Policy paper

Critical minerals refresh: delivering resilience in a changing global environment

Published 13 March 2023

This was published under the 2022 to 2024 Sunak Conservative government

Foreword

We call some minerals ‘critical’ for good reason. Critical minerals underpin far more of our lives than most people are probably aware. From electric vehicles to digital devices, medical and defence equipment to wind turbines and solar panels; large swathes of our economy are reliant on access to them.

As this government builds the foundation upon which Britain can thrive in the 21st century, it’s clear that we must create resilient and diversified mineral supply chains.

We need lithium, cobalt, nickel and graphite for batteries; silicon, tin and gallium for our electronics; rare earth elements for electric motors and so on.

But critical mineral supply chains are strained by rapidly increasing demand, and there’s no quick fix – it takes a long time to build new production and supply chains.

These supply chains are complex and opaque, often concentrated in specific countries. Markets are volatile, distorted and fraught with environmental, social and governance issues.

We cannot rely on mineral supply chains vulnerable to market shocks, geopolitical events and logistical disruptions, at a time when global demand is rising faster than ever.

So we are taking decisive action.

In July 2022, we published our first ever Critical Minerals Strategy, setting out our approach to accelerating our domestic capabilities, collaborating with international partners and enhancing international markets.

We are already making progress.

We have deployed funding – through the Automotive Transformation Fund and other facilities – to support the development of UK domestic supply chains. We have forged new partnerships with key countries. We have launched new funding for R&D and development assistance.

As we deliver on the strategy, we remain live to emerging challenges and opportunities posed by a dynamic global geopolitical and commercial landscape.

Other countries are acting to secure investment in alternative supply chains, build reserves, partner with resource-rich nations and use investment security measures to safeguard the independence of supply chains. Manufacturers are also taking action to partner and integrate with critical minerals suppliers. It is important that we are clear about the UK’s own needs and the part we can play in developing resilient supply chains.

This document sets out a refreshed approach to delivering resilient critical mineral supply chains and demonstrates government’s sustained commitment to securing the long-term supply of critical minerals for UK industry.

As part of this refreshed delivery approach, I have launched an independent Task & Finish Group on Critical Minerals Resilience for UK Industry, which will find out which – and how much – critical minerals UK industry needs now and in future, what risks they face and how businesses can promote resilience in their critical mineral supply chains. The Group will produce an independent report at the end of 2023.

This will help deliver the secure, stable supplies of critical minerals needed by UK industry now and in future.

Nusrat Ghani MP
Minister of State at the Department for Business and Trade

Key announcements

• the Critical Minerals Refresh sets out to refresh how we are delivering the strategy for UK businesses, in light of a changing global landscape and the sharpening of geopolitical competition. It reinforces the government’s commitment to the Critical Minerals Strategy, highlights our progress and sets out upcoming delivery milestones.
• government is launching an independent Task and Finish Group on Critical Minerals Resilience for UK Industry to investigate the critical mineral dependencies and vulnerabilities across UK industry sectors and opportunities for industry to promote resilience in its supply chains. They will deliver a report at the end of this year.
• government is accelerating its collaboration on critical minerals with international partners, including recent partnerships agreed with Canada and South Africa and engagement through the Minerals Security Partnership, International Energy Agency and G7.
• UK Research and Innovation’s Circular Critical Materials Supply Chains (CLIMATES) fund launched with an initial £15 million in current spending window to focus on making the UK’s Rare Earth Element supply chains more resilient and boost the circular economy.
• a £65.5 million Accelerate-to-Demonstrate (A2D) Facility, under the umbrella Clean Energy Innovation Facility (CEIF) platform through the £1 billion Ayrton Fund commitment, includes a dedicated funding pillar on technology innovations for critical minerals in developing countries.

Introduction

The UK’s Critical Minerals Strategy, published on 22 July 2022, set out an approach to improve the resilience of critical mineral supply chains to safeguard British industries now and in the future, deliver our clean energy transition and protect national security and defence capability. The strategy sets out how we will accelerate our domestic capabilities, collaborate with international partners and enhance international markets.

Governments and businesses across the world are taking action to secure supplies of critical minerals. This is reflected by other governments’ strategies on critical minerals, including Canada’s Critical Minerals Strategy released in December 2022 and the Australian government’s plans to develop a new 2023 Critical Minerals Strategy. The UK is committed to taking into account the evolving landscape on critical minerals in delivering its own strategy.

