The new politics of critical minerals

The New Year’s celebrations were quickly overshadowed by the political developments in Venezuela.

The removal of Maduro and the statement by President Trump that ‘the US will run Venezuela’ shows how fast the geopolitical and geoeconomic tectonic plates are shifting. For US intervention is not all about stabilising its southern neighbours, preventing drugs – or even access to oil.

Venezuela’s mining exports accounted for 6% of its total exports in the 1990s, though most of the countries mining production collapsed following the government’s nationalisation of the private sector. The country possesses substantial supplies of rare earth elements (REEs) – particularly coltan and thorium – as well as other elements, such as gold and iron.

We saw the first shifting of these tectonic plates earlier last year when the Chinese introduced export controls on seven REEs. This caused turmoil within US and European defence, aerospace and semiconductor sectors – which is exactly what the Chinese aimed to achieve. The US imports 74% of its REEs from China – whilst 90% of midstream processing is within China. The ongoing volatility in the sector has spurred the US to accelerate its objectives to be REE and critical mineral supply chain independent – with billions of dollars invested by the US Departments of War and Energy in the past few years – and clearly to be more assertive in its foreign policy.

Critical minerals and REEs are the new oil. Other countries have also been reviewing their critical mineral strategies – some more urgently and with more muscle than others.

At the end of November, the UK government launched Vision 2035 – the UK’s critical mineral strategy. Key to the narrative is that demand will increase massively: between now and 2035 the requirement for lithium for example will increase by 1100%.

The UK’s strategy was late – and is the third iteration since Summer 2022. This versions objective is to ensure: the UK has the critical minerals it needs to drive economic growth and the clean energy transition, harnessing its competitive advantage in midstream processing and recycling of critical minerals.

To enable this, the UK must increase domestic production and build international partnerships – so that 10% of annual demand is met via domestic production and 20% by recycling – and ensure that no one country provides more than 60% of annual demand (China in particular).

My experience of the UK’s critical minerals strategies over the years is that we have been in the diagnosis stage for too long – we need action – but that action requires adequate finance.

£50 million has been allocated as part of the new strategy – too little – and, as it is grant funding, it is too focused on early stage firms rather than forensically focusing on one of the strategies key objectives (i.e. upscaling domestic production: the midstream). I am participating in the workshops that look at allocating those resources and am advocating for scaling-up the midstream.

I am also pushing that the commitment within the critical minerals strategy to overcome weaknesses in public financing – with the strategy writing: the mandates of our public finance institutions (PuFins) can constrain their ability to address emerging risks and market volatility associated specifically with critical minerals projects. This has resulted in some critical mineral companies and projects finding it difficult to access government-backed support. To address this, we will work with UK PuFins to identify ways in which critical minerals projects with high potential and strategic value can be supported effectively by government in a more coherent way and with appropriate urgency. We need capital to scale-up our midstream and help bridge the ‘valley of death’ in relation to investment.

My company, Metalysis, is capable of reducing 49 elements of the Periodic Table to metal and metal alloy powders for use across a range of advanced manufacturing sectors – capacitors, semiconductors, hypersonics, defence, aerospace, space, nuclear fission and fusion, and other markets. Our Gen 4 units can produce between 10 – 20 tpy of material (depending upon feedstock) per unit. At scale we can be a key solution for the UK and the West’s critical mineral supply chain resilience.

Solutions to the UK’s critical mineral requirements exist – they just need closer partnership and support.

Read the article online at: https://www.globalminingreview.com/special-reports/07012026/the-new-politics-of-critical-minerals/