The Elements of Innovation Discovered

UK critical minerals policy still vulnerable

Metal Tech News - April 22, 2024

Dods’ “Vital but Vulnerable: UK Critical Minerals Policy” report cautions that more needs to be done.

Dods Political Intelligence, an advisory service, has published a report to provide context and evaluation of current critical mineral policies in the United Kingdom. These are increasingly crucial for contemporary defense manufacturing, which acts as a deterrent against conflict. Meanwhile, global economies in a rush to transition to green industries are going to collectively require more critical minerals than are presently available.

The bottom line: there are still vulnerabilities in the UK's critical mineral policies today.

Positive steps

The International Energy Agency (IEA) predicts that "In a scenario that meets the Paris Agreement goals, clean energy technologies' share of total demand rises significantly over the next two decades to over 40% for copper and rare earth elements, 60-70% for nickel and cobalt, and almost 90% for lithium. EVs and battery storage have already displaced consumer electronics to become the largest consumer of lithium and are set to take over from stainless steel as the largest end user of nickel by 2040."

Without sufficient domestic reserves, Dods says the UK's proposed measures are insufficient to support the country's coming critical mineral needs.

Despite research and development investments aiding in mineral recovery from waste and the use of the National Security and Investment Act 2021 to "intervene in acquisitions of control over entities and assets in or linked to the UK economy, including those in critical mineral value chains," Dods says the UK government has not introduced enough subsidies across the critical minerals value chain to encourage development of a domestic, circular economy.

Without sufficient influence on key resources, production and refinement, the political intelligence advisory firm says this approach is inherently limited.

Policy isn't enough

The majority of today's critical minerals mining and refining is controlled by governments potentially unstable or hostile to the UK, weakening approaches based purely on international leadership and regulatory diplomacy.

In an increasingly globalized market, vulnerable commodity prices can cause economic and social instability.

The energy crisis of 2021 had many factors, including the Russian invasion of Ukraine, causing oil prices to hit their highest level since 2008, and the price of natural gas reached record highs, as did electricity. This demonstrated the far-reaching impacts of shortages inherent in a lack of resource diversity.

Price volatility of critical minerals has continuously increased risk and discourage investment.

Dods' report warns, "As these industries grow, the quantities of critical minerals required per unit of new production in relevant industries will also rise, further exacerbating supply chain constraints. For example, the International Energy Agency (IEA) estimate that 'a typical electric car requires six times the mineral inputs of a conventional car and an offshore wind plant requires 13 times more mineral resources than a similarly sized gas-fired plant.'"

This report, written by Jack Green-Morgan, a political consultant for energy, utilities, and net zero, identifies pitfalls inherent in a global increase in reliance on critical minerals going forward.

Though this isn't new information by any means, Western governments' policies, including those in the UK, are insufficient to tip the balance away from the Chinese domination of the critical minerals supply chain.

Green-Morgan advises immediate and decisive action in the short term to secure a sustainable and reliable supply of ethically produced critical minerals.

"Although the UK government is aware of the need to establish a secure supply of critical minerals to achieve its economic, net zero and defense ambitions, it will need to refine its approach to change the geopolitical status quo in the near term," the report said.

Green-Morgan went on to say the UK government "will be aware of the need to protect the UK's national and economic security by taking immediate action to establish a reliable supply of critical minerals."

Compared with the U.S., whose intensive policies and funding to secure their critical mineral supplies have come up against their own ambitious timelines and complex political and social issues at home and abroad, the UK's market-based policies are unlikely to yield timely results.

The report concludes that "with the Department for Business and Trade producing an update to the Critical Minerals Strategy in 2024, there is still time for more focused policy interventions to address these key challenges, and support the UK's future economic, national security, and decarbonization ambitions."

 

Reader Comments(0)

 
 
Rendered 05/19/2024 18:31