Lithium: Critical Minerals Supply
(1 week, 5 days ago)
Westminster HallRead Hansard Text Read Debate Ministerial Extracts
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Steve Double (St Austell and Newquay) (Con)
I beg to move,
That this House has considered the supply of lithium and other critical minerals.
It is a great pleasure to be able to lead this debate today, especially with you in the Chair, Sir Gary—I know you will enjoy me talking extensively about Cornwall once again. This debate is very important to me because this particular subject is relevant to my constituents in St Austell and Newquay, and indeed Cornwall as a whole. The main content of my remarks will be focused on lithium extraction and production because we have an opportunity in Cornwall to extract and provide substantial amounts of lithium in the coming years. I recognise that lithium is by no means the only critical mineral and that, beyond the application of lithium-ion batteries, there will be many other industries that are reliant on so many other kinds of critical minerals.
Critical minerals are defined as commodities other than fuel that are crucial to a state’s economy or national security, with a supply chain that is particularly vulnerable for a number of reasons, such as geopolitical tensions. Following a comprehensive assessment by the British Geological Survey, which evaluated minerals according to their economic vulnerability and supply risks, the UK Government now identify 18 minerals as critical. That list is kept under review and is not meant to be definitive, but it will be informed by the science as it evolves and new discoveries as well.
Those minerals are deemed critical because they underpin the supply chains of modern-day technologies that are critical to day-to-day life—from electronic communications, our smartphones and our watches to the automotive industry, particularly electric vehicles, as well as defence and cyber-security. They can also have critical applications in other fields, including the pharmaceutical industry. They are more relevant than ever before, particularly as we transition to a green economy, and the technologies that will help us to achieve that depend on those minerals. Lithium, graphite, cobalt and nickel are needed in large quantities to make electric vehicle batteries and they will form the future backbone of the global automotive industry, while wind turbines depend on permanent magnets built with rare earth elements and copper. Without a sustainable and secure supply of critical minerals for the coming decades, we will simply not be able to meet our net zero target, maintain our critical defence and security capabilities, or support the creation of thousands of highly skilled, highly paid jobs in the tech, defence and automotive industries.
It is therefore no surprise that the global demand for critical minerals has shot up in recent times. In particular, there are concerns about the supply of lithium, which is going to come under huge pressures globally in the race to create more lithium-ion-based products. Securing a reliable supply of lithium is going to be crucial to our future economic prosperity. High-grade deposits of lithium can currently be found in four countries around the world—Argentina, Australia, Chile and China—with those countries dominating the global market at present.
Looking a bit further up the supply chain, China hosts 60% of the world’s lithium refining capacity. A report published at the end of last year by the Foreign Affairs Committee found that China looks ready to exploit the economic advantages arising from its global dominance of the lithium refinery market, and there are concerns that the UK has not yet taken steps to embrace the opportunities provided by lithium and other critical minerals. With technological advances constantly shifting towards a reliance on more lithium-heavy batteries, lithium extraction will need to increase significantly across the world to meet that demand. Analysis has shown that by 2030, even with global supply ramping up significantly, there will still be a 55% gap between supply and demand, because of a sharp increase in the demand.
Other critical minerals used in the production of batteries also appear to be in short supply, but analysts agree that of all the minerals involved, the supply of lithium presents the greatest challenge. But there is good news. The UK has a significant deposit of this most critical of minerals in Cornwall. We have known about its presence since the 1850s; I have seen mining maps from the 1850s that point to the fact that lithium is present. There was even a small mine in my constituency just outside St Dennis that in world war two supplied small amounts of lithium for the war effort. With demand and prices now rising, these deposits have become viable for extraction.
The Government have recognised this issue. In July 2022, they published the UK’s first-ever critical minerals strategy, which was a key landmark in the recognition of the importance of securing a sustainable supply of these minerals. In March 2023, it was reviewed and renewed with the “Critical Minerals Refresh”. It was disappointing, however, that this latest policy paper made no mention of the significant increase in the supply of critical minerals needed to meet our net-zero targets and energy security requirements. I am concerned that there seems to be a silo mentality in some parts of Government, with different Departments looking at different aspects of what is needed to reach net zero and secure our future. We need a cross-Government, joined-up approach to link up our priorities. Critical minerals challenges and opportunities cannot be addressed in an isolated manner.
Some people have asked, “Well, why can’t we just rely on imports of these minerals?” As I have mentioned, China is looking to dominate and control supply, and concerns have been expressed about the ethical and environmental reputation of lithium extraction around the world. People are becoming more aware of the need to understand the supply chain of products they purchase and the standards of supply and production. There is little point in buying an electric vehicle if substantial environmental harm is caused in the supply chain process.
Lithium and cobalt have attracted the most international attention, with reports of the use of child labour in cobalt mines in the Democratic Republic of Congo and abuses of indigenous rights in lithium mining projects in South America making global headlines. This proves there is a good reason why the UK must shift its focus from getting its supply of critical minerals abroad to securing them domestically wherever possible. Having a domestic supply of critical minerals will mean that we can control the standards of supply, maintaining the highest environmental and ethical standards as well as reducing our carbon footprint by not having to important these materials. It will also keep value in the UK economy.
Reaching our net-zero target by 2050 presents a challenge and an opportunity. Clean growth has been at the heart of the UK Government’s plan to level up our industry and economy. This country aspires to be a world leader in electric vehicle and battery technologies, but that will only be achieved by growing our battery manufacturing. Importing will not be the answer. The more we can source the materials we need domestically, the more it will help us to achieve this goal. Doing so will mean that we can create green jobs of the future within the UK, attracting investment and growing our economy while reducing our carbon emissions.
Cornwall has produced virtually every battery metal in the past. It is imperative that we fully exploit the geological potential the duchy offers once again to lay a path to our transition to net zero. Cornwall powered the industrial revolution with copper and tin, and we are ready to power the green revolution and be at the heart of our nation’s prosperity once again. We are fortunate in Cornwall to have two excellent companies, both operating out of my constituency of St Austell and Newquay, developing lithium production in different ways: Cornish Lithium and Imerys British Lithium. Without going into the technical detail, they are both pioneering new methods of extracting and processing lithium from hard rock and brines beneath Cornwall. Both are working to ensure the highest environmental standards.
