Strategically important metals comprise the rare earth elements, the platinum group elements and other main group elements of importance to the UK. Of particular importance are those specialist metals that are vital to advanced manufacturing, low-carbon technologies and other growing industries.
Supply risks to strategically important metals have been a focus of recent media attention. The perception of scarcity of certain minerals and metals may lead to increased speculation and volatility in price and supply. For this reason, there is a need for accurate and reliable information on the potential scarcity of strategic metals.
We heard that most strategic metal reserves are unlikely to run out over the coming decades. In practice, improved technology, the use of alternative materials and the discovery of new reserves are likely to ensure that strategic metals are accessible but there may be price implications. There are, however, concerns about supplies to UK users. The fact that China currently supplies over 97% of the world's rare earth elements has highlighted the risk of monopolies and oligopolies in strategic metals. China recently imposed export quotas. We are also concerned by reports of hedge funds buying up significant quantities of strategic metals. Furthermore, the increasing global demand for strategically important metals from emerging economies and new technologies will be a significant factor affecting their price, and therefore availability in the future.
In order to meet the growing demand for strategically important metals, there may be a need to exploit lower grade minerals, much of which can be found in developing countries outside China. Although there will be a significant environmental and monetary cost, there is an opportunity for developing nations to benefit from mining revenues. Fair royalties on mining sales will equip governments with funds that could be used to help improve social and environmental conditions. Broader action on improving the social and environmental impact of mining needs to be taken internationally.
There is a need for the Government to be "joined up" on resource issues. In particular, the Government needs to clarify which department leads in the provision of information on strategic metal resources and how this information is updated and shared across government and then disseminated to businesses. The provision of such information will help businesses prepare for any potential future resource risks.
We also found that there is a lack of information available on the strategically important metals contained in finished and semi-finished imports, as well as the amounts and locations of strategic metals in the national waste stream. We recommend that the Government conduct a review of metal resourcesfinished and semi-finished goods and wastein the UK. This will help to identify routes to the recovery of strategic metals, and will also empower the private sector to realise the economic potential of recovery and recycling.
We are pleased that the metal recycling industry in the UK is recycling 90%, by weight, of collected waste and that substantial quantities of platinum, rhodium, palladium, gold and silver are being recovered, mainly from recovered waste electrical and electronic equipment. However, it is of great concern to us that some strategic metals, which are often in products in small quantities, are likely to be lost in the 10% not being recycled.
These small quantities of strategic metals might be more effectively recycled by embracing a "cradle-to-cradle approach" whereby products are designed for disassembly. These products can then be returned to manufacturers at the end of their useful life for resource recovery. We have been given examples of the financial benefits to manufacturers that have tried this approach. We would like to see widespread use of this approach in UK manufacturing, and intelligent product design is key to its effective implementation.
We heard concerns that the UK was exporting large quantities of scrap metal and that the export of scrap and waste electrical and electronic equipment was environmentally damaging. Given that scrap metal and waste electrical and electronic equipment are a potential resource for the UK, it seems nonsensical to be exporting them abroad. The Government should be actively working towards minimising the export of these materials.
Finally, there are unexploited deposits of various strategic metals in the UK but, in many areas, it is unclear whether extraction is economically viable. It is important that the Government invests in the necessary research, to ensure that future domestic mining has the least possible environmental impact. The Government needs a comprehensive and up-to-date understanding of potentially valuable domestic mineral resources. We are concerned, however, by reports that uncertainty and delay in the planning process is preventing some mining companies from even considering prospecting for reserves in the UK. We recommend that the Government classify mines, in particular those containing strategic metal reserves, as nationally significant infrastructure, under the Planning Act 2008.