Reflecting the government’s Integrated Review Refresh (IR2023) priorities, this document sets out to refresh how we are delivering the strategy for UK businesses, in light of a changing global landscape and the sharpening of geopolitical competition. It reinforces the government’s commitment to the Critical Minerals Strategy, highlights our progress and sets out upcoming delivery milestones.

Demand for critical minerals is projected to increase rapidly, driving the need to build the resilient, diverse and responsible value chains of tomorrow. These value chains take time and investment to build, as do the associated skills and know-how. This Refresh demonstrates government’s sustained commitment to securing the supply of critical minerals.

This document also sets out plans for the new Task and Finish Group on Critical Minerals Resilience for UK Industry, which is investigating the critical mineral dependencies and vulnerabilities across UK industry sectors and opportunities for industry to promote resilience in its supply chains. They will produce an independent report at the end of 2023. This will help deliver the secure, stable supplies of critical minerals needed by UK industry now and in future.

Evolving international landscape

Russia’s continued illegal invasion of Ukraine has highlighted the vulnerability of concentrated commodity supply chains and the risk of overdependence on certain countries. Much of the world has been directly impacted by the effects of Russia’s actions on commodity prices and energy markets. The price of nickel^{[footnote 1]} on the London Metal Exchange (LME) rose by over 270% in the course of 3 trading days in March 2022^{[footnote 2]}, causing the LME to pause trading, which has been attributed to the market’s response to the conflict and associated sanctions. The situation has also heightened global demand for clean and independent sources of energy, and the critical minerals that those technologies will consume.

China is the biggest producer of 12 out of the 18 minerals assessed as critical in the 2021 UK criticality assessment. We will continue to do more to adapt to China’s impact on critical mineral markets - managing disagreements, defending our values and cooperating where our interests align, including pursuing a positive economic relationship and tackling global challenges such as environmental, social and governance issues.

Alongside geopolitical developments, ongoing supply chain disruptions have been caused by a combination of logistical factors persisting from the COVID-19 pandemic and incidents such as port lockdowns in China, port strikes and localised conflict. In addition, the continuing impacts of climate change have affected critical mineral supply chains, including flooding and water scarcity.

Taken together, these issues exacerbate the vulnerability of critical mineral supply chains. As set out in the UK’s Critical Minerals Strategy, supply chains are already strained by a confluence of challenges and constraints. Rapid demand growth could outstrip the rate at which new capacity can be built. Production is geographically concentrated and hard to trace. Markets are volatile, and the economics of minor metals – which are often by- or co-products – is complex. Environmental, social and governance issues remain a barrier to development.

While different jurisdictions’ approaches to securing critical mineral supply chains vary, there are several themes that have emerged.

Identified as an emergent trend in the IR2023, there is an emphasis on governments incentivising local or regional supply chains. The US Inflation Reduction Act introduces tax incentives for new electric vehicles (EVs) and hydrogen vehicles with a certain proportion of components and materials sourced from the US or their Free Trade Agreement partners. The EU is due to publish its Critical Raw Materials Act, with an aim of reinforcing monitoring capacities, strengthening local supply chains and building up strategic reserves ^{[footnote 3]}. China also continues to subsidise domestic production of critical minerals, while its state-owned or state-supported companies invest heavily in critical mineral assets abroad.

Governments of major manufacturing economies are seeking to forge international partnerships on critical minerals. This is happening bilaterally and plurilaterally, in groups such as the US-convened Minerals Security Partnership (MSP).

Governments are also using investment security^{[footnote 4]} measures to safeguard critical mineral supply chains. For example, in November 2022, the government of Canada ordered the divestiture of Chinese holdings in 3 Canadian critical mineral companies, reflecting updated policy guidance on the Investment in Canada Act to scrutinise the involvement of state-owned enterprises in Canada’s critical minerals sector.

Major manufacturers are proactively taking steps to secure their own supply of critical minerals, seeking to influence, partner with, or integrate into their supply chains.

These developments – and others – represent the constantly evolving global landscape in which the UK operates.

As noted in the UK’s Critical Minerals Strategy, the UK has unique strengths in critical minerals – both domestically and overseas – including mineral and mining expertise, R&D, finance, and standards, and it is a home to global mining majors. Leveraging its diplomatic, trading and development relationships, the UK is participating in building new resilient global supply chains.