One of the questions I am most frequently asked is about how much local opposition there is to the lithium extraction, largely because of the industry’s reputation around the world. The answer is virtually none. That is, first, because mineral extraction is what we do in Cornwall; it is in our DNA. We have been continuously mining tin and copper for thousands of years and china clay for the past 280, and the vast majority of people locally are delighted to see the opportunity to revive our mining heritage for a new era. Secondly, the lithium is located in formerly mined land, so we are not digging up new countryside to extract lithium. Just as importantly, both Imerys British Lithium and Cornish Lithium are committed to working with local communities. They have both recently held public engagement sessions. At those events, they made clear their commitment to the highest standards and the lowest possible impact on the environment.
Between them, the Cornish Lithium and Imerys British Lithium projects expect to be able to supply 40,000 tonnes a year of the 80,000 tonnes that UK car manufacturers will need for batteries. That is half of the supply from a domestic source. That will put the UK at a competitive advantage, as well as being good news for the Cornish economy. Some people predict that lithium extraction could be like tin all over again for Cornwall.
It is not just lithium; we still have tin and copper deposits in Cornwall, where copper is potentially making a comeback, having been the focal point of our first mining revolution. High-grade qualities that are 16 times higher than the global average have been discovered during the underground exploration of lithium at the United Downs site, in the constituency of my right hon. Friend the Member for Camborne and Redruth (George Eustice). Also in his constituency is South Crofty mine, an ancient tin mine with records of mining in the area as early as the 16th century. Nowadays, the site presents the fourth-highest-grade tin resource in the world. It is under the ownership of Cornish Metals, which is working to ensure that Cornwall can begin supplying our growing demand for tin in the near future, and is expected to employ more than 200 people.
I was pleased to receive an update from the Minister that went out to all MPs in a “Dear colleague” letter last week, informing us of the establishment of the new Critical Imports Council and its first quarterly meeting, which the Minister chaired. That is welcome news. The council brings senior Government officials together with stakeholders from industry and academia to discuss the challenges and opportunities presented by the global supply chain landscape. In an ever more uncertain and rapidly evolving world economy, it is vital we work closely with strategic and academic partners to help the UK adapt and respond to risks and opportunities. I was pleased to learn that key sectors, including manufacturing, technology, health and life sciences industries were represented at the meeting. From medicines to smart watches, critical minerals are needed now more than ever, so it is welcome that the Critical Minerals Association, which provides the secretariat to the all-party parliamentary group for critical minerals, and the Institute for Minerals, Materials and Mining are both members of the council.
I look forward to receiving further updates on the council’s work in the light of the discussions we will have on lithium and other critical minerals today. I hope the Minister will pay close attention to the work of businesses such as Imerys British Lithium and Cornish Lithium in my mid-Cornwall constituency. Indeed, I invite him to come to Cornwall to see for himself to see the fantastic opportunities that lie underneath our rocks.
I have engaged with both businesses over a number of years and they have a few requests of Government to help and support them as they develop to provide the lithium we will need. The first is on regulation, which needs to be more coherent and understandable. There is too much of a patchwork of regulations at present, which is making it hard for the industry to navigate. Between getting permits and planning, there are plenty of bureaucratic hoops that they have to jump through. It is not beyond the realms of imagination to have a body like the Coal Authority for lithium and other critical minerals, to help harmonise and make regulations clearer. The future for lithium, with the right regulation, is extremely bright and offers an opportunity for the UK economy.
Secondly, a range of standards on carbon intensity and ethical traceability of supply chains is coming down the track. The UK needs to prepare itself to take advantage of the opportunities that presents. Lithium from Cornwall presents a huge opportunity to meet those standards. It is in our interests to support responsible, transparent and traceable supply chains. We should consider developing a required traceability standard for all lithium used in UK manufacturing. We should also consider including lithium extraction within the carbon border adjustment mechanism, which is currently being consulted on.
Post Brexit, we now have our own system of chemical classification distinct from EU regulations, which allows us to review whether those classifications are right in the light of the best and most up-to-date scientific research. Crucially, it also allows us to take a stand against proposals that are not supported by the available science, such as the European Chemicals Agency’s proposal to classify lithium carbonate, lithium hydroxide and lithium chloride as category 1A reproductive toxicants in 2021.
Although that might be justified for some other toxic substances, for lithium it is simply not backed up by the evidence. It is, therefore, welcome news that the Health and Safety Executive published its own opinion in August 2023, outlining concerns with the evidence and methods used by its European counterpart. It triggered a full assessment and called for further evidence. It is important we examine all the evidence, but the process could take several years, and no end date is currently in sight. That could leave a highly capital intensive and critical industry facing regulatory uncertainty. This could be a key Brexit benefit, and I ask the Minister to give an update on what is being done to accelerate this process to a conclusion as soon as possible.
In summary, we hear a great deal about the need to strengthen our military defence, and rightly so in an increasingly uncertain and hostile world, but in my opinion not enough is said and not enough attention is given to strengthening our supply of critical minerals. We face a risk of a global supply chain of minerals such as lithium being controlled by states that are not our friends and allies. I urge the Government to do more in this field. Cornwall stands ready to step up and play a significant role in providing the secure, clean and ethical supply of some of the critical minerals we are going to rely on the most in the decades to come.
Jim Shannon (Strangford) (DUP)
It is a pleasure to serve under your chairship, Sir Gary. I thank the hon. Member for St Austell and Newquay (Steve Double) for leading today’s debate. His speech was a tour de force, setting the scene so well. The opportunities in his constituency are apparent and achievable, and I support him. Northern Ireland may not have the access to lithium that the hon. Gentleman mentioned, but we want to be part of this advanced technological progress. That is the thrust of where I am coming from.
It is great to be here because there is no doubt that in the not so distant future we will be having more conversations about the sustainability of and demand for lithium to meet our commitments to net zero targets. We are here to have an in-depth discussion on how we can plan for that.
