Europe’s largest rare earths mine: EU funding conflicts with its laws

A core tension underlies the EU’s support for LKAB’s Per Geijer rare-earth mine in northern Sweden. The EU wants to fast-track projects critical to its green and industrial policies. Its strict environmental and Indigenous rights laws can slow or block these efforts, especially because of permitting requirements, biodiversity protections, and Sami rights obligations.

LKAB’s Per Geijer deposit near Kiruna has been granted “strategic project” status under the EU’s Critical Raw Materials Act (CRMA), making it eligible for EU-backed loans, guarantees and other de-risking instruments. The designation aims to accelerate domestic mining of materials essential for electric vehicles, wind turbines and defence.

Yet this flagship project is now slowed down by the EU’s strict environmental and rights-based laws, which stand as immovable barriers even for projects Brussels deems essential to Europe’s tech advancement.

EU funding, political pressure, and strategic status

The Per Geijer project is central to the EU’s push for raw material autonomy. Under the CRMA, the EU has committed that by 2030 at least 10% of strategic raw materials are mined within the bloc and 40% processed domestically.

To reach those targets, the EU is channelling support through financial tools such as Invest EU, the Innovation Fund, and the European Investment Bank lending. Nearly three billion euros in strategic funding has been announced for mining, processing, and recycling projects that cut reliance on Chinese supply chains, with northern Sweden identified as a priority region.

Per Geijer’s designation as a Strategic Project acts as a political and financial signal. It improves access to EU-backed finance, lowers investment risk, and allows national authorities to prioritise the project in permitting. In EU terms, it is treated as in the public interest of the Union.

This combination of financial and political backing aims to accelerate mining at breakneck speed. However, legal requirements could bring everything to a halt.

Environmental law: no exceptions or shortcuts

Even though the project is important, LKAB still needs a full environmental permit under Sweden’s Environmental Code, one of the strictest versions of EU environmental law.

The process requires detailed and time-sensitive impact assessments on water, biodiversity, pollution, noise, and climate. These assessments must be reviewed by Sweden’s Land and Environment Court. Each stage can cause delays and appeals that could last for years.

At the EU level, the Environmental Impact Assessment Directive and the Habitats and Birds Directives apply fully. These rules protect Natura 2000 sites and endangered species, and they cannot be set aside just for industrial or strategic reasons.

While EU financing aggressively pushes forward projects like Per Geijer, the EU environmental law gives courts, authorities, and civil society the tools to halt them instantly and sometimes even indefinitely.

Indigenous rights: an important legal consideration

The legal tension continues with land-use conflicts with the Sami Indigenous population. The Per Geijer deposit overlaps with traditional reindeer-herding areas, triggering obligations under Sweden’s constitution, the European Convention on Human Rights, and EU laws to protect minority rights and ensure meaningful participation.

These legal demands clash with the CRMA’s urgent call for permitting acceleration. Legal experts warn that safeguarding standards like free and informed consent are near to being impossible under the relentless pressure of fast-tracked, EU-funded projects.

Kiruna now stands at the heart of a high-stakes test of what researchers call the EU’s “Green Deal paradox”: the climate-driven industrial ambition demands immediate action, but collides with strong legal protections for land, biodiversity, and Indigenous culture.

A flagship project for the Critical Raw Materials Act

Per Geijer is part of a larger, EU-backed LKAB value chain that also includes rare earth extraction from existing iron ore production in Malmberget and processing at an industrial hub in Luleå. All three projects have been designated Strategic Projects under the CRMA and benefit from coordinated permitting and improved access to EU-linked funding.

The limits are clear. Strategic status does not grant permits, weaken environmental standards, or override rights protections. The European Commission can withdraw the designation if sustainability criteria are not met or if projects fail to deliver as promised.

As a result, EU funding and the Strategic Project label generate irresistible momentum for mining, but EU environmental and rights law fabricates uncompromising legal barriers, setting the stage for grinding, years-long delays at a time when speed is critical.

A structural clash within EU policy

EU institutions argue that domestic rare earth mining is essential. Demand is expected to increase by more than 5 times by 2030, and Europe remains overwhelmingly dependent on imports from China.

At the same time, the EU’s legal order is built on the principles of precaution, environmental protection, and rights-based governance. These principles give opponents of new mines strong legal leverage, even when projects are financially and politically backed by Brussels.

The outcome of the Per Geijer project will show whether the EU can combine its funding-driven push for strategic autonomy with the strong environmental and rights standards underpinning the Green Deal.

Right now, Kiruna exposes a deeper, more urgent problem: the EU is racing to accelerate mining projects that its own laws are slowing down.