Critical Raw Materials in the Arctic, Oulu as part of NATO's DIANA network, Canada's Arctic potential and Arctic Cooperation

Dear Readers!

Today Arctic Highlights marks a milestone with the 50th edition. In today's Arctic Highlights you find :

• Finland Launches NATO-Backed 6G Test Centre in Oulu

• Indonesia Emerges as Potential Arctic LNG Market for Russia

• Geopolitics of Arctic Critical Raw Materials

• Divided World, Divided Arctic: Geopolitical Realities Take Hold

• Potential for U.S.-Russia Arctic Cooperation Emerges

• South Korea Pursues Major Military Equipment Deal with Canada

• Canada Expands Arctic Fleet with Icebreaker Contracts

Finland Launches NATO-Backed 6G Test Centre in Oulu

Finland has established a 6G Test Centre in Oulu as part of NATO's Defence Innovation Accelerator for the North Atlantic (DIANA) network. The centre was announced on January 14, 2025, after NATO's DIANA Board approved Finland's proposal, which was originally submitted in July 2023.

The University of Oulu will manage the facility in cooperation with the Technical Research Centre of Finland (VTT). The Finnish Ministry of Defence serves as the national authority for the project, with VTT coordinating the proposal preparation.

The test centre provides facilities for developing and testing dual-use 6G technologies applicable to both civilian and military sectors. It offers specialized testing environments, including radio frequency measurement equipment capable of studying 6G components at up to 330 GHz.

A second test centre will be established at VTT's Otaniemi site focusing on cyber-secure communication and quantum technologies. Additionally, VTT will set up a business accelerator in Espoo in partnership with Aalto University and the University of Helsinki.

The University of Oulu has also joined the Digital Defence Ecosystem, strengthening Finland's position in defense technology innovation by connecting civilian technology companies, research organizations, and defense industry players.

Indonesia Emerges as Potential Arctic LNG Market for Russia

Russia is considering Indonesia as a potential growth market for its liquefied natural gas (LNG) exports, according to independent energy expert Kirill Rodionov. In a March 2, 2025, interview with RIA Novosti, Rodionov stated that the removal of U.S. sanctions on the Arctic LNG 2 project could pave the way for increased Russian LNG supplies to Asian nations, including Indonesia.

Rodionov cited significant potential demand for Russian LNG in developing countries but acknowledged that current sanctions are a key impediment. He anticipates a possible shift in this situation over the long term.

The expert indicated a likelihood of U.S. LNG industry sanctions being lifted in the latter half of the decade. This would allow the operational Arctic LNG 2 project, currently constrained from shipping due to sanctions, to proceed.

Rodionov also highlighted Indonesia's rising gas demand, driven by the country's efforts to transition from coal to cleaner energy sources. He referenced data projecting Indonesia's electricity consumption to increase by an average of 3.8% annually through 2060, creating a favorable environment for increased gas imports. Indonesia's shift to gas is expected to aid in reducing its coal-fired power generation.

Rodionov further noted an anticipated increase in global LNG availability in coming years, largely due to expanded gas liquefaction capacity in North America. (Source: here) 

Geopolitics of Arctic Critical Raw Materials

A recent study by Andreas Raspotnik, Erdem Lamazhapov, Iselin Stensdal and Gørild Heggelund, titled "Critical Raw Materials: Interests of China and the European Union in the Arctic," highlights a potential future flashpoint in the Arctic region: the development of critical raw materials (CRMs). The study focuses on China and the European Union (EU), two actors with a growing interest in exploiting these resources. The research underscores the strategic importance of CRMs, such as lithium, cobalt, nickel, and rare earth elements, for the global energy transition and broader geopolitical dynamics. This significance is driving increased attention to the Arctic's potential role in securing their supply. Current global CRM supply chains are characterized by vulnerabilities to geopolitical risks, making diversification and securing access a priority for many nations.