In December 2023 a major milestone was reached: to deliver a domestic supply of lithium in the UK with home-grown technology and engineering. We have a very clear role to play in the world and a clear role to play for ourselves in this great United Kingdom of Great Britain and Northern Ireland. We can all contribute to and gain advantages from what is being brought forward. Three companies from the north of England signed an agreement aimed at delivering the UK’s first commercial-scale direct lithium extraction plant that combines UK-developed technology, UK-sourced lithium-bearing saline brine and UK process engineering expertise. Those are things that we can do and I am pleased that the Minister and his Department are doing just that.
It is always important to me that Northern Ireland can play a role in modernising technology. It may not be possible for Northern Ireland to have the extraction process to which the hon. Member for St Austell and Newquay has referred but, none the less, I think we can play our role. There is currently no supply of lithium in Northern Ireland and, to date, sectors relating to net zero, such as energy and transport, have represented a small proportion of total mineral demand. But it has been projected that the transition to net zero will result in a significant increase in demand in the future. If that is where we are going, and that is the target we are aiming for, I would like to see my constituents, and people from across all constituencies of Northern Ireland, being part of that. There is also a role for Scotland, though it seems that there may not be the same possibilities in Wales, unfortunately.
Some smaller businesses specialise in lithium batteries. For example, in my neighbouring constituency of North Down, a company called Lithium Go specialises in providing stable battery power to the golf trolley industry. I believe there is scope for Northern Ireland to contribute on a wider scale. What discussions has the Minister had with the Department for the Economy to see how we can advance the technology and the opportunity to businesses in Northern Ireland? We have the skilled workforce, we have the opportunities, we have the interest and I believe that we can do our part in Northern Ireland.
While I understand that mineral planning policy is a devolved matter, areas of potential geological prospectivity for critical minerals in Northern Ireland, Scotland and Wales must be recognised by the UK Government centrally. In an answer to a parliamentary question, the Minister stated that two areas of geological prospectivity for lithium had been identified in Scotland and no areas in Wales. When the SNP shadow Minister, the hon. Member for Gordon (Richard Thomson), speaks, he will no doubt mention that. That shows that Scotland has a head start, in conjunction with the opportunities in England on the mainland. Northern Ireland was not mentioned, so could the Minister provide clarity on what discussions he has held with his relevant counterparts in Northern Ireland on their role in the supply of lithium and other minerals?
We all in this House, in all political parties and on both sides of the Chamber, have a commitment to making the world a better place. That is a goal that all of us try to achieve, and sustainability is part of that. Yet we must all ensure that these are not unachievable goals, but that they have a solid foundation and practicality. We must sort out how we can supply lithium safely and in an environmentally friendly way. That has to be a priority for us all.
I often say—and I say it with great honesty and truthfulness—that I want this great United Kingdom of Great Britain and Northern Ireland to succeed, to prosper, to do well. I believe one of the great advantages we have is being able to do that together. My request to the Minister, and to others who will speak, is to ensure that we can all gain. In Northern Ireland, we deserve the same opportunity. We can contribute greatly to this debate and what we are trying to achieve.
Cherilyn Mackrory (Truro and Falmouth) (Con)
It is a pleasure to follow the hon. Member for Strangford (Jim Shannon). I thank my constituency neighbour, my hon. Friend the Member for St Austell and Newquay (Steve Double), for securing this really important debate. As his successor as chair of the all-party group for critical minerals, it has been my privilege to champion this industry in Parliament in recent years. I am told that the phrase “critical minerals” has been used more in Hansard in the past couple of years than in the whole of Parliament’s history. That shows that critical minerals are firmly on the agenda and that everybody is starting to talk about them.
My hon. Friend knows that every opportunity to discuss lithium and other critical minerals is a chance to raise the profile of this vital sector and outline its importance to our energy security as a nation and a global economy. It should also give our constituents in Cornwall a sense of pride. The sector is absolutely essential, given that demand for critical minerals is due to quadruple by 2040 to meet the requirements for clean energy technologies on our way towards net zero.
As my hon. Friend outlined, mining has always been closely interwoven with Cornish communities. It has been fantastic to witness the revival of Cornwall’s mining industries, which has restored Cornwall to its rightful place at the heart of the UK’s critical minerals strategy. He spoke at length about how Cornish Lithium and Imerys British Lithium are going from strength to strength. I associate myself with his comments, and I thank the companies for their endeavours.
In addition to lithium, Cornwall is also extracting tin. I had yet another opportunity to visit Cornish Metals at South Crofty in the constituency of my right hon. Friend the Member for Camborne and Redruth (George Eustice). I took great pleasure in showing the then Minister for Industry and Economic Security—my hon. Friend the Member for Wealden (Ms Ghani), who has now picked up a brief in the Foreign, Commonwealth and Development Office—around the site. We met the company directors, who took her underground to update her on the progress that Cornish Metals has been making to restore that historic mine.
Cornwall is home to one of the top three tin sites in the world, and it is expected that South Crofty will be back online in 2026. I want to highlight a couple of the challenges facing our new and re-emerging mining companies that were raised when I visited South Crofty. The first relates to planning. South Crofty is on an existing site and, as my hon. Friend the Member for St Austell and Newquay said, although we had local buy-in, the planning process took about 12 years and cost more than £10 million; that is now completed. Given that Cornwall is an area sympathetic to mining infrastructure, surely we can simplify the process if we mean what we say about the minerals being critical.
The second challenge is the processing. My hon. Friend has spoken about lithium processing, but currently any tin extracted from Cornwall will need to be exported to the far east to be processed. In Europe, the energy costs are simply too high, and we must use carbon to melt the metal. The sites in Belgium and Poland are used only to recycle, so should we stand up our own processing in the UK, perhaps in south Wales or Humberside, next door to our existing steelworks?
Despite that, mining is not the dirty industry it once was. As champions of the industry, we have a duty to remind communities of the environmental benefits that a restoration of Cornwall’s mining industry will bring to our natural surroundings, our towns and our villages. It is not simply about high-skilled jobs for the future and opportunities for work. The Cornwall Lithium site at United Downs is producing geothermal energy, which is ready to power local houses and businesses. The water treatment plant at South Crofty is providing resources for the reopening of the mine that can also be used to clean the nearby Red River—no longer as red as it was—and protect local wildlife. That is a great example of the fact that when the Government give industry the breathing space to start in an emerging sector, the benefits to the economy, security and the environment are bountiful.