We aim to support domestic production where it works for communities and our natural environment and increases resilience. Government is working to encourage investment along the whole critical mineral value chain, from exploration and mining to refining and midstream processing. The UK’s Critical Minerals Strategy set out a variety of funding mechanisms and non-financial support that government is deploying to support UK companies across the critical minerals supply chain to succeed in an increasingly competitive global critical minerals market. Recent funding successes are summarised in the next section.

However, it is not possible (or even desirable) for the UK to onshore all aspects of critical mineral supply chains. Resilient global supply chains have a diverse supply base and rely on global markets and an effective trading system. The UK and others benefit from such a system, and we will work with our partners to promote it.

The UK is playing a leading role in international partnerships, establishing government-to-government partnerships with a range of partners like Canada and South Africa, and via multilateral forums such as the MSP, G7 and International Energy Agency.

These partnerships support the UK’s ambition to increase the resilience of global critical mineral supply chains through collaborating internationally and helping secure supply chains between producer countries and the UK’s strong advanced manufacturing base.

This paper sets out how the UK is adapting its delivery against its Critical Minerals Strategy in light of the evolving global environment.

Parallels with semiconductor supply chains

The Department for Science, Innovation and Technology (DSIT) will publish the National Semiconductor Strategy, which will rely on both international collaboration and a strengthening of domestic capabilities. This recognises the global nature of the end-to-end semiconductor supply chain.

The production of semiconductors involves critical minerals, including silicon, gallium and others. However, the issues affecting semiconductor supply chains are distinct from those affecting critical minerals. Due to the relatively small quantities of critical minerals required, critical mineral supply issues are not a major driver of risk to the availability of most current-generation semiconductors.

Future compound semiconductors, such as gallium arsenide, may be more vulnerable to critical minerals supply disruption. 94% of the world’s gallium is produced in China and 4% in Russia (source: Critical Minerals Intelligence Centre). Gallium is a by-product of aluminium and zinc mining, meaning that supply and demand dynamics are complex, and markets are vulnerable to supply shocks.

The mineral demands of sectors such as semiconductors evolve over time. We are committed to ongoing updates to the criticality assessment, through regular review by the Critical Minerals Intelligence Centre, to identify changes to the criticality of minerals’ supply.

Delivery so far

• 2022 saw early progress by government, industry and academia against all aspects of the Critical Minerals Strategy
• this provides a foundation for accelerated progress in 2023

Over the past 6 months, the UK has already made significant progress against the ambitions of the Critical Minerals Strategy, in line with the A-C-E approach set out in the July 2022 publication: Accelerating the UK’s domestic capabilities; Collaborating with international partners; and Enhancing international markets.

Accelerating the UK’s domestic capabilities

To accelerate the growth of domestic capabilities, government has supported several critical mineral projects in 2022. Funding has been targeted towards projects that actively build innovative, resilient value chains in the UK and contribute to our clean energy transition. This also supports jobs and growth across the UK, reinforcing the Levelling Up agenda, especially in industrial areas.

New funding for domestic rare earth elements supply chains and recycling

Innovate UK’s Circular Critical Materials Supply Chains (CLIMATES) programme is committing £15 million towards recycling critical minerals, R&D investments, skills and engagement with international partners to improve the supply chain resilience of rare earth elements for permanent magnets in clean energy technologies. The first funding competition opened in Spring 2023. This builds on its £80 million investment into the Driving the Electric Revolution challenge supporting innovation in power electronics, electric machines and drives.

New funding to support innovative technologies to decarbonise the construction, mining and quarrying sectors

Following the launch of the Red Diesel Replacement competition in September 2021, the second phase of the competition will provide up to £32.5 million in grant funding for projects that demonstrate a low carbon, end-to-end system replacing existing red diesel-using technologies on construction or mining and quarrying sites.

Recent funding success for domestic critical mineral projects

In July 2022, government’s Automotive Transformation Fund (ATF) backed Pensana, which is seeking to become the UK’s first rare earth refiner, in Yorkshire.

In November 2022, Green Lithium, a company backed via the ATF, unveiled Teesport in Middlesbrough as the site for their forthcoming lithium refinery.

