A rock and a hard place: building critical mineral resilience – Report Summary

Summary

Critical minerals are those that are essential to the UK’s national security, to its economic resilience and to its ability to meet net zero targets. They are defined in part by their vulnerability to supply disruption, such as the dramatic halt to some global supply chains during the covid-19 pandemic and the intentional interruption following Russia’s renewed illegal invasion of Ukraine. Critical minerals supply is not a geological challenge but a geopolitical one. The vast majority of critical minerals are concentrated in countries that are autocratic, non-aligned, or actively hostile. China dominates global critical minerals processing and has proved ready to exploit the economic advantages accruing from this global dominance and to retaliate. Critical minerals need to be understood through the lens of a global geopolitical competition that is as much about political power as practical industrial capacity. These insecurities, and growing global competition, have prompted industrial countries to develop critical minerals strategies aimed at strengthening their supply chains.

The UK Government has been behind its allies in acknowledging the aggressive capture of large parts of the critical minerals market by China but has belatedly produced a Critical Minerals Strategy and Refresh. However, the scope of the Strategy is too broad to be helpful as a guide to industry, which needs realistic targets and timeframes. Nor does it convey the sense of urgency and need for immediate, decisive action which is of paramount importance if the UK is to deliver on its net zero commitments and enhance its long-term economic resilience in the face of mounting challenges. The UK cannot afford to leave itself vulnerable on supply chains that are of such strategic importance.

We urge the Government to define the UK’s role in the critical minerals value chain and to set out a coherent ‘Team UK’ proposition to explain the UK’s offer to global partners. The UK is in a strong position to promote high environmental, social and governance standards in mining and we set out ways in which it should do so. As well as being the right moral choice, high standards are what set the UK and its partners apart from countries like China with whom we cannot compete on grounds of scale or cost.

The diplomatic service is well placed to deliver on the Government’s ambitions. But to do so, the Foreign, Commonwealth and Development Office needs to pursue a strategic approach that considers the Government’s domestic priorities, its geopolitical interests and the need to preserve relationships with countries forming important links in the value chain. The UK is in a global race for technological advantage, and it is one in which we cannot afford to be left behind. It must compete, and compete hard, to demonstrate that the challenge of critical minerals is being taken seriously. 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 tech industries.

Given the Prime Minister’s focus on the UK’s strengths in science, technology and innovation, there is an opportunity for the UK Government to show leadership on critical minerals. The UK has huge advantages in engineering and chemical engineering, in innovation and the knowledge industries, in green energy and mining expertise. The Government needs to demonstrate a real commitment to support these sectors if it is to attract investment. It should act as the interface between the public and private sectors and the people of this country, drawing conversations around foreign policy, mining, industry, and climate out of their echo chambers and into wider discourse. We agree with the Prime Minister that an honest public conversation about the way the UK reaches its net zero targets and secures economic resilience, including the trade-offs around mining, is crucial.