The UK has unveiled a critical minerals strategy to secure the supply of vital commodities such as lithium and silicon.
The Critical Minerals Strategy aims to invest in localised sourcing of minerals, bolster domestic production, and build the UK’s skills base. It promises research and development and greater reuse and recycling.
The report said: “Minerals such as graphite, lithium and silicon are vital to the economy, as they are key components of products ranging from laptops to aircraft. But supply chains are complex and markets are volatile, with most critical minerals sourced from just a handful of countries, particularly China.
“Ensuring UK firms have a resilient and sustainable access to critical minerals will be vital for the growth of future industries such as EV manufacturing, which will support jobs across the UK for decades to come, and national security.”
Rising demand has caused lithium prices to increase nearly 400% year-on-year, as of May 2022. The price of one rare earth commodity, cerium oxide, rose by over 400% in a matter of months in 2010.
Production of critical minerals is expected to rise sharply as a result of the strategy, some by as much as 500% by 2050.
The strategy will also push for better environmental, social, transparency and governance standards in critical mineral markets worldwide.
Other aims include diversifying worldwide supply, supporting UK companies’ ability to compete globally, developing diplomatic and trading relationships, and improving transparency and traceability.
The government said it would fulfil these aims through a number of actions:
Reducing barriers to domestic exploration and extraction of critical minerals
Signposting financial support
Training miners, geologists, and engineers
Accelerating a circular critical minerals economy
Implementing regulation to promote recycling and recovery
Assessing challenges and opportunities of extracting deep-seabed minerals
Working internationally to promote solutions to global issues in the supply chain
Role-modelling ESG standards
Examples of financial support opportunities for UK critical minerals businesses include the Automotive Transformation Fund – funding support for strategically-important technologies, including batteries, motors and drives, power electronics and hydrogen fuel cells; and the UK Infrastructure Bank, which focuses on increasing infrastructure investment.
The Department for Business, Energy and Industrial Strategy launched the Critical Minerals Intelligence Centre, to provide data and analysis on sources of the supply, demand and market dynamics of critical minerals, as well as insights on factors affecting these markets such as ESG issues and geopolitical events.
The UK government has also announced the opening of a £145m magnet material refinery in Saltend.
Pensana’s £145m Saltend site is the second-largest magnet materials refiner outside of China, boosting the UK’s electric vehicle supply chain.
Kwasi Kwarteng, business and energy secretary, said: “With rising geopolitical threats, Britain needs to move quickly to secure the rare earth minerals necessary to supply our future industries. Most of these minerals are sourced from just a handful of countries, leaving Britain vulnerable to market shocks. We need to develop and strengthen our own supply chains to protect our national security into the future.
“Russia’s illegal invasion of Ukraine is a timely reminder of how global events beyond our control can impact supply chains, with profound consequences for the economy. To boost our domestic resilience, today’s Critical Minerals Strategy lays out our plan to bring high value manufacturing back to the UK to protect our country’s future access to supplies.”
In 2020 the European Commission announced an alliance to strengthen the supply of rare earth metals.