The study's findings reveal distinct motivations and strategies among key players. China's interest in Arctic CRMs is largely driven by geostrategic ambitions and the need to meet its domestic mineral demand. China aims to solidify its dominance in the CRM sector. However, its opportunities for mineral extraction in the Arctic are presently concentrated in the Russian Arctic, a consequence of geopolitical factors and de-risking strategies adopted by Western countries. Simultaneously, the EU's demand for Arctic resources is on the rise, fueled by its desire to secure and diversify its access to CRMs. The EU increasingly views access to these resources as a strategic security imperative, particularly in the context of its Green Deal initiatives and the pursuit of strategic autonomy. To address this, the EU has implemented the Critical Raw Materials Act, designed to bolster its CRM value chains.

The Arctic is increasingly becoming a focal point where major powers, including the US, Russia, China, and the EU, are seeking to reshape the global geography of mining. Western nations have grown increasingly cautious of Chinese involvement in Arctic mining, citing concerns about potential environmental damage, the loss of control over vital resources, and broader national security implications. These concerns have prompted measures aimed at limiting Chinese investment in the sector. In contrast, Russia, facing growing international isolation, may increasingly rely on China for the technology, extraction capabilities, refining expertise, and export markets necessary to develop its Arctic CRMs. Increased Arctic mining activity raises significant concerns regarding environmental sustainability and the rights of Indigenous peoples, necessitating careful consideration of these factors.

The geopolitical significance of CRMs in the Arctic has profound implications for the region's future trajectory. It has the potential to escalate rivalry, particularly between China and the EU, as both seek to secure their resource interests. Arctic countries will likely face increasing pressure to coordinate regulatory standards governing mineral extraction, a crucial step in effectively managing potential projects. A central challenge will be balancing the pursuit of economic activity with the imperative to protect the Arctic's fragile environment, its people, and its communities. Cooperation between China and the EU on CRM development in the Arctic appears unlikely in the near term, a consequence of competing interests and a prevailing lack of trust. However, collaboration on environmental and climate change issues may offer a pathway to alleviate some of this distrust. Western de-risking strategies, coupled with China's responses, including the use of export controls, are actively reshaping the landscape of global CRM supply chains. The growing focus on Arctic CRMs has the potential to further impact existing Arctic cooperation frameworks and regional governance structures, necessitating a careful assessment of these broader geopolitical consequences.

Divided World, Divided Arctic: Geopolitical Realities Take Hold

A study by Rasmus Gjedssø Bertelsen, 贝牧思 titled "Divided Arctic in a Divided World Order," examines the interplay between global geopolitics and the Arctic region. The study's central argument is that the Arctic's order historically reflects, and continues to mirror, the broader international system. This perspective challenges the concept of "Arctic exceptionalism," which posits that the Arctic operates outside the influence of global power dynamics. The research analyzes how the shift from U.S. unipolarity following the Cold War to the current era of Sino-American bipolarity and increasing multipolarity is reshaping the Arctic. 

This transformation is leading to a division within the region, characterized by a U.S.-led NATO Arctic and a Russian Arctic that is increasingly looking towards the BRICS+ grouping for diplomatic, economic, and scientific-technological engagement. The significance of this study lies in its analysis of the geopolitical implications of these global power shifts on the Arctic region and its rejection of narratives that portray the Arctic as somehow separate from international political realities.   

The study's findings indicate that the Arctic's historical development has closely paralleled the evolution of the international system. This includes transitions from multipolarity to bipolarity and the post-Cold War unipolar era. The post-Cold War liberal Arctic order, characterized by circumpolar cooperation facilitated through bodies such as the Arctic Council, was largely predicated on U.S. unipolarity and its associated hegemony. However, this period of unipolarity is now receding, replaced by Sino-American bipolarity in the economic and scientific-technological spheres, alongside broader multipolarity. These global trends are reflected in a de facto division emerging within the Arctic itself. The region is now showing signs of division, with a U.S.-led NATO Arctic and a Russian Arctic increasingly seeking engagement with the BRICS+ grouping for diplomatic, economic, and scientific-technological partnerships. 