Announced in Autumn 2022, government has awarded a further £211 million to the Faraday Battery Challenge to boost research and development across the batteries sector. Delivery of the Faraday Battery Challenge continues to be supported by the UK Battery Industrialisation Centre (UKBIC), which acts as the link between battery technology and successful mass production.

Several companies continue to make progress towards exploring for and extracting critical minerals in the UK. For example, in 2022, Cornish Metals secured over £40 million of private investment to advance their project to dewater and re-operationalise the South Crofty tin mine. Tin’s criticality is driven by growing demand from the electronics sector, electric vehicles, and renewable power.

Progress is also being made to boost skills in this field. Universities and institutions continue to offer a range of courses – such as materials science, metallurgy and chemical engineering – that can support a domestic critical minerals value chain. Camborne School of Mines and employers in the mining sector are set to launch a new mining engineering degree apprenticeship programme in 2023. Regional clusters of expertise to support the development of the UK’s midstream processing and recycling of critical minerals continue to develop. For example, companies and institutions in the West Midlands have developed a regional cluster of expertise in recycling rare earth magnets.

To support a circular economy of critical minerals, the UK is supporting the Interdisciplinary Circular Economy Centre for Technology Metals (Met4Tech) through UK Research and Innovation’s (UKRI) National Interdisciplinary Circular Economy Research (NICER) Programme, a £30 million programme to support R&D in the circular economy, including in technology metals. The £15 million UKRI CLIMATES programme will also support innovation in the circular economy for rare earth elements.

Government continues to provide support to reduce the cumulative impact of energy and climate change policies on industrial electricity prices for energy intensive industries, including eligible critical mineral companies. Most recently, the Energy Bill Relief Scheme (EBRS) and the Energy Bills Discount Scheme (EBDS), were set up to support businesses with their high energy bills. These are supplementary to the existing relief schemes; the Energy Intensive Industry (EII) compensation scheme provides support for indirect carbon costs and the EII exemption scheme provides relief for a share of the indirect costs related to renewable electricity. In February 2023, government also announced the British Industry Supercharger, comprising targeted measures to ensure the energy costs for key UK industries are in line with other major economies around the world.

Collaborating with international partners

International collaboration and partnerships remain a priority in the UK’s strategy given the global nature of supply chains and geographic concentration of certain critical minerals. We know it is not practical or desirable to try to onshore all aspects of critical minerals supply chains, so the UK’s security of supply will always be an international issue. We are also clear that no one country by itself can ensure the resilience of global critical mineral supply chains.

To deliver on the strategy’s commitment to collaborate internationally on diversifying global supply, we have continued to engage across a range of multilateral forums, notably the MSP, the International Energy Agency (IEA), the International Renewable Energy Agency (IRENA), the G7 and the G20.

The UK is ramping up bilateral engagements with international partners, including with Canada, Australia, the Republic of Korea, Saudi Arabia, South Africa and others, some of which are already formalised in government-to-government partnerships. For example, the UK and South Africa recently established a Partnership on Minerals for Future Clean Energy Technologies to promote increased responsible exploration, production and processing of minerals in South and Southern Africa. Further, the UK and Canada have signed a landmark agreement to co-operate on critical minerals and boost green technology supply chains. At COP27, the UK hosted a panel event on critical minerals for the energy transition – the first of its kind – leading the global conversation and recognising the supply of critical minerals as an important factor in delivery on climate goals. The Prime Minister also announced a new development-funded international climate finance programme, the £65.5 million Accelerate-to-Demonstrate (A2D) Facility, under the umbrella CEIF platform through the £1 billion Ayrton Fund commitment. It includes a first-of-a-kind dedicated funding pillar on technology innovations for critical minerals in developing countries, establishing the UK as an Official Development Assistance (ODA) leader on critical minerals amongst developed country donors.

As a trading nation, the UK collaborates with international partners to provide innovative and environmental solutions to critical mineral mining, processing and recycling challenges, and is seeking to grow exports in support of the development of resilient infrastructure to ensure the trading flows of critical minerals are not interrupted.

The Minerals Security Partnership

In June 2022, Australia, Canada, Finland, France, Germany, Japan, the Republic of Korea, Norway, Sweden, the United Kingdom, the United States, and the European Union entered into the new MSP. The MSP aims to spur investment into critical mineral supply chains to incentivise diversification in the market, and is focused on four pillars: information sharing and cooperation; investment networks; elevation of environmental, social and governance standards; and recycling and reuse.

