Norway just struck a gold mine. Well, a rare mineral mine. 

The Norwegian mining company, Rare Earths Norway, just uncovered the largest deposit of rare earth elements in Europe. The discovery has major implications not just for the company, which is certainly poised for a windfall, but for global geopolitics. 

Rare Earths Norway found the deposit in the Fen Carbonatite complex located in the southern tip of the country, according to a press release. These rare elements, which are a family of 17 metals, are used in a host of consumer electronics like smartphones and flat-screen TVs. They’re also critical for the green-energy transition because they are key components in products like electric vehicles and wind turbines. But, as the name suggests, they are in short supply around the world. By dint of geography or luck, the vast majority of rare earth elements are found and extracted in China, giving the world’s second largest economy extraordinary influence in determining their supply and demand across the world. Currently, China accounts for 70% of the extraction of these elements from the ground and 90% of their processing, according to research from the Oxford Institute for Energy Studies, an independent energy research institute.

Norway’s discovery would finally make Europe a player in the industry. 

“It is important to state that there is absolutely no extraction of rare earth elements in Europe today,” Alf Reistad told CNBC.

Rare Earth’s Norway’s discovery comes at a time when Europe and the U.S. have had tense trade relations with China. Many of those tensions are wrapped up in national-security issues as well. Europe is wary of China, given its allyship with Russia, which has been largely ostracized on the continent, certainly by members of the European Union. Meanwhile, the U.S. and China are engaged in what one economist called a ‘forever’ trade war. The U.S. has accused China of intentionally oversupplying global markets with certain products, like electric vehicles. The concern is that because China has cornered the market on rare elements it could also manipulate that market by doing the opposite and purposefully withholding supply to drive up prices—something it has threatened to do, but hasn’t yet pulled the trigger on. 

Norway has already made some strides in trying to chip away at Europe’s dependence on China to get access to the materials. In January, the Norwegian parliament voted 80-20 to allow off-shore, deep-sea mining of rare minerals in remote waters to the north of the country. Norway, which is already a major producer of oil and natural gas, would become the first country to allow its seabed 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 like China. 

The fact these reserves were located in China may have been due to chance. However, its ability to make the most of them and use them as a strategic geopolitical tool—even cudgel—was intentional. Through years of domestic industrial policy, China secured patents in the technology needed to extract the rare elements, directing huge amounts of government resources toward the project, and investing heavily in extracting ore from deposits across the globe. 

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 manufacturing. China’s strong market position was also favored by lax labor standards. “This dominance has been achieved through decades of state investment, export controls, cheap labor and low environmental standards,” the Oxford Institute researchers wrote.

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