It is important that we place our discussions about the supply of critical minerals in a broader international context. I have worked closely with the Critical Minerals Association and its partners to get world leaders in the industry, and representatives of international bodies and Governments across the word, in the same room to have conversations and build the relationships that are needed now if we are ever to be in a position to grow the supply chain at pace to meet the growing global demand.
Last November, I hosted the first ever roundtable of producer nations, right here in Parliament. We brought together Ministers from Kyrgyzstan, Saudi Arabia, South Sudan, Nigeria and Armenia for a discussion with Foreign Office Ministers about the future of our respective critical mineral supply chains. The event complemented the UK’s Extractive Industries Transparency Initiative roundtable, which I had hosted earlier in the year, where we discussed the corporate risk and the need to set out international expectations for the industry early on, to ensure transparency and ethical mining in the rush to meet demand.
I also attended another roundtable at the US ambassador’s residence. If I am totally honest, I was quite surprised to be invited, because it included representatives from the US Government as well as global industry CEOs. We were able to brainstorm on the cross-governmental challenges that like-minded nations face, in order to build resilience in the supply chain and meet global demand, thereby ensuring not just security but sustainability.
Graham Stringer (Blackley and Broughton) (Lab)
The hon. Lady has made two significant points in a coherent speech. First, we will not be able to make use of natural resources in this country while our energy costs remain so high, and secondly, the planning regime that we operate in makes getting permission for the extraction of any minerals very difficult. Does she agree that deep in the Government, as the hon. Member for St Austell and Newquay (Steve Double) said, there is still a belief that we can rely on international trade to import critical minerals, whereas in actual fact China is behaving malevolently and trying to monopolise the trade?
Cherilyn Mackrory
The hon. Gentleman is not wrong, in that global events are catching up with us. I think everybody in this Chamber knows that Whitehall moves at a glacial pace at the best of times, and current geopolitics has taught us that the Government need to be more agile. I think they are getting better at that and at getting Government Departments to work together. I mentioned that the Minister’s predecessor now has the equivalent brief in the Foreign Office and will therefore take her understanding with her. Government Departments are getting better at working together, but the hon. Gentleman made an incredibly important point.
Throughout all the events we have hosted this year I have been reassured by the Government’s determination and willingness to pitch in. The critical minerals strategy grapples with many of the industry’s original concerns, yet I also think most of us see it as an evolving document, as both our ambitions for the sector and the realities on the ground shift. What is true is that the strategy will ensure that the UK remains competitive as different nations grow their supply chains at varying rates, and it will also ensure that regions such as Cornwall, which have so much to offer, get the sustainable investment and job opportunities that we need.
Before I draw my speech to a close, I will discuss the local impact of improving the supply of critical minerals to my constituents in Truro and Falmouth, outlining the successes of the activity by the Government and the all-party parliamentary group on critical minerals on the international stage, as well as the reassuring framework offered by the critical minerals strategy. I will also use this opportunity to mention alternative ways of boosting the supply of lithium, tin and other minerals through recycling.
The world-renowned Camborne School of Mines is now based at the University of Exeter in Penryn. It is highly respected around the world and I have met many of its graduates during my time as chair of the APPG. In February 2023, an additional £15 million was invested into research on strengthening the resilience of our critical minerals supply chain by recovering rare earth metals from products that had already been used. This work has huge potential. For example, it is estimated that by 2040 some 10% of copper, nickel, lithium and cobalt could be generated by recycling used batteries. When we are in a position of urgency, it makes perfect sense for us to maximise the minerals we have in products with limited lifespans, in order to alleviate the pressure on our mining industries and shore up our national security in the process.
Earlier this year, the Minister responsible for resources, my hon. Friend the Member for Keighley (Robbie Moore), announced that the University of Exeter, where the Camborne School of Mines is now based, would be a partner in the new United Nations-backed centre that will propel the transition to a future circular economy. The International Centre of Excellence on Sustainable Resource Management in the Circular Economy is the first such centre in the world. It will develop new approaches to the circular economy in areas such as metals, construction and critical minerals. I thank Ministers for taking the initiative on this front and putting investment into research early on, and I pay tribute to Professor Frances Wall at the Camborne School of Mines for leading the work.
Across the board, we have had big wins for the critical minerals industry in the UK, particularly in Cornwall. Our future security and economic growth rely on getting the next phase of increasing supply chain capability right for international demand, with balance to benefit our mining communities. However, it is quite easy for attention to shift to the next domestic policy interest of the moment, which is why I will continue to use every possible forum in this place to raise the topic. I am incredibly grateful to my constituency neighbour, my hon. Friend the Member for St Austell and Newquay, for giving me the opportunity to do so today.
Sir Gary Streeter (in the Chair)
We now come to the speeches from the Front-Bench spokespeople. I call Mr Richard Thomson.
Richard Thomson (Gordon) (SNP)
It is a pleasure to serve under your chairship this afternoon, Sir Gary. I add my congratulations to the hon. Member for St Austell and Newquay (Steve Double) on securing a debate on this important topic.
Although the concentration on lithium is entirely understandable, given the significance not just to Cornwall but to the broader economy of having a secure supply, critical raw materials go much wider. The minerals are economically important because they are needed to make batteries and semiconductors, which are vital for the transition to clean energy, as we have heard, but they are also at the greatest risk of supply chain disruption. The UK has 18 metals and minerals on its CRM list, and another six minerals are classed as having an elevated criticality because of where they come from. As is sometimes said in relation to the economy, if we cannot grow it, we have to mine it. That is very much where we are.
I offer some assurances to the hon. Member for Strangford (Jim Shannon), who felt that Northern Ireland was somewhat left behind in this policy area. The British Geological Survey has compiled a report on where many of the critical minerals can be found, and there appear to be significant deposits of very many spread across the counties of Fermanagh and Tyrone, so Northern Ireland can potentially play a role in meeting the demand for them.
