UK to produce 10% of critical minerals domestically to avoid overreliance on imports amid China's rare earths dominance

British Prime Minister Keir Starmer's administration has introduced a plan to boost domestic production of critical minerals, aiming to produce 10% of the UK's needs by 2035, while sourcing 20% from recycling. The initiative includes producing at least 50,000 tonnes of lithium and a £50 million funding boost for local businesses.

In a statement issued on November 22, the Starmer administration said, “The move comes as the Government doubles down on shoring up supply chains as part of its push on national security.”

With the £50 million funding, the UK aims to reduce “overreliance” on foreign imports of critical minerals, which are essential elements used in solar panels, wind turbines, electric vehicle batteries, and electronics.

UK's critical energy plan

According to the UK's critical energy plan, the government will collaborate with the sector to utilise the UK’s leading capabilities. This includes Europe’s largest lithium deposit in Cornwall, one of the world's largest tungsten sources, a major nickel refinery in Clydach, Swansea, and the only Western source of rare earth alloys used in magnets for wind turbines, F-35 fighter jets and other resources.

Through this plan, the UK aims to meet 10% of its demand through domestic production, with 20% from the recycling of products.

This is the first time the UK has set out clear, tangible ambitions to grow domestic production and recycling, while reducing our reliance on third countries.

“Critical minerals are the backbone of modern life and our national security – powering everything from smartphones and fighter jets to electric vehicles and wind turbines,” Starmer said in a statement.

The new strategy also aims to produce at least 50,000 tonnes of lithium in the UK over the next decade.

The Government will implement the strategy by helping UK businesses expand and increase their production to advance important minerals projects.

Additionally, businesses’ industrial electricity costs will also be reduced through the government’s British Industrial Competitiveness Scheme (BICS), encouraging firms to expand and attract new investment into the UK.

Why are critical minerals important?

The critical minerals sector adds £1.79 billion to the UK economy and directly employs over 50,000 people. Currently, more than 50 critical mineral projects are based in the UK, focused on extracting and refining these essential materials.

Key regions such as North East England, including County Durham and Teesside, as well as the South West in Devon and Cornwall, possess vital resources.

Why is UK reducing reliance on critical mineral imports?

The UK government recognised that China currently leads in the production and supply chains of critical minerals, controlling 70% of rare earth mining and 90% of rare earth refining.

This makes Britain vulnerable to overreliance on a select few exporters for its supplies of materials needed to power items such as electric vehicles and wind turbines.

In the UK alone, demand for copper, used in household electrical plugs and car brakes, is expected to nearly double by 2035. Meanwhile, demand for lithium, essential for laptops and electric vehicles, will surge by 1,100%.

The government has hence decided to ensure no more than 60% of the UK’s supply of any one critical mineral is imported from any one country by 2035.

“For too long, Britain has been dependent on a handful of overseas suppliers, leaving our economy and national security exposed to global shocks,” Starmer said.

“That is why we are taking decisive action to change that, boosting domestic production, ramping up recycling, and backing British businesses with the investment they need to compete on the international stage and drive down the cost of living for people at home,” he added.