A critical look at priorities for the UK’s new minerals strategy

In early December, the UK Government announced its plan to unveil a new Critical Minerals Strategy (CMS) in the spring.

Critical minerals are essential not only to the UK’s long-term economic security but also the government’s more immediate growth agenda.

Indeed, prior to Labour’s arrival in Westminster last year, the view has been that the UK had been sleepwalking towards insecurity – in part due to an over-reliance on Chinese supply chains. The head of the UK’s minerals supply watchdog, Gavin Mudd, recently went as far as to warn of potential bottlenecks under the current regime.

A vision for the future amid rising international tension

If the new CMS is going to support growth and the future potential of green industries in Britain, it will need to outline a specific plan to strengthen the supply chain in the face of complex and evolving geopolitics.

As such, it is clear the UK needs to prioritise a range of collaborations with international partners. At a foundational level and notwithstanding the prevailing narrative in geopolitics, the government will need to maintain relations with China, which controls large parts of the critical minerals supply chain, particularly in production and processing. We have already seen that strengthening a previously strained relationship is on Labour’s agenda, with Chancellor Rachel Reeves making her first visit to Beijing in January.

However, as Donald Trump’s return to the White House and the US’ trade and mining agenda evolves, it is clear that the UK will need to walk a fine line to maintain the economic support of both countries. Already, the new president has made overtures towards Greenland, with sceptics recognising the Danish-owned territory’s rich mineral reserves as much as its role in international security.

Elsewhere, nations like Saudi Arabia have already stolen a march in diversifying and securing their supply chains in line with their economic ambitions, a good example being Saudi Arabia’s Manara Minerals’ $2.5bn investment in Vale Base Metals last year.

We can expect more joint ventures and informal partnerships to play a critical role in the upcoming UK minerals strategy. With that in mind, it is perhaps unsurprising to see the UK Government already forging closer ties – including a collaboration partnership signed with Saudi Arabia at the recent Future Minerals Forum in Riyadh.

The idea is to secure long-term supplies of critical minerals such as copper, lithium and nickel, which are used to make smartphones and electric cars, but are also vital to build data centres that help develop AI systems.

Critical minerals mining in the UK

Turning our gaze inward, the UK itself harbours significant potential for mining certain critical minerals including tin, nickel, tungsten and rare earth elements. Resources in regions such as Cornwall – where a new lithium mine is currently under development – offer the prospect of securing domestic supplies but also improving Britain’s hand at the global negotiating table.

However, expanding UK critical minerals production comes with a number of challenges. Britain’s planning system has long been a point of consternation, and increasing mining in some of the UK’s most picturesque locations will undoubtedly generate public concern.

Notably, the government has prioritised adapting planning laws in its first months in power. However, there must be a concerted effort to align the National Planning Policy Framework with mining initiatives as well as the upcoming Industrial Strategy to ensure that the benefits to the community and the nation are clearly articulated and realised.

Funding the future

Improving and diversifying the UK’s supply of critical minerals will rely heavily on its ability to fund its seat at the table – an issue that has been brought into sharp relief by recent increases to government borrowing costs.

Inward investment is imperative and, again, it is unsurprising to see this factor in the recently announced tie-up with Saudi Arabia. We can expect more inward investment to be sought if further deals of this nature are struck with international peers.

In another positive sign of progress, that inward investment will sit alongside the financing announced by the government’s export credit agency in October to support overseas projects that help British industries access new supplies.

While the UK does not have the same natural reserves – and therefore the spending power – as the likes of Saudi Arabia or Norway, the deployment of the UK’s own sovereign wealth fund should also be a factor for the strategy to consider. The UK’s Critical Minerals Intelligence Centre will provide a strong steer on the UK’s future strategy but it will be interesting to see how closely aligned it becomes with the National Wealth Fund (formerly the UK Infrastructure Bank).

All this said, it is clear that the government’s new critical mining strategy is both timely and essential. It must address the precarious nature of the current mineral supply chain, exacerbated by ongoing geopolitical tensions.

By considering new international partnerships, investing in domestic resources and facilitating funding, the UK can create a more resilient and secure supply chain for the critical minerals needed to drive the energy transition and breathe new life into growth industries. The success of this strategy will hinge on the UK’s ability to adapt, innovate and collaborate.

About the author: Stewart Worthy is a partner and corporate lawyer at transatlantic law firm Dorsey & Whitney. His practice focuses on complex cross-border transactions, including in the mining sector.