Apart from Cornwall, about which we have heard, west Wales, Cumbria and the highlands of Scotland, as well as my own patch of Aberdeenshire, are also thought to be home to significant deposits. I can certainly testify to the interest in the issue: in September 2022, a helicopter that was seeking to detect critical minerals in Aberdeenshire managed to hit a pylon and black out 1,000 of my constituents’ electricity supplies for some time. That had some ramifications, but it brought it home to people that something out there was worth looking for, even if we hope that more care is taken in future.
Outside the UK, the 18 critical minerals are concentrated in particular geographical areas. For example, Brazil produces 98% of the global niobium reserve, the majority of cobalt comes from the Democratic Republic of the Congo, and Russia has significant deposits of palladium. For the vast majority of critical minerals, many of the countries in which they are concentrated are autocratic, many are non-aligned, which is a matter for them, and with many we do not enjoy the best of diplomatic relations. Ensuring continuity of supply is therefore in many respects as much a geopolitical issue as a geological one.
The world in 2040 is expected to need four times as many critical minerals as are being used today. The demand for lithium, particularly, is expected to surge by about 90% over the next two decades. Demand for nickel and cobalt is expected to rise by between 60% and 70%, and demand for copper and rare earth metals is expected to increase by 40%. To take one example that is most closely associated with the increased demand for CRMs, electric vehicles use 10 times more of those materials than conventional cars. Reaching net zero transport emissions by 2050 would require the sixfold increase of critical mineral extraction over the next 15 years.
It is estimated that stripping the earth’s natural resources in this way is causing about 60% of global heating impact, including land-use change, 40% of air pollution impact, and more than 90% of global water stress and land-related biodiversity loss. It is important that we go about extraction, whether domestically or internationally, with care. There are some important principles to keep in mind. We cannot afford for our approach to achieving domestic resilience and net zero to come at a similar or greater environmental cost than that which we are hoping to forestall. That is why we must ensure that the extraction of CRMs is done as sustainably as possible, wherever they happen to be extracted. That means transforming the extractive industries to minimise the social and environmental impact, which has to be part of the solution to moving towards net zero. A failure to do that will simply lead to stranded assets, perpetuating existing vulnerabilities and inequalities around the world. It will jeopardise the fight against climate change and threaten human wellbeing, ecosystems and economies for decades, if not centuries.
Successive UK Governments have perhaps to a certain extent sleepwalked to the position we are in now, which leaves the economy vulnerable to the sensitivities in supply. That was recognised in last December’s report by the Foreign Affairs Committee, which found that successive UK Governments had
“failed to recognise the importance of critical minerals”
in their strategies, and had
“failed to respond…to the aggressive capture of large parts”
of the global market over the last three decades—particularly by China—which has allowed a single country to dominate the UK’s critical minerals supply, leaving us with the consequent vulnerabilities in terms of economic resilience and security. China is the dominant player in the market—we should not ignore or be blind to that. Nor should we be blind to the fact that the Chinese state has not been slow to use that dominance against other states that it has found itself in dispute with.
What is to be done? Domestic CRM is largely unproven as yet. It could in many cases be years away from happening, even with a fair political wind and a benign planning approach. The USA and others are acting in this space. The USA is beginning to re-shore supply chains through the Inflation Reduction Act, and in 2020 the EU published its own action plan on critical raw materials, which is influencing its policy responses.
As well as extraction we need to look at how we can create a genuinely circular economy that can repurpose materials that have already been extracted. For example, the Scottish Government want to ban the sale and supply of single-use vapes in Scotland from April 2025. A single-use vape contains plastic, copper, cobalt and a lithium battery. The total amount of single-use vapes purchased every year contains enough lithium to provide the batteries for 5,000 electric vehicles. We should not allow the fact that they are very small products to disguise the adverse impact they can have not only on the environment after they are disposed of, but in terms of how their ingredients could be put to better use and secondary and tertiary use in future.
In conclusion, the UK has to urgently address dependency on China for its critical minerals. It must make itself more resilient to disruption in the CRM supply to avoid a situation in which the Government find themselves exposed economically or in terms of security. The UK needs to play catch-up with what our American and European partners have done to minimise their own exposure. We also need to work relentlessly to create circularity in our economy to make sure that the critical materials that we have already do not end up in landfill or not being used, so that they can be repurposed to minimise exposure and preserve the planet’s resources. There is only one planet. We need to do all we can to protect it and make the best use of its resources.
Sarah Jones (Croydon Central) (Lab)
It is a pleasure to serve under your chairmanship, Sir Gary, and a pleasure to follow all the contributors to what has been a thoughtful debate. I am grateful to the hon. Member for St Austell and Newquay (Steve Double) for securing the debate. I completely understand why he wanted to do so, and think I agree with everything he said in his speech. Although we have made some small progress, I agree that there is a silo mentality and it is disappointing that the Government are not as joined up as they should be on these issues. I also agree with the hon. Gentleman’s points about the need for more focus on the midstream. I have heard that several times from people I have engaged with while I have been in this role.
The hon. Member for Strangford (Jim Shannon) highlighted the potential role, as we learned, of Northern Ireland. When I was in Northern Ireland a couple of weeks ago, I met representatives of the chamber of commerce and visited businesses including Harland & Wolff, and their ambitions were very high. It was reassuring and encouraging to hear that everybody is pushing forward now that the Assembly is back up and running; it feels as though real progress is being made.
I listened with interest to the hon. Member for Truro and Falmouth (Cherilyn Mackrory) about her role on the all-party parliamentary group for critical minerals. I have met the Critical Minerals Association and others and I understand what she is saying. I agree that mining is not always the dirty industry that it once was, but in some places, it is. Our role is to try to make sure that it is not a dirty industry and that, where we do it and where we supply and rely on others, it is being done properly. I agree that the Government need to be more agile in responding to some of the challenges that we face. The role of the extractive industries and how that works is an important part of the debate, as the hon. Member for Gordon (Richard Thomson) said.
I will add to some of the key arguments that have been made. If people are not familiar with the term “critical minerals”, it has an air of mystery about it, but there is nothing clandestine about the importance of critical minerals and how key they are to our modern society. I welcome the Minister to his new role. If he has not already read “Material World” by Ed Conway, I encourage him to do so, because it brings to life how important critical minerals are for us all.
