UK must be less dependent on China for critical minerals, says thinktank

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The UK must become less dependent on China for critical minerals, an influential thinktank has concluded before a government strategy decision in the spring.In a report on rare earth minerals, which are essential components for hi-tech products from mobile phones to missiles, Labour Together said ministers should “de-risk” supply chains and reduce reliance on China by building partnerships with other countries.The report said China’s dominance in critical mineral supply chains created “vulnerability” and the UK was at greater risk of being singled out after Brexit.Amid escalating trade tensions with the US before Donald Trump’s presidential inauguration, China banned shipments of antimony, gallium and germanium to the country earlier this month.The UK government has said it will produce a new strategy on critical minerals in the spring.

Labour Together said this should be closely informed by the government’s industrial strategy, also due in the spring, to determine which critical minerals and stages of the supply chain the UK will be most reliant on in the future,Critical minerals are essential for the green transition,Data suggests China extracts about 70% of the world’s rare earth metal ore, dominates the processing and refining of it and uses it to manufacture 90% of the global supply of neodymium magnets, the magnet most commonly used in wind turbines,The report also said it was important for China to be “engaged where possible, eg on mining standards, rather than treated as an adversary”,A paper by the Royal United Services Institute thinktank in October said the UK should work with China on improving environmental and labour practices in mining and engage with Chinese companies operating in countries eligible for international aid.

Labour Together said the government should improve the coordination of cross-Whitehall work on critical minerals, work more closely with the EU, promote responsible mining standards internationally and lead a campaign to drive investment.The Conservative party published a critical minerals strategy in 2022, which the foreign affairs committee said was “too broad and does not convey the sense of urgency”.Alicia Kearns, the Tory committee chair at the time, said that for three decades governments had been “asleep at the wheel”.Labour Together described the Tory approach as “too slow, too general and given too little support”.Felix Cazalet, a policy fellow at the thinktank and author of the report, said: “The new government should be more alert than the last to risks, including from the concentration of production in countries like China, while taking a pragmatic and targeted approach in the new strategy.

“This should focus on the key things that matter for the UK, and include working more closely with international partners such as the EU to increase responsible investment in resilient supply.The new strategy is an opportunity to secure the materials we need for the UK’s growth, security and green ambitions.”Ruby Osman, a China policy adviser at the Tony Blair Institute, said ministers needed to prepare for disruption if the critical mineral export restrictions targeted at the US were extended to the UK.“When it comes to China, our biggest problem has been timing.China has been building its remarkable market dominance for decades – the UK only released its first critical mineral strategy in 2022,” Osman said.

“Diversification is, rightly, likely to be at the heart of Labour’s new strategy.But the UK’s strategy also needs to be realistic – we can’t ignore quite how dominant China is at every step of these supply chains.Even if it wanted to, the UK is never going to be able to cut China out entirely, and that means we’re going to need some considered engagement.”In 2010, China introduced an export ban on rare earth elements to Japan after a dispute.The clampdown lasted only two months but led Japan to diversify its supply chains and become less dependent on China.

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