The UK is poised on the edge of a critical minerals revolution — or potential disaster.

In November 2024, the British Geological Survey identified 34 raw materials as critical, an increase from a list of 18 critical minerals in 2021. Crucially, of the 18 minerals classed as critical in 2021, 17 of the 18 are still critical.

At the recent Resourcing Tomorrow Mines and Money conference in London, one of the largest mining events in Europe, we found a domestic mining industry ready to take on the challenge, but struggling to secure the investment to unleash their potential.

For the UK, the stakes couldn’t be higher.

The UK’s energy crisis

The UK government has set the ambitious target to have 95% of electricity in the country generated from low-carbon sources by 2030.

But, the UK faces multiple, concurrent challenges in its energy transition, from energy prices to critical mineral dependency, investment risks to foreign competition, including:

• the UK has some of the most expensive industrial electricity prices in the world (due primarily to a spike in natural gas prices after Russia’s invasion of Ukraine and transition to renewable energy)

• as highlighted at the start, the UK has expanded its critical mineral list to 34 raw materials and is almost “completely dependent” on imports for all of them. China is the leading producer of 11 of the 18 critical minerals identified by the UK, including the 17 rare-earth elements.
  
  The full quote from the report is worth reading in full:
  
  “The UK is almost completely dependent on imports for critical minerals and mineral products. It currently lacks the necessary mines to be self-sufficient and faces many obstacles to developing them. Existing mineral deposits within the UK, even if exploited, would take years to produce a yield. This means that, for decades to come, the country will remain entirely reliant on global supply chains that are under increasing pressure from other countries scrambling to access the same limited resources. More concerning, the UK will remain dependent primarily on China as the dominant global player in these supply chains”
  — House of Commons, Foreign Affairs Committee report: A rock and a hard place: building critical mineral resilience

• the country is falling behind on its target on its offshore wind power targets, and reportedly won’t meet them until 2048, 18 years too late, and is dependent on China and Europe for turbine manufacturing

• automaker, Vauxhall, is set to close its van factory in Luton, where it planned to produce its electric vehicles, blaming policy designed to speed up the transition to EVs in the UK. There are reports Nissan may be next. In the meantime, the UK has not imposed any new tariffs on electric vehicles or critical mineral exports from China, contrary to the US and EU
• the new Labour government plans to ban new coal mines in the country and pledged to raise taxes on oil and gas, and halt new exploration licences, in the North Sea

A dependency on foreign imports of critical minerals, energy and EVs has undermined the UK’s own industry, as well as exposing the UK economy to geopolitical risks and higher costs — and higher electricity prices mean governments are also vulnerable to internal pressures (for example, a third of pensioners will struggle without a winter fuel allowance for pensioners).

So, what’s the plan?

UK strategy towards energy and critical mineral dependence took a decisive turn after:

• the Covid pandemic exposed the UK’s reliance on China
• the invasion of Ukraine by Russia in 2022 exposed the UK’s reliance on Russian natural gas exports

Since 2022, there have been a series of reports and government initiatives to secure energy and critical mineral supply.

The main thrust of the strategy is to develop international cooperation to finance new projects and secure energy and critical mineral supply:

• the announcement by the Industry Minister of a new Critical Minerals Strategy Strategy expected in early 2025
• an economic partnership between the UK and US to “help UK-based firms involved in the mining, recycling and refining of critical minerals who are suppling US electric vehicle and battery manufacturers – benefitting this growing industry. This is a a sector with companies all over the UK, including nickel production in Wales and lithium processing in Teesside.”
• nine bilateral agreements to secure critical mineral supply, including Kazakhstan, Zambia, Japan, Saudi Arabia, Indonesia, South Africa, Canada, Australia
• joining the Minerals Security Partnership and Minerals Security Partnership Finance Network (MSPFN) with 15 other nations, to support and develop investment into strategic critical mineral projects
• formation of the Critical Minerals Intelligence Centre (CMIC) in 2022 to support securing supply of critical minerals
• advocacy by MPs to support domestic mining production across the UK
• the BEIS Automotive Transformation Fund (ATF) which has up to £850 million of funding for late-stage R&D and industrialisation projects, as well as the recently set up UK Export Finance (UKEF) to offer financial support for overseas projects that supply critical minerals to the UK’s industrial growth
• a cross-party agreement to build out new nuclear capacity, with new large scale reactors and small modular reactors across the UK (in our opinion, most likely spear-headed by Rolls Royce after a competition concludes in 2025)
  