The first thing that many of us do when we wake up in the morning is check our phone, which is powered by a lithium battery. We might spend the day working on a laptop; its chip is laced with tin. In the coming years, we will get more and more of our electricity from turbines that are powered as much by metals like cobalt as by the wind that turns their blades. If the Minister has not already been to the UK Battery Industrialisation Centre, I encourage him to go, so he can see how important critical minerals are in the production of batteries, which will be important for electric vehicle manufacturing in this country.
As has been said, the move to net zero is key. The International Energy Agency has predicted that demand for critical minerals could more than double by 2030. There are different figures—the hon. Member for Truro and Falmouth said that it would quadruple—but we know that the need for critical minerals will increase significantly. It is therefore vital that we secure the supply of lithium and other critical minerals to this country.
Labour is clear that the green transition is our biggest economic opportunity. It is our chance to bring economic growth back to this country—the driving mission of a future Labour Government—along with hundreds of thousands of jobs everywhere, from Cornwall to Carlisle. As the shadow Chancellor has set out, we are living in an age of insecurity. The vulnerabilities exposed by the pandemic, by rising geopolitical tensions, which have been mentioned, and by the changing climate have made it clear that a joined-up approach to the economy is vital for our nation’s security.
Many of the 18 minerals that the UK defines as “critical” are concentrated in specific geographic areas, the majority of which, as has been said, are not dependable allies of the UK. China is the biggest producer of 12 of the 18 minerals. That makes it clear that strategic, co-ordinated and effective steps to secure our supply of those minerals are vital. Critical action is needed, on which we believe that the Government have critically underdelivered.
Other countries are racing ahead, but the Conservatives still refuse on ideological grounds to have an industrial strategy, which leaves our approach to critical minerals disjointed and scattergun. Instead of showing decisive leadership, we risk seeing the UK sidelined in the global race for the industries of the future. The EU Critical Raw Materials Act has introduced benchmarks for domestic capabilities along critical mineral supply chains. The US Inflation Reduction Act, which has accelerated the race for critical mineral production there, is a powerful intervention that the Chancellor dismissed as a “distortive …subsidy race”.
We welcomed the Government’s critical minerals strategy when it was finally published, but some parts of their approach were frankly baffling. For example, why did they choose not to assess the vulnerabilities of the UK’s industrial supply chains while drawing it up? Why did the strategy contain no specific targets for priority sectors? Why was there no plan to expand midstream capacity for processing and refining in the UK, including in the critical minerals refresh published last year? As the Critical Minerals Association said, without developing the UK midstream, there is a risk that the UK Government will not be recognised as integral to global critical mineral supply chains.
The strategy should have been a vital document, but as others have mentioned, the Foreign Affairs Committee concluded in a report that it is simply too broad to have real impact. That failure is deeply concerning, and it means that crucial investors in the critical minerals supply chain will look elsewhere. They will look to Europe, to countries such as Germany who are expected to have the largest battery manufacturing capacity on the continent by 2030. In comparison, the UK still has just one gigafactory that is actually operational.
The Government’s ad hoc approach has failed; the Conservatives have left Britain vulnerable, and Labour will take a new approach. Where this Government have proved themselves ideologically allergic to joined-up thinking, Labour knows that a real industrial strategy is the only adequate response to our age of insecurity. Building a resilient economy will be a core principle of our approach, which is why our industrial strategy provides for a new supply chains taskforce to analyse the potential supply chain needs across critical sectors, to review the vulnerability of critical supply chains to extreme risks and to assess the potential requirements of responding to those shocks.
That industrial strategy will work hand in glove with Labour’s green prosperity plan, built on the principle of using catalytic public investment to secure investment from the private sector—a principle that the hon. Member for St Austell and Newquay may be able to attest to the power of. Labour will make strategic public investments to develop and support critical supply chains here in Britain. Our national wealth fund will invest £1.5 billion in new gigafactories and aim to draw in three times as much from the private sector. Boosting Britain’s automotive industry at the one end and the critical minerals supply chain at the other, the new gigafactories will help to put Britain back on a competitive international footing and to secure Britain’s place in the international supply of those key materials.
When it comes to critical minerals, it is vital to look way beyond our borders, which is why a Labour Government would ensure that our trade policy works in step with our domestic plans. That is why we need to work with our friends and allies on secure and resilient supply chains, aligning capacities in key sectors with our wider security relationships. I was at a roundtable recently with the Critical Minerals Association and many others, including representatives from Australia and Canada, and we were talking about how the Foreign Office works in terms of its relationships and priorities. It is clear that the need for critical minerals needs to be stamped on what is done by the Foreign Office, as well as by other Departments. We need to make sure that we are building relationships with our allies from whom we will need to source materials in the future. We should also use our international position to boost standards, which, when it comes to critical minerals, have too often been sorely lacking.
Securing the supply of new critical minerals is crucial, but it is also vital to consider how we make the most of the materials that already surround us. I did not know that there is an estimated average of 20 unused electronic items in every household across the UK. We have to not make a mockery of recycling, as our Prime Minister has, but see it in its rightful place in helping to secure the circular economy, with buy-in from devolved Administrations across the UK. That is a real priority in moving towards a sustainable future.
Getting this right is vital, so I hope that the Minister can answer a few questions before the end of the debate. What is the Government’s plan to support the development of midstream critical mineral capacity in the UK? How do the Government plan to support the move to a circular economy to reduce our demand for new minerals? How is his Department working with the Foreign Office to engage with our allies so that we can secure our critical mineral supply and boost international standards? In the Government’s response to the task and finish group, they said that they would consider new supportive proposals. Have the Government done that yet? Securing our supply of lithium and other critical minerals needs leadership—leadership that the Government have so far failed to deliver. We risk letting the UK fall behind in securing our supply of critical minerals. Labour will put the UK back in the race.
