The UK is aiming to grow in the critical minerals space via strategic partnerships and the industrial strategy the government is working on, UK Industry Minister Sarah Jones told S&P Global Commodity Insights at the Future Minerals Forum held in Riyadh on Jan. 14-16.
The UK and Saudi Arabia signed a memorandum of understanding at the event, with Jones saying the signing served as a foundational step for the UK in its efforts to grow within the critical minerals sector.
"Our number one priority is growth," she said, highlighting the government's commitment to a modern industrial strategy, or 10-year plan, that focused on eight growth-driving sectors, including advanced manufacturing, defense, clean energy, digital, and technologies.
"In order to, support this, we will need a diverse array of critical minerals going forward," she said.
As the UK government develops its industrial strategy, Jones highlighted the consultation process gathered over 3,000 responses and 20,000 individual data points, with the feedback crucial in identifying the eight sectors where growth potential was most promising.
"We are currently analyzing responses to determine which subsectors to focus on, such as automotive or aerospace," she said.
While acknowledging the decline of the UK's manufacturing base in certain sectors, particularly steel, Jones said the UK government hoped to reverse this trend.
"We need to be strategic about which sectors are viable for growth and essential for national security," she said, referencing the global shocks experienced due to events like the Ukraine-Russia war.
The government aims to intervene earlier in the manufacturing process to foster growth rather than waiting until industries are struggling, she said.
"The previous government tended to let the market play out on its own and only intervened when industries were struggling, at a high cost to taxpayers. We want to flip the approach to support growth rather than just coming in at a crisis point," Jones said, emphasizing the importance of providing direction and stability for industry partners.
Securing supply chains
Jones also outlined the key challenges in securing the UK's supply chains for critical minerals, for example, the UK not having as many natural resources as some other countries.
However, she pointed out there were still opportunities to develop local resources, particularly in Cornwall, where the government was supporting the reopening of lithium and tin mines.
"There's a strong heritage of mining in that region, and the local population is eager to see it revitalized," she said.
In addition to local resource development, Jones highlighted the importance of processing capabilities within the UK. "We need to invest in recycling and the circular economy," she said, noting that universities were exploring innovative technologies to extract critical minerals.
Jones added the government was also engaging with the London Metal Exchange and various countries to explore strategies for diversifying supply chains.
"Relying on a single country for critical resources poses challenges, and these discussions were a key focus at the ministerial roundtable," she said.
The Minister stressed the importance of looking ahead to determine future needs in critical minerals and not just the present requirements. "We need to look ahead and see what we will require in ten years," she said, emphasizing the need for a proactive approach to ensure security of supply.
The MOU with Saudi Arabia was vital given the geopolitical challenges that have arisen in recent years, she added.
"Relationships with our allies are important to ensure future security of supply. Saudi Arabia and the UK have a shared position around these insecurities and the MOU is a start rather than an end," Jones said.
She pointed out the previous government faced challenges due to frequent changes in ministers, which hindered the establishment of enduring relationships. "We now have a four- or five-year period of stability that allows us to build on these relationships and create substantial joint partnerships," she said.
Navigating trade uncertainty, energy transition
With potential trade wars on the horizon, in light of possible US tariffs, Jones acknowledged the uncertainty permeating the market. "Insecurity has become the new normal," she said, although emphasized the UK's commitment to free trade and maintaining relationships with allies like the US.
During a ministerial roundtable at the event, discussions were focused on the establishment of centers of excellence to foster regional collaboration and expertise in mining, with Jones emphasizing the need for sustainable mining practices using standards, addressing concerns about environmental impact, and ensuring that mining operations benefit local economies.
The discussions