Act allowed projects related to mining and the processing of raw materials to apply for a strategic project status. Industrial mining, processing and recycling projects targeting one of the 17 strategic raw materials may apply for this status.
Projects with this status will benefit from an accelerated permitting procedure and possibly from a status as a project of substantial public interest. The status may also involve additional EU funding support. The first application cycle for strategic projects was organised in August 2024.
A total of 170 projects applied for the status from the EU, 47 of which were granted the status of a strategic project. Six projects were listed in Finland, two of which are mining projects, one mining and refining project, two processing projects and one recycling project.
Are rare earth elements (REEs) rare at all?
Rare earth elements (REEs) have also surfaced often in the discussion around Ukrainian raw materials. Rare earth elements are a group of 17 chemical elements with chemically equivalent properties that are important in the production of magnets used in electric cars and windmills, as well as in the production of electronics. These include neodymium, praseodymium and terbium.
However, not all rarely found elements, like germanium, are rare earth elements. Despite their name, rare earth elements are not particularly rare in the bedrock, but commercially viable deposits are. The processing of rare earth elements is also challenging because, for example, radioactive substances often occur in the same deposits.
Currently, there is no mining production of rare earth elements in Europe, but known deposits are located, for example, in Finland and Sweden. The most important known rare earth deposit in Finland is Sokli in Savukoski, Eastern Lapland.
The Per Geijer rare earth deposit in Kiruna, Sweden, was just granted the status of a strategic project. In Sokli and Per Geijer, REEs occur together with iron and phosphate, which will be the main products of these mines at the possible exploitation stage.
There are no rare earth deposits in production in Ukraine either, and known deposits require significant further research efforts before commercial production can be launched.
More information on the EU Critical Raw Materials Act
The EU Critical Raw Materials Act (CRMA) Entered Into Force | GTK