The Parliamentary Under-Secretary of State for Business and Trade (Alan Mak)
It is a pleasure to serve under your chairmanship, Sir Gary. I congratulate my hon. Friend the Member for St Austell and Newquay (Steve Double) on securing this debate. He is a long-standing advocate for his home county of Cornwall and for the UK’s minerals industry. He has spoken powerfully about the importance of critical minerals to our economy and the role that Imerys, British Lithium and Cornish Lithium play in his community. He told us that he established the all-party parliamentary group for critical minerals. He is too modest to say this, but he is the driving force behind all those Hansard mentions of critical minerals, and I congratulate him on that. He speaks with great authority on the subject and I am grateful to him for giving us the opportunity to discuss it today.
I thank the hon. Member for Strangford (Jim Shannon), my hon. Friend the Member for Truro and Falmouth (Cherilyn Mackrory) and the hon. Member for Gordon (Richard Thomson) for their contributions to this debate, and I thank the Opposition spokesperson, the hon. Member for Croydon Central (Sarah Jones), for her kind words of welcome as I take up this post. I also wish to recognise the work of my predecessor in this role, my hon. Friend the Member for Wealden (Ms Ghani). As we have heard, she worked extensively on this issue, and I know that she will continue to support it in her new role in the Foreign, Commonwealth and Development Office.
My predecessor recently visited three key mining projects in Cornwall, including two lithium mines in the constituency of my hon. Friend the Member for St Austell and Newquay. Since I started this role four weeks ago, I have spoken to several UK mining companies, including Cornish Lithium and Johnson Matthey, with Pensana to come. I look forward to seeing for myself more growth-spurring, job-creating projects in the future, and I look forward to visiting Cornwall as soon as I can.
As my hon. Friend rightly notes, we are moving to a world powered by critical minerals. As we heard, we need lithium, cobalt, nickel and graphite to make batteries for electric cars; silicon and tin for our electronics; and rare earth elements for electric cars and wind turbines. These critical minerals are characterised by having the highest levels of economic importance and the highest levels of supply risk. We know that they will become even more important over time as we seek to bolster our energy security and domestic industrial resilience, while pursuing cleaner, green forms of energy production. As my hon. Friend the Member for Truro and Falmouth indicated, the world in 2040 is expected to need four times as many critical minerals for clean energy technologies as it did in 2020. However, we know that critical mineral supply chains are complex and vulnerable to disruption.
Traditionally, production is highly concentrated in certain countries. For example, China refines close to three quarters of the world’s lithium carbonate for batteries and around 90% of the world’s rare earth metals. State intervention in these markets is high. Supply chains are often fraught with environmental, social and governance issues and the market does not fully differentiate products on their ESG credentials.
All these issues present challenges to the UK’s security of supply, because UK industries and jobs, our energy infrastructure and our defence capabilities all rely on minerals that are vulnerable to market shocks, geopolitical events and logistical disruptions, at a time when global demand for these minerals is rising faster than ever. The Government’s view is that it is imperative for us to make our supply chains more resilient and more diverse. We need to support British industry now and in the future. That work is inextricably linked to both our energy security and our national security. For all these reasons, this Government have acted decisively to ensure that we have resilient domestic supply chains that give our businesses the long-term certainty they need.
As my hon. Friend said today, back in July 2022, we published our first ever critical minerals strategy, setting out our approach to improving the resilience of critical mineral supply chains. Above anything, it is a strategy that recognises that critical minerals are a multifaceted issue. It provides an overarching framework for accelerating our domestic capabilities, promotes closer collaboration with international partners and seeks to enhance international markets.
We always said that we would need to monitor global events and recalibrate our approach as necessary. That is one of the reasons we published the critical minerals refresh in March last year, reflecting the changing global landscape, highlighting progress to date and setting out our approach to delivering the strategy for UK businesses. Working closely with industry, we are already making good progress with the strategy, which I will say more about later, but we recognise that there is more to do.
I reassure my hon. Friend and all Members that we take a comprehensive and strategic cross-Government approach to critical minerals. While the Department for Business and Trade leads on critical minerals strategy, the delivery and evolution of the strategy and many of the policy levers lie outside my Department, and therefore we co-operate with Departments across Whitehall. I also reassure him that officials from my Department engage closely and regularly with officials in the Department for Energy Security and Net Zero where necessary.
It is also important to note that we support UK industries, especially those that depend on a steady flow of critical minerals, to seek resilience and diversity in their own supply chains. That is why last year we launched the independent task and finish group on industry resilience for critical minerals—a first-of-its-kind initiative for industry-Government engagement on critical minerals supply risks. The task and finish group has raised the importance of critical minerals with key industrial sectors, helping them to manage the risks in their supply chains. It has also given us insights about the UK’s dependencies and vulnerabilities, and published a report containing a series of recommendations on how to best guide the delivery of our strategy. The Government warmly welcome the group’s report and our full response to those recommendations was published last month. I encourage Members to read that report if they have not already.
As my hon. Friend the Member for St Austell and Newquay will be aware, the Government launched the Critical Minerals Intelligence Centre in 2022, in partnership with the British Geological Survey, to monitor risks in supply chains and assess just how critical different minerals will be over time. Their first assessment identified 18 critical minerals, including lithium, rare earths, tungsten and tin, and an update is due by the end of this year.
These are vital efforts but we know that our work is not yet done. That is why we continue to work with industries across the board to support resilience and diversification in their supply chains. We re-emphasised that commitment in our critical imports and supply chains strategy, published by my Department at the beginning of this year. As my hon. Friend mentioned, the Critical Imports Council is a key part of that work. I was proud to chair its inaugural meeting earlier this month and I welcome that the Critical Minerals Association and the Institute of Materials, Minerals and Mining are key parts of it. I look forward to working with them, as I know my hon. Friend does.
Here at home, we are supporting UK critical minerals producers to take advantage of the opportunities right along the value chain, including in Cornwall. While we will always rely on international supply chains, we have to maximise what the UK can produce domestically; my hon. Friend made the case for that powerfully. We need to make sure this is done where it is viable for businesses, and where it works for communities and our natural environment, as my hon. Friend the Member for Truro and Falmouth rightly mentioned. I agree with her that the UK is perfectly placed to lead on midstream processing, including refining and materials manufacturing, building on its globally competitive chemicals and metals sector.