  The current Energy Secretary, Ed Miliband, has stated: “My message is clear: if you want to build a nuclear project in Britain, my door is open.”
• extend lifespan of existing nuclear plants
• encouraging investment in refining, such as Pensana’s proposed rare earth processing hub in Saltend (the second-largest magnet materials refiner outside of China) and a large-scale lithium refiner in Teeside
• set up “Great British Energy” with a capitalization of US£8.3 billion to “own, manage and operate clean power projects”
• the promise, by Energy Secretary, Ed Miliband, to double onshore wind, treble solar and quadruple off-shore wind

The prize

“Supporting this industry today will ensure it becomes a beacon of success for the UK economy. On the other hand, failure to support the industry now exposes us to a multitude of risks. There is no question that critical minerals are central to the government’s economic ambitions“

— Perran Moon, Member of Parliament for Cambourne, Redruth & Hayle

The CMIC has calculated the UK likely possesses reserves of all but one (niobium) of the 18 minerals identified in the national Critical Minerals Strategy, including:

• reserves of lithium in Cornwall
• tungsten and tin in Devon
• lithium in Scotland
• antimony and rare earths in mid-County Tyrone

Talking to UK mining companies on the floor of the Resourcing Tomorrow conference, several key trends stand out:

• the biggest concern is financing: will the project be viable and what is the timeline for a return on investment.
  
  The different approaches to find funding by companies include:
  • the UK Shared Prosperity Fund (after Brexit, a eplacement for the European Structural and Investment Programme (ESIF)), UK Infrastructure Bank, etc
  • and crowdfunding, which also helps with local community buy-in
  
  Support from government would obviously be appreciated. As clearly laid out by the CMIC: “Without Government investment, the market will struggle to establish supply chains as rapidly as they will be required.”
  
  However, the government has ruled out a US-style subsidies approach due to costs and instead opted for a market-first approach.
  
  But, on the doorstep of the second largest finance center in the world, the miners know their biggest challenge is to encourage the City of London and FTSE to become a resource-friendly exchange. The government, so far, seems to have done little to encourage it.
  
  “We are not reassured that the [UK government] Strategy conveys an understanding of this urgency. The Government’s response to the global challenge has been slow and continues to lack a sense of pace”
  — Duncan Wood, President for Strategy and New Initiatives at the Wilson Center, to CMIC
• permitting is lengthy, but it not the biggest issue; yes, it’s a hurdle, but almost every miner we talked to explained that it could be overcome
• it’s essential — and very possible — to bring the local community on side through public engagement
• concerns over wider infrastructure issues, such as nearby rail and roads for logistics
• the first step is all about reopening old mines, particularly in regions such as Cornwall with a rich history of mining

Conclusion

Critical mineral security is central to solving the UK’s energy supply chain risk.

We do not think the UK is about to become a major critical mineral hub anytime soon. However, the pieces of a puzzle as a international hub for some critical mineral mining, such as tin and lithium, as well as refining, are very viable.

Leveraging finance, especially through London and international platforms such as the Minerals Security Partnership Finance Network (MSPFN), will be key to the development of both domestic and international supply chains.

The UK can also play a central role in the second nuclear renaissance rolling across the West with small nuclear modular reactors.

The rewards for success would be substantial, including:

• a secure, cost-effective national grid would drive industry costs down and attract global investment (for example, fast tracking “AI Growth Zones”)
• centre of a global critical mineral finance hub
• roll-out of nuclear small modular reactors, especially from a British company such as Rolls Royce, would position the country as a world leader

The UK government’s slow response to global energy and mineral supply shocks is costing the UK dearly, even threatening the country’s economic foundations — but, it is not alone (with issues across Europe and the US), so there is still an opportunity to take a global lead across a variety of sectors. And the rest of the UK industry has not been standing still.

The UK is poised between revolution or risk of disaster. The next few years will be pivotal.