Enhancing international markets

Critical mineral markets are complex. Data are not readily available to track the flow of minerals along the value chain. Markets are volatile and have a history of being manipulated. Many critical minerals have no organised market on which to trade. Supply chains are also fraught with environmental, social and governance issues.

It is in the UK’s interests to support well-functioning markets and responsible, traceable supply chains, to help de-risk investments and development of new projects.

Leveraging London’s role as a centre of mining finance and metals trading, government is undertaking work to make international markets more responsive, transparent and responsible.

The UK has re-affirmed its commitment as a member of the Extractives Industries Transparency Initiative (EITI), advocating for better governance of the extractives and critical minerals sectors.

At the 2022 UN Biodiversity Conference (COP 15) the UK, along with Australia, Canada, France, Germany, Japan and the United States, signed up to the Canada-led Sustainable Critical Minerals Alliance, committing to promote high environmental, social and governance (ESG) standards and net zero mining practices, employing a nature forward approach, and building a circular economy in critical minerals.

To continue to support better functioning global markets and remove technical barriers to trade, the UK continues to actively engage in International Organisation for Standardisation (ISO) standard-setting processes through the British Standards Institution (BSI) to develop global technical standards in rare earth elements and lithium.

Delivery of government-led supply chain traceability initiatives continues. Led by Office for National Statistics (ONS)-Integrated Data Service (IDS), HM Revenue & Customs (HMRC) and UK Circular Economy Hub (CE-Hub), phase 1 of a pilot project to improve data traceability and transparency in the circular economy has concluded. Analysis and conclusions from phase 1 will form the basis of a UK Circular Economy framework, with the objective of creating a pioneering data pooling network that securely brings together public and private data from across industry, government and academia.

The UK’s Critical Minerals Intelligence Centre (CMIC) was launched alongside our Critical Minerals Strategy. It seeks to provide data and analysis on sources of the supply, demand and market dynamics of critical minerals. It has already published the UK’s first criticality assessment and a review of supply and demand of battery metals.

Supply Chain Resilience Framework

The Critical Minerals Strategy reflects government’s broader Supply Chain Resilience Framework, published in November 2022, which highlights five areas to explore when building resilience in supply chains: diversification, international partnerships, stockpiling and surge capacity, onshoring, and demand management. The framework constitutes a guide for both public and private sector organisations in considering potential actions aimed at mitigating risks and vulnerabilities in their supply chains, including in critical mineral supply chains.

Delivery plan and milestones

• for 2023, government has set out a refreshed set of milestones against the pillars of the Critical Minerals Strategy
• through a Task and Finish Group on Critical Minerals Resilience for UK Industry, government will engage industry sectors to understand their critical mineral supply dependencies and vulnerabilities, and work with them to drive up resilience. It will also establish a framework for monitoring and mitigating risk across sectors

Looking ahead, and in the face of rapid global developments, the UK is now reaffirming its commitment to improving the resilience of critical mineral supply chains over the next decade. Improving resilience of critical mineral supply chains is a long-term undertaking but requires action now.

We are seeking to safeguard UK industry, boosting the security of supply of the critical minerals they need. A secure supply of critical minerals has direct economic importance to UK industry, including our manufacturing sector. British manufacturers – from aerospace companies and battery plants to the factories making renewable energy products – need critical minerals, either in their raw or processed forms. A stable supply means manufacturers have confidence to do business in the UK, creating jobs and wealth and helping to Level Up the country. The UK’s manufacturing sector supports 2.5 million jobs and accounts for £183 billion of output.^{[footnote 5]}

We are also seeking to play our part in ensuring global critical minerals supply chains are resilient and diverse, to ensure that the critical products on which we rely – particularly those associated with clean energy technologies – are available when we need them.

To achieve these objectives, we are delivering in line with the A-C-E approach set out in the Critical Minerals Strategy, as well as pursuing foundational, cross-cutting engagement with those industries that rely on critical minerals.

We are focused on ambitions that will have the highest impact and highest feasibility to deliver in practice, and those that reflect and reinforce broader government goals and strategic priorities. The framework below sets out this refreshed approach to drive progress against the strategy and sets out upcoming delivery milestones.