My hon. Friend the Member for St Austell and Newquay is absolutely right that we have the capabilities to mine or refine enough lithium in the UK to satisfy more than our demands by 2030, but that is not true of all critical minerals. We have more than 50 projects at various stages of development to mine, process and recycle critical minerals domestically, and we want every one of those to be set up for success. That is why, to accelerate the growth of our domestic capabilities, the Government are investing big in critical minerals programmes. Our automated transformation fund, for example, is supporting projects in automotive supply chains, such as British Lithium, Green Lithium and Pensana. Meanwhile, as my hon. Friend will know, the UK Infrastructure Bank has invested over £24 million in Cornish Lithium. I was pleased to meet both the chief executive and the chief financial officer of that company in my second week in this role, which I hope underlines the importance of that company and his county to me and the strategy. They are part of a growing ecosystem, which includes gigafactory footprints that are getting bigger by the week.
At the same time, the Government are taking decisive steps to reduce the price of energy, as my hon. Friend the Member for Truro and Falmouth mentioned, to ensure competitiveness with other major economies across Europe, including through the British industry supercharger, which she will know comprises a series of targeted measures to bring energy costs for key industries into line with our major competitors.
As my hon. Friend the Member for St Austell and Newquay knows, the UK is also a pioneer in recovering critical minerals from waste, and we are ensuring that we stay ahead of the pack through Innovate UK’s circular critical materials supply chains programme to build and develop resilient supply chains. We are also exploring regulatory mechanisms to promote battery, waste-electricals and equipment recycling, which is an opportunity for this country.
The Government have a clear vision for the role the UK can play in critical minerals supply chains and we are throwing our full support behind business to harness and grow our competitive advantage, but we know that Britain cannot go it alone on critical minerals. International collaboration is key to building more resilient, diversified and responsible supply chains both here and around the world. The UK therefore has a role to play as an international deal maker, leveraging our extensive multilateral engagement and our strong relationships with mineral-rich producer countries and consumer markets.
Jim Shannon
In my contribution, I asked what could be done to increase technological advances in Northern Ireland, so that we can be a part of the great progress as we move forward. The hon. Member for Gordon (Richard Thomson), the spokesperson for the SNP, referred to some lithium deposits in Fermanagh and Tyrone, so there are possibilities—although that was not originally known, so I am very interested to find out about that. Will the Minister have discussions with the Department of Enterprise, Trade and Investment in Northern Ireland to ensure that we can be part of this great vision for the future of the United Kingdom?
Alan Mak
I thank the hon. Gentleman for his intervention. I will come shortly to the possibilities for Northern Ireland, and I will certainly cover the point that he makes. As ever, he is a great champion for Strangford and for Northern Ireland’s place in the United Kingdom, and I very much welcome his contribution to this debate on the topic of how we can co-operate, both among the home nations of the United Kingdom and with our international partners.
I want to reassure the hon. Gentleman that we are making real progress when it comes to co-operation with our international partners. For example, we have agreed bilateral partnerships on critical minerals with Australia, Canada, South Africa, Saudi Arabia, Kazakhstan, Zambia and Japan, with more to follow. The UK has also been represented at major multilateral forums, including the Minerals Security Partnership, which I attended in my second week in this role, and we are involved in the International Energy Agency, the G7 and other such forums. All this work means that we are collaborating closely with our partners to improve the resilience and security of the critical minerals supply chain.
My hon. Friend the Member for St Austell and Newquay asked about the EU dimension, and I want to reassure him that the opinion on EU regulation is owned by the Health and Safety Executive, which is part of the Department for Work and Pensions. I will be very happy, if he would like me to, to assist him in following up with the HSE and the DWP to find answers to his queries, while respecting the scientific independence of those organisations.
That brings me to the question of Northern Ireland. I want to let the hon. Member for Strangford know that I will be visiting Northern Ireland before the summer recess—hopefully in the coming weeks—and I am looking forward to meeting my counterparts and exploring the opportunities for the UK Government to support businesses in Northern Ireland. I will certainly make lithium and minerals part of the agenda, and I look forward to any support he can give me in making sure that we cover those topics. Northern Ireland is a crucial part of the United Kingdom, its economy is thriving, and I want to ensure that we seize any opportunities we find there. I also say to the hon. Member for Gordon that, when I am next in Scotland, I will do the same there. I thank him for raising the possibilities north of the border.
A core element of our international engagement, beyond the multilateral partnerships I have mentioned, is helping like-minded resource-rich countries to develop critical minerals resources in a market-led way that aligns with our shared sustainability, transparency, human rights and environmental values—I am glad that they were mentioned in the debate. That is how the Government are ensuring that the UK is leading the way on critical minerals, driving up industry resilience, ramping up domestic production, and fostering closer international collaboration on the world stage.
I thank my hon. Friend the Member for St Austell and Newquay for securing the debate. I am grateful for the work that he and other hon. Members across the House do in supporting us in the mission to ensure that our critical minerals supply chains are strong, sustainable and resilient now and for many years to come.
Sir Gary Streeter (in the Chair)
I call Steve Double to have the final say.
Steve Double
Thank you, Sir Gary, and I thank all hon. Members who have participated in the debate. I think we are all pretty unanimous on the importance of this subject to the UK and our future. I understand that for some people it is not the most interesting subject in the world, but it is so important and I intend to keep raising it.
I acknowledge much of what the Minister said. I am delighted to see him in his place and to hear the commitments he made. I will take him up on his offer to work with the DWP to get an answer from the HSE on the matter I raised, and I am grateful to him for that.
It is clear that we will always need to rely on global supply chains to some extent for some of our critical minerals, but I think we are all agreed that we need to make the most of our domestic supply as much as we possibly can, for all the reasons that we have covered in the debate. That is why, in Cornwall, we are genuinely excited about the opportunity for lithium extraction and determined to work to make the absolute most of it, for the benefit of both the Cornish economy and the UK as a whole. I am delighted that the Minister has offered to come and visit, and I look forward to welcoming him so that he can see for himself all that is going on in Cornwall to revive our mining history and point the way to a prosperous future in that regard.
I will conclude by thanking again all the Members who participated in the debate. I hope that we have laid down some markers that we will continue to raise and work on.
Question put and agreed to.
Resolved,
That this House has considered the supply of lithium and other critical minerals.