Europe's largest known deposit of rare earth elements -- key for the production of electric cars -- has been discovered in Sweden's far north, Swedish mining company LKAB said Thursday.

LKAB said the newly-explored deposit, found right next to an iron ore mine, contained more than one million tonnes of rare earth oxides.

"This is the largest known deposit of rare earth elements in our part of the world, and it could become a significant building block for producing the critical raw materials that are absolutely crucial to enable the green transition," LKAB's chief executive Jan Mostrom said in a statement.

"We face a supply problem. Without mines, there can be no electric vehicles," Mostrom added.

The full extent of the deposit has not been established yet.

Mostrom said it would likely "take several years to investigate the deposit and the conditions for profitably and sustainably mining it."

Asked when the deposit could actually be mined, Mostrom said at a press conference it would largely depend on how quickly permits could be secured.

But based on experience it would likely be "10 to 15 years", he said.

The find was presented as a delegation from the European Commission visited Sweden, which took over the rotating EU presidency at the start of the year.

Swedish Energy Minister Ebba Busch noted that the "need for minerals" is great as the EU is striving to transition to fossil-free production.

The European Union has agreed to phase out new CO2-emitting vehicles by 2035, effectively banning combustion engine cars.

"Electrification, the EU's self-sufficiency and independence from Russia and China will begin in the mine," Busch said.

Politicians must provide industry the conditions needed "to switch to green and fossil-free production," she added.