UK looks beyond China to secure rare earths
Ministers in secret talks with Commonwealth countries to ensure supply of materials for industry
FEARS CHINA will “turn off the taps” on Britain’s green revolution have forced ministers to enter secret talks with seven commonwealth countries to mine their rare earths.
Officials from the Department of
International Trade and the Foreign Office have met representatives from Australia, Canada, Malawi and Tanzania in a bid to persuade them to supply rare earths, as well as critical metals such as lithium to the UK.
Rare earths are found in abundance across the world, but are difficult to process and China controls 90 per cent of the market. Examples include lanthanum, neodymium and dysprosium
The UK has no known deposits of rare earths, unlike other major economies such as the US, Canada and Australia, which are also grappling with the problem. Rare earths are used in a variety of technology, from fighter jets to MRI machines and loudspeakers, but also in the motors of electric vehicles (EVs) and wind turbines. The worldwide transition to green infrastructure is expected to put pressure on demand.
China also has dominance of the supply of other key metals such as cobalt, nickel and lithium, which are used in the batteries of EVs and other technology and will become vital to maintaining the UK’s automotive industry.
The talks are part of the Government’s efforts to end dependence on
China, code-named Project Defend, over concerns that geopolitical tensions could threaten future supplies. The need to ensure a rare-earth supply chain was part of the Government’s recent defence and foreign policy review.
The topic is understood to be “top of the conversations” between representatives from Australia and the UK.
“If we want a renewable future, we need to have those metals and minerals,” said Alexander Stafford MP, cochairman of the all-party Parliamentary Group for Critical Minerals. “China could literally turn off the taps, which means we couldn’t build or maintain our new energy supply.”
In the wake of Brexit, the Government is taking advantage of greater flexibility in its trade agreements, and a deal on critical metals could be part of the free-trade agreement with Australia.
The subject is expected to be high on the agenda at the meeting of G7 countries in June in Cornwall, which is also home to untapped resources of lithium.
There is concern that the UK has fallen behind in the race to secure these critical metals, with the US and the EU already developing coordinated strategies, which could threaten Boris Johnson’s green industrial strategy. “The penny has started to drop,” said Simon Moores, managing director of analysts Benchmark Mineral Intelligence. “There’s understanding certainly within the EU, China and the US, that this is a fight for the future of the automotive industry, and the energy industry.”
He said “the next three months will decide” whether the UK Government has a coherent strategy ahead of the G7.
“The UK is taking its place in the queue,” said Ian Higgins, the managing director of Less Common Metals, the only rare-earth magnet alloy producer outside China and Japan. The company is being funded by the Government to investigate potential for a UK supply chain.
“The challenge we have is that the most attractive option for these people is simply to sell to China,” he said.
The Government is reaching out to countries with which it has particularly good relations, including Australia, which has the only rare-earths facility outside of China.
It is also reaching out to African countries in the Commonwealth, and has deployed its embassy in Malawi, where London-listed Mkango is developing a rare earths mine. The company is considering the UK for its processing facility, seen as crucial to keeping critical materials within the domestic supply chain.
The UK is also understood to be looking to Tanzania, which is in the process of approving its first rare earths mine.
Outside of the Commonwealth, mining company Pensana is planning to open a rare-earths processing plant in Hull, though there are concerns over Chinese control of its mine in Angola.
Andrew Bloodworth, policy director of the British Geological Society, said the Government could use its expertise in mining and finance to provide support for countries looking to counter China’s grip on the supply chain.
The topic could become a source of tension with the EU, which has very few of its own resources for rare earths. But Mr Higgins cautioned: “At the moment the threat is not Europe to the UK, or UK to Europe, the threat is China to all of us.”
‘The challenge we have is that the most attractive option for these people is simply to sell to China’