UK left vulnerable by government inaction on critical minerals, MPs warn

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Decades of inaction in policymaking to ensure access to critical minerals has left the UK vulnerable to China’s dominance of raw materials, a cross-party group of MPs warned on Friday.

A report by the House of Commons foreign affairs select committee found that the UK had fallen behind its allies in securing supplies of elements such as lithium, graphite and tin, putting the country’s competitiveness in advanced manufacturing under threat.

“The cost of failure will be the loss of key industries, such as the automotive sector and the ecosystems of research, innovation and manufacturing that support green technologies,” it said.

The risks of relying on China were underlined this year after Beijing imposed export restrictions on gallium, germanium and graphite. It dominates the global supply chain for all three critical minerals, which are vital for semiconductors and manufacturing of electric car batteries.

“For three decades we have been asleep at the wheel,” said Alicia Kearns, committee chair. “It is particularly clear that we need to confront the weakness created by our dependency on a single state: China. These minerals power modern life and if China pulls the plug, we will all pay the price.”

The UK published its first critical minerals strategy in July 2022, followed by a “refresh” earlier this year. But the latest report said those documents lacked the level of detail and prioritisation needed to be useful.

“While the UK’s allies make substantial progress on implementing their strategies, the UK government has yet to define its most urgent priorities and push industry to deliver them,” the report said.

The US, Canada and the EU have all introduced more effective policies backed by subsidies to boost the supply of critical minerals independent of China, according to the committee.

Radical shifts by the US and other allies, geared towards a new era of competition with China, have exposed the ruling Conservative party’s reluctance to engage in more interventionist economic policies. “The government has tried a hands-off approach, but it has left the UK too vulnerable on what is, fundamentally, a security issue,” the report said.

The UK has taken some steps forward in supporting mining and refining projects. In August, the UK Infrastructure Bank provided £24mn in financing to Cornish Lithium to develop lithium projects in Cornwall, the first state equity investment in a critical minerals project.

However, the report found that the state support on offer was “relatively small when compared with the scale of its ambitions”, which includes establishing the UK as a centre for the manufacture of electric cars and the batteries that power them.

A UK government spokesperson said it would “carefully consider the recommendations” while adding it had “played a leading role in developing a co-ordinated response to critical mineral supply chain risks” with other countries.