Critical raw materials: high risks for the UK

Critical raw materials are minerals essential for producing devices, such as mobile phones, renewable energy technologies, such as wind turbines and solar panels, and a range of industrial applications. They are part of our everyday life, and we will become increasingly dependent on them in the future as we move away from fossil fuels and transition to clean energy. The International Energy Agency estimates that, by 2024, we will need four times as many critical raw materials as we do today and over 500 percent more by 2050.

Apart from the fact that global demand may even exceed global capacity, the problem is that the critical raw materials market is dominated by a handful of countries and these essential minerals are often extracted from remote parts of the world. Producers of critical raw materials include Russia (the mineral palladium), China (graphite), and the Democratic Republic of the Congo (cobalt). Supply chains from these countries tend to be complex and unstable, especially given the remote locations. It also takes the producers a long time to build new mines and establish mineral processing capabilities. Dependency on these suppliers makes the UK vulnerable to supply chain disruption, which can have disastrous consequences.
 

The UK government’s response

To cope with these challenges, the UK government published its first Critical Minerals Strategy in 2022. The aim of this strategy is to improve the resilience of critical raw materials supply chains so enough sustainably produced minerals will always be available on transparent, smoothly running markets in future.
 

‘Accelerate, Collaborate, Enhance’

The UK government’s strategy follows the A – C – E approach: accelerate, collaborate, enhance.

  • Accelerate means maximizing the UK’s domestic production of critical raw materials by reviving its mining tradition and improving the circular economy of critical raw materials in the UK. This will reduce the UK’s dependency on international markets.
  • Collaborate entails working together with international partners and developing diplomatic and trading relationships. The aim here is to diversify global supply, so the market is not dominated by a few countries.
  • Enhance involves improving international markets to make them less vulnerable to disruption. It also aims to promote London as the global centre of responsible finance for critical raw materials.

Leading global consulting services provider Deloitte believes that the UK government’s strategy is ambitious but achievable if certain criteria are met, for example the development of a good, UK-based circular economy for critical raw materials.
 

The situation in Europe

The UK is not alone in its dependency on critical raw materials. The EU has already recognised the risks of importing critical raw materials from a limited number of countries and aims to diversify the supply of critical raw materials in future. It has put together a package of measures intended to promote the refining, processing and recycling of critical raw materials in Europe. Its goal is to reduce dependency on individual third countries for a total of 17 critical raw materials by 2030. The EU’s CMRA Act (Critical Raw Materials Act) also aims to ensure that the EU has access to a dependable and secure supply of sustainably produced critical raw materials.

Dependency with regard to critical raw materials is a concern not just for the UK but for Europe too. A multifaceted approach is required if we are to be able to meet increasing demand in the future. However, both the UK and the EU have taken steps to ensure security of supply.