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Trade Tuesday: Does the UK have the minerals?

Tech Trade Concept
Public Affairs
trade tuesday

Western leaders are trying to avoid another 2022. Last year, auto-makers, wind turbine engineers and solar panel manufacturers were forced to dramatically slow their production efforts. Despite a race to the net zero deadlines of 2030 and 2050, the key ingredients for the energy transition began to run out.

Cobalt, lithium and some rare earth metals were in short supply due to three main reasons: a knock-on effect from the Covid-19 pandemic, the war in Ukraine and trade disputes with China. It was a tripartite of tension for the clean technology industry, and one which won’t be going away any time soon.

The situation awoke the UK Government from its slumber on the issue. The US had already published its own national strategy around critical minerals in 2019. So did the International Energy Agency (IEA). The UK published its own plan in July 2022.

The document promised to accelerate growth of the UK’s domestic capabilities, collaborate with international partners, and enhance international markets to make them more responsive, transparent and responsible.

There was more action on this April when Australia and the UK signed a ‘statement of intent’ to strengthen cooperation on critical minerals. The Australians, who are world leaders in the production of lithium and iron ore, promised to “build resilient, sustainable, and transparent supply chains for critical minerals” with the UK.

In return, the UK and the US have provided Australia with a new set of ‘hunter-killer’ nuclear submarines. The gesture is intended to sure-up Australia amid heightened tensions in the Indo-Pacific region. But the submarines will only start to come into action at the end of the decade.

The UK has also now teamed with Canada (a global leader in copper, nickel and cobalt production) on critical minerals. The agreement will encourage skill-sharing, the implementation of safe supply-chains and the promotion of high environmental, social and governance standards.

It is unclear what the UK has given Canada, but both countries are members of the Sustainable Critical Minerals Alliance, which also includes France, Germany, Japan. Together, they are attempting to challenge China’s dominance of the critical minerals sector.

In response to an Executive Order from Donald Trump in 2020, the United States Geological Survey published a diagram outlining the main critical minerals and the countries which oversaw their production. It looked a lot like a bingo card, and China almost had a full house.

South Africa also scored highly. The UK is working in cooperation with the country and it will host the first African Critical Minerals Summit this winter. Investment bank Investec has identified this as a potential ‘golden opportunity’ for South Africa.

Quietly, the need for critical minerals is already changing the global political landscape. It is also undermining neoliberalism. The free market can no longer be fully relied on. The UK is making plans to produce its own critical minerals, in an effort that could see thousands of workers re-skilled in the mining, geology and engineering sectors.

“Building on centuries of expertise, we can reposition the UK as an innovation and skills leader. The UK also has a role as an international dealmaker, leveraging our expertise in regulatory diplomacy, our extensive engagement in multilateral forums and our strong relationships with mineral-rich producer countries and consumer markets,” the government promised.

The plan is to look further at places like Cumbria, Pembrokeshire and North-west Wales.

But it won’t be straightforward. The global mining industry is facing a skills shortage. Who will even train the new critical minerals workforce?