UK dependence on China for critical minerals called dangerous

Processing is the bottleneck

Committee chair Liam Byrne said critical minerals had become the foundation of the new economy. Without them, he said, the UK would be unable to rearm, develop AI or reach net zero. Byrne also noted that 16 years after China first used control over rare earth supplies as a tool of pressure, the country remained vulnerable.

This is the second time in a week that Byrne’s committee has criticised government policy on China. China controls a significant share of global supplies of rare earths and other critical minerals, as well as the products made by processing them. These materials are needed to manufacture military aircraft, car locking systems, refrigerators and washing machines.

At the committee’s hearings, processing raw materials was identified as the main bottleneck. China dominates the refining of seven categories of minerals, including lithium for electric vehicles and rare earths used in the fuselages and wings of military aircraft so they can withstand extreme temperatures.

According to figures presented to MPs, demand for lithium will increase 45-fold by 2030. Over the same period, demand for rare earths used in permanent magnets in military aviation and other fields will rise 16-fold. The UK, meanwhile, intends to rebuild its military capabilities.

China could abruptly halt rare earth supplies: it did so in 2025. The committee says dependence on Beijing poses a strategic threat to the UK economy and national security.

Supply disruption has already threatened the car industry

Separate restrictions on supplies of legacy chips emerged after a dispute over the Netherlands’ intervention in the operations of Nexperia, a company owned by China. At a hearing, MPs were told that in October last year the European car industry had been “days” from stopping production.

The EU, the US and other countries face a similar risk of rare earth supply disruptions. In the committee’s view, the UK is not doing enough to find alternative suppliers.

In October last year, Donald Trump agreed with Xi Jinping to a one-year delay in global restrictions on rare earth exports. After the Chinese president’s recent visit to Washington, the delay was extended until January 2027. But, the report says, the extension leaves the UK dependent on relations between the US and China.

The committee called joint work with G7 partners, other European countries and Indo-Pacific nations the most realistic solution. It proposed that countries pool demand and attract new suppliers.

A ten-point plan

The committee said its inquiry was hampered by the government’s lack of transparency. MPs cannot see which capabilities the authorities intend to protect, what vulnerabilities they have identified or which projects they are backing to reduce risks.

The committee’s ten-point plan includes the following measures:

The committee said it could not yet be confident that the government would meet even one of the ten criteria. The report also calls for new institutions and greater financial capacity.

A government spokesperson rejected the claim that the country lacks a strategy for critical minerals. The authorities, the spokesperson said, are allocating 400 million pounds to expand domestic production and processing and develop international partnerships. The strategy sets targets for 2035: meet 10% of demand through domestic production, 20% through recycling, and source no more than 60% of any critical mineral from a single country.

Dataist’s take: the dispute is not just about mining volumes. The committee points to dependence on Chinese processing and a lack of transparency in the government’s plans. The 2035 targets set benchmarks, but do not in themselves remove the risk of disruption that the report links to decisions by China and relations between the US and China.