Given these global trends, the idea of a return to a post-Cold War liberal Arctic order is considered by the study to be unrealistic. The analysis suggests that significant conflict can be anticipated between the U.S./West and China and Russia concerning the broader world order, which will likely constrain Arctic cooperation and carry the risk of spillover effects from other areas of international tension.   

The era of post-Cold War globalization and cooperation in the Arctic appears to be drawing to a close, replaced by an environment characterized by increased separation and the potential for conflict. The Arctic's future trajectory is inextricably linked to the broader struggle over world order among the most powerful state actors. Consequently, the study concludes that relying on assumptions or "wishful thinking" about a return to a liberal circumpolar Arctic order does not provide a sound basis for effective policy formulation. 

However, the recent developments demonstrate some possibility to restart some cooperation in the Arctic, which is evident from the next title

Potential for U.S.-Russia Arctic Cooperation Emerges

Vyacheslav Fetisov, First Deputy Chairman of the State Duma Committee on Ecology, Natural Resources and Environmental Protection, and Chairman of the All-Russian Society for Nature Conservation (VOOP), has indicated that Arctic projects could provide a platform for improved relations between Moscow and Washington.

While recent discussions in international conventions and conferences have shown limited dialogue between Russia and the U.S. on environmental issues, Fetisov suggests that a shared recognition of the Arctic's importance as a key resource could foster closer ties. He also posited that Russia's resource holdings could serve as a point of convergence and potential cooperation.

Fetisov's comments follow increased interaction between Moscow and Washington, including a February 12 phone conversation between Russian President Vladimir Putin and U.S. President Donald Trump. High-level talks were subsequently held in Riyadh on February 18, primarily focusing on normalizing diplomatic contacts and embassy operations. (Source here and here).

South Korea Pursues Major Military Equipment Deal with Canada

South Korea is actively positioning itself as a significant military equipment supplier to Canada, dispatching a delegation to Ottawa to present various defense systems. This strategic move comes amid shifting international defense relationships.

The South Korean delegation is offering KSS-III submarines to the Canadian Forces, emphasizing rapid delivery capabilities and reliability as an ally. According to Hanwha Ocean, their submarine meets all Canadian requirements, featuring over three weeks of underwater operation capability, a 7,000+ nautical mile range suitable for Arctic operations, and a delivery timeline of under six years from contract signing.

South Korea's proposal includes substantial benefits for Canadian industry, promising a secure supply chain, local maintenance facilities, and complete access to onboard technology - contrasting with certain limitations in U.S. weapon systems.

Several European nations have already turned to South Korean military equipment, citing advantages in procurement speed and system effectiveness. This opportunity emerges as Canada navigates challenges related to technology control issues with current military acquisitions, potentially offering an alternative partnership in defense procurement. (source here)

Canada Expands Arctic Fleet with Icebreaker Contracts

Canada is expanding its Arctic capabilities through investments in new icebreakers.

Quebec-based Davie Shipbuilding has secured a CA$3.25 billion contract to build a Polar Max icebreaker, with delivery expected by 2030. The vessel will measure 138.5 meters with a 22,800 tonne displacement. Davie will use expertise from Finland's Helsinki Shipyard Oy, which it acquired in 2023. Construction begins this year.

Separately, Seaspan Shipyards in Vancouver will build an icebreaker for the Canadian Coast Guard. This Polar Class 2 vessel will be 158 meters long and 28 meters wide, with a 40+ MW power plant and 26,000 tonne displacement.

These projects strengthen Canada's position in the Arctic while supporting shipbuilding on both coasts. The investments come as climate change opens new northern shipping routes and increases activity in the region. (source: here)

Lots of developments in the Arctic domain.

Exciting times ahead! Arctic Highlights will soon be moving to a different platform. I will keep you updated.

Yours,

Alexandra Middleton