UK approves use of export finance to secure critical minerals
UK Export Finance can now provide financial support for overseas projects that source critical minerals for use in major UK industries.
Lithium, an example of a critical mineral
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Chancellor announces availability of export credit financing to help British industries access a stable, long-term supply of critical minerals.
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There is high global demand for critical minerals which are increasingly vital to long-term industrial growth, emerging technology and the net zero transition.
The Chancellor has announced that UK Export Finance (UKEF), the government’s export credit agency, will offer financial support for overseas projects that supply critical minerals fuelling UK industrial growth and the net zero transition.
By securing contracts which increase and diversify UK access to critical minerals, this will help the UK to build economic resilience and lower the risk of supply-chain disruption in major industries like automotive, defence and aerospace.
‘Critical minerals’ are raw materials like lithium, graphite and cobalt which are essential to the UK’s largest exporting sectors. They are used in range of emerging and sustainable technologies like electric vehicles, solar panels and wind turbines.
Financing will be offered in the form of credit guarantees to overseas companies, helping them access debt financing for projects which supply UK exporters with critical mineral products – including both raw and processed materials.
It is expected that UKEF will work with other ECAs and public financial institutions to finance eligible projects and support investment into new supply routes.
This would make it easier for UK manufacturers to secure contracts with critical mineral suppliers in countries with vast mineral deposits, including Australia, which holds large deposits of lithium.
Jonathan Reynolds, Secretary of State for Business and Trade, said:
There is intense global competition for critical minerals like lithium, tin and cobalt which are essential for industrial growth, British industries and our journey towards net zero.
As the energy transition pushes demand to new highs, this financing offer will help UK companies to get a seat at the table, build international partnerships and secure their critical mineral needs.
Helping exporters to access these vital resources will support UK industrial growth and our leadership in emerging technology.
Kirsty Benham, Chief Executive Officer, Critical Minerals Association (UK), said:
We welcome the new export finance offering for critical minerals, which supports UK manufacturers and supply chain security. The offer demonstrates the importance of critical minerals to UK Government, and showcases the UK’s strengths as a serious buyer of these strategically important materials.
We look forward to working closely with UKEF and supporting the development of this offer into secure, resilient, responsible critical mineral supply chains for the UK and MSP partners.
Sean Sargent, Chief Executive Officer, Green Lithium, added:
Green Lithium’s refinery in Teesside will be a future importer of critical raw materials and, following processing, a UK exporter of battery chemicals. This new export finance offering from UKEF is precisely the sort of initiative that will help UK businesses strengthen relationships with international partners and contribute to the development of stronger international supply chains, while also supporting critical minerals industrial development in the UK.
It is a welcome development from the UK Government, and a facility that will be of interest to several of our international supply chain partners.
The UK government is a founding member of the US-initiated Minerals Security Partnership (MSP), which aims to help member economies secure a stable access to critical minerals.
Today’s announcement follows the recent launch of an MSP finance network, in which UKEF is working with other export credit agencies and financial bodies to help de-risk and increase financing for critical minerals projects.
UKEF has also used its existing products to support UK capability in critical minerals production. It recently announced a guarantee supporting machinery exports to one of Central Asia’s largest copper-production facilities.
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