UK found to be ‘dangerously’ reliant on China for critical minerals needed for defence and AI

MPs on the business select committee have called for an urgent centralised policy and the creation of a 'critical minerals finance facility' to help fund rare earth and other critical mineral mines. The facility would use grants, equity and debt to accelerate a diversification programme away from Chinese supplies.

Strategic vulnerability

China has a stranglehold on the world's supply of rare earths and other critical minerals, as well as their refined byproducts used in military jets, car-locking systems and consumer products. The committee found that the processing stage is where the bottlenecks occur, with China dominating the refining of seven categories of minerals.

Growing demand

MPs were told that demand for lithium alone would increase 45-fold between now and 2030, leaving the UK in a high-risk dependency relationship with China. The demand for rare earths needed for permanent magnets used in military jets would rise 16-fold in the same period as Britain seeks to rebuild its military capabilities.

International solutions

The committee identified that the UK is at the mercy of US-China relations after Donald Trump secured a one-year reprieve on global export restrictions from Xi Jinping, extended to January 2027. The most 'realistic' solution was for the UK to work closely with G7 partners, Europe and Indo-Pacific countries to 'aggregate demand' and bring in new suppliers.

The committee's 10-point plan includes identifying domestic mining opportunities, encouraging businesses to reduce procurement from China, unlocking investment, and assessing planning barriers. A government spokesperson denied the lack of a strategy, citing £400m being delivered to ramp up domestic production and recycling.