This delivery plan will need to be agile and flexible to account for the evolving landscape, from geopolitics to financial markets.

Framework to deliver resilience

Cross-cutting engagement and analysis

1. Helping British manufacturers secure their supplies

Working with UK industry to identify risks and support an industry-led approach to driving resilience for priority UK manufacturers.

Upcoming milestones:

• sector engagement: Throughout the course of this year, government will engage priority manufacturing sectors that rely on a secure supply of critical minerals to understand their dependencies on critical minerals and discuss practical, industry-led approaches to boosting the resilience of their critical mineral supply chains
• task and finish group on Critical Minerals Resilience for UK Industry: This year, an independent group of industry experts will investigate the critical mineral dependencies and vulnerabilities across UK industry sectors and opportunities for manufacturers to promote resilience in their supply chains
• risk framework: The Task & Finish Group on Critical Minerals Resilience for UK Industry will develop a risk framework to monitor and mitigate critical mineral supply risk across different manufacturing and industry sectors, underpinned by qualitative and quantitative tests and a survey of industry, investors and other stakeholders
• UK Supply Chains and Import Strategy: Later this year, government will publish a UK Supply Chains and Import Strategy. This will support businesses to make decisions with resilience in mind by setting out the UK’s priorities and approach to critical imports and driving specific government and business action to ensure the continued supply of these key goods
• CMIC sector material requirement studies: Early this year, the CMIC will publish studies into material requirements for specialist alloys in the aerospace and defence sectors and technologies for the hydrogen economy
• criticality assessment update: This year, the CMIC will update the UK criticality assessment (following the first criticality assessment in 2021), to reflect the dynamic nature of global supply chains and mineral markets

Accelerate the UK’s domestic capabilities

2. Enabling domestic production of critical minerals

Assessing critical minerals potential within the UK, and supporting mining and refining.

Upcoming milestones:

• signposting government funding support: government will support critical mineral companies to navigate the landscape of government funding support and engage with organisations responsible for funding to design and deliver funds to include critical minerals where relevant
• geological data: In the Spring, the CMIC will publish a preliminary national-scale assessment of the UK’s geological potential for critical mineral extraction. The CMIC will also boost ongoing work to scan legacy exploration data to make it more accessible to industry
• UK potential studies: Early this year, the CMIC will publish studies into the UK potential for extraction and production of battery materials
• planning: Reforms proposed as part of the Levelling Up and Regeneration Bill^{[footnote 6]} will aim to deliver improvements across the planning system as a whole to create a faster, more efficient system, including when planning for critical mineral projects. There will be numerous engagement opportunities for stakeholders, including formal public consultations
• mineral rights: In the Spring, the CMIC will publish a study into mineral rights-related barriers to domestic exploration and extraction of critical minerals and potential solutions
• skills and public engagement: By Summer of this year, government will work with Institute of Materials, Minerals and Mining (IOM3) to investigate skills required to support development of domestic critical mineral supply chains. In 2023, CMIC will begin a programme of public engagement on the importance of critical minerals

3. Developing the UK’s investment proposition

Creating a foreign direct investment (FDI) proposition to promote investment in UK critical minerals projects.

Upcoming milestones:

• UK’s FDI proposition: Over the course of 2023, government will publish an FDI proposition for domestic critical mineral mining
• UK Manufacturing Investment Prospectus: The importance of critical minerals to supply chains will be recognised in the Manufacturing Investment Prospectus when it is published in 2023, showcasing the UK’s manufacturing capability, stimulating investment and helping manufacturers navigate the government’s support on offer

4. Promoting a circular economy

R&D and commercialisation of recycling technologies; regulatory mechanisms to incentivise circularity.

Upcoming milestones:

• sustainable resource management: This year, government will support the UK’s Interdisciplinary Circular Economy Centre for Technology Metals (Met4Tech) to demonstrate its potential to become a UN International Centre of Excellence in Sustainable Resource Management
• waste regulations: Defra will consult on regulations for Waste Electrical and Electronic Equipment (WEEE) in 2023 and subsequently for end-of-life batteries
• circularity assessment: Working with the CMIC, government will evaluate the circularity of critical minerals in the UK today as a baseline for future work and to highlight opportunities

5. Supporting innovation

Shaping R&D on critical minerals to target the biggest challenges to security and greening of supply.

Upcoming milestones:

• R&D blueprint: In Spring 2023, government and Innovate UK Knowledge Transfer Network (KTN) will publish R&D blueprint assessing the landscape for publicly-funded R&D related to critical minerals, to identify UK research capabilities and areas of future priority

• Rare earth elements: In 2023, Innovate UK will deliver its £15 million CLIMATES fund to support supply chain resilience of rare earth elements

Collaborate with international partners

6. Partnering with key countries

Developing our trading, diplomatic and development relationships with priority partners; Leading engagement on the development of resilient and diverse supply chains.

Upcoming milestones:

• bilateral engagement: government will continue efforts over the course of 2023 and beyond to formalise collaboration with our priority partners, including producing nations. We will ensure that our engagements promote the values set out in our strategy, including by delivering for UK businesses and building supply chains that adhere to the highest ESG standards
• multilateral cooperation: government will continue to engage with key critical mineral multilateral forums, including the Minerals Security Partnership (MSP), International Energy Agency (IEA), G7, International Organization for Standardization (ISO) and others, to continue to influence global activity in line with UK priorities
• ODA: government will establish and launch the new development-funded Accelerate-to-Demonstrate (A2D) Facility in 2023, which includes supporting technology innovations for critical minerals in developing countries

7. Mobilising the UK’s private sector globally to develop diverse supply chains

Supporting export of the UK’s clean mining, midstream and recycling capabilities, boosting UK participation in diversified responsible and transparent supply chains.

Upcoming milestones:

• facilitating UK export: government will leverage engagement with our international partners to promote and secure opportunities for UK companies overseas, including through trade missions and identifying opportunities with liked-minded countries, and by working with UK Export Finance (UKEF) to facilitate the use of UK government-backed guarantees and loans to enable investment in strategically important overseas critical minerals projects

• Free Trade Agreements (FTA): government will ensure consideration for critical minerals is embedded in the UK’s forthcoming FTAs

Enhancing international markets

8. Enhancing financial markets

Convening mining, finance and trading communities in the City of London to progress development of organised trading markets and promote investment.

Upcoming milestones:

• financial market development: This year, government will convene UK mining, mining finance and metals trading communities to stimulate market-led efforts to develop more responsive and organised trade of critical minerals, and promote more resilient financial markets. government will seek to facilitate and encourage greater private sector capital investment in critical mineral projects along the value chain

• technical standards: This year and beyond, government will continue to engage global technical International Organization for Standardisation (ISO) through the British Standards Institution (BSI) to develop global technical standards in critical minerals, such as rare earth elements and lithium. This supports better functioning markets and removes technical barriers to trade

9. Supporting data and transparency

Supporting initiatives to improve data and traceability.

Upcoming milestones:

• supply and demand studies: The CMIC will continue to deliver reports on the supply and demand of critical minerals in key manufacturing sectors, during its first phase of funding up to March 2025
• improving data standards: government will host a Wilton Park Conference in March 2023 to discuss the feasibility of an initiative to improve data standards and transparency of critical minerals markets information globally
• traceability initiative: Phase 2 of a pilot project to improve data traceability and transparency in the circular economy by March 2023 will be delivered by ONS-Integrated Data Service (IDS), HMRC and UK Circular Economy Hub (CE-Hub). Phase 2 will convene stakeholders across the supply chain from the EV and Wind Turbine sectors, with the objective of creating a pioneering data pooling network that securely brings together public and private data from across industry, government and academia

10. Boosting environmental, social and governance (ESG) performance

Demonstrating global leadership on ESG performance to champion high standards and reducing vulnerability to disruption, and levelling the playing field for responsible businesses; Exploring how to tackle illegal mining in partnership with third countries, UK industry and international organisations such as the EITI.

Upcoming milestones:

• sustainable Critical Minerals Alliance: This year, the UK and other partners will work through the Canada-led Sustainable Critical Minerals Alliance to promote net zero mining practices, employ a nature forward approach, and build a circular economy in critical minerals
• anti-corruption: government will continue to ensure ESG standards in critical minerals include anti-bribery measures and anti-corruption governance frameworks, such as the OECD Anti-Bribery Convention, the Open Contracting Data Standard and references to Beneficial Ownership Transparency. government will update and publish a new anti-corruption strategy. This will support broader efforts to tackle corruption in climate, energy transition and environment, of which integrity in the critical minerals sector is vital
• green finance strategy update: This year, government will publish an update to the Green Finance Strategy. This will build on the 2021 ‘Greening Finance: A Roadmap to Sustainable Investing’, which looks to improve the climate and environmental information and data available to the market

Critical Minerals Expert Committee and Critical Minerals Intelligence Centre

The Critical Minerals Expert Committee played an important role in advising government on its Critical Minerals Strategy and continues to act as a valuable resource for expertise on emerging issues. The CMIC will continue to play an important role of monitoring the supply, demand and market dynamics of critical minerals and providing evidence to policymakers.

Task and Finish Group on Critical Minerals Resilience for UK Industry

In July 2022, HM government published the UK’s Critical Minerals Strategy to promote resilience in critical mineral supply chains, safeguarding UK industry, supporting the clean energy transition and protecting national security and defence capability. Collaboration between government, industry, academia and other stakeholders is vital to successfully delivering on its wide range of ambitions and harnessing the UK’s wealth of expertise. It is especially important to support UK industry – those that depend on a secure supply of critical minerals – to promote resilience and diversity in their supply chains.

To support this objective, government is establishing an independent Task and Finish Group on Critical Minerals Resilience for UK Industry. This group of experts and industry leaders is appointed by, and reports directly to, the minister for Industry and Investment Security. Their objectives are to investigate the critical mineral dependencies and vulnerabilities across UK industry sectors, support UK industry to promote resilience and diversity in its supply chain and design a framework for monitoring and mitigating critical mineral supply risk across UK industry sectors. It will deliver its findings at the end of the year.

Next steps

Government will continue work to deliver the Critical Minerals Strategy and achieve the milestones set out above. We remain alive to the evolving global landscape and will be agile in our delivery. We expect to publish a delivery update in 2024 to report on progress, highlight major developments and set out refreshed delivery plans.

Acronyms

• ATF: Automotive Transformation Fund
• CE-Hub: Circular Economy Hub
• CEIF: Clean Energy Innovation Facility
• CLIMATES: Circular Critical Materials Supply Chains
• CMIC: Critical Minerals Intelligence Centre
• DSIT: Department for Science, Innovation and Technology
• ECA: Export Credit Agency
• EITI: Extractives Industries Transparency Initiative
• EVs: Electric Vehicles
• ESG: Environmental, Social and Governance
• EU: European Union
• FDI: Foreign Direct Investment
• FTA: Free Trade Agreements
• HMRC: HM Revenue & Customs
• IEA: International Energy Agency
• IDS: Integrated Data Service
• IR2023: Integrated Review Refresh
• IRENA: International Renewable Energy Agency
• ISO: International Organisation for Standardisation
• KTN: Knowledge Transfer Network
• MSP: Minerals Security Partnership
• Met4Tech: Circular Economy Centre for Technology Metals
• NICER: National Interdisciplinary Circular Economy Research
• ODA: Official Development Assistance
• OECD: Organisation for Economic Co-operation and Development
• ONS: Office for National Statistics
• R&D: Research and Development
• UKBIC: UK Battery Industrialisation Centre
• UKEF: UK Export Finance
• UKRI: UK Research and Innovation
• WEEE: Waste Electrical and Electronic Equipment

1. Critical Minerals Intelligence Centre (2022), Nickel is currently on a ‘watchlist’ of minerals that are deemed to be increasing in criticality. ↩

2. London Metal Exchange (2023), Independent Review of Events in the Nickel Market in March 2022. ↩

3. European Commission (2022), Critical Raw Materials Act: securing the new gas & oil at the heart of our economy. ↩

4. The UK’s National Security and Investment (NSI) Act 2021 gives government powers to identify and, if necessary, scrutinise acquisitions of control over entities and assets in or linked to the UK economy, including those in critical mineral value chains, which might cause national security concerns. There are 17 sectors subject to mandatory notification under the NSI Act; critical minerals are included within the sector of advanced materials. ↩

5. Make UK (2022), UK Manufacturing: The Facts: 2022. ↩

6. These planning reforms extend to England and Wales, with most applying in England only. However, Part 6 of this Bill (Environmental Outcomes Reports) does extend and apply UK-wide, as do the clauses related to Nationally Significant Infrastructure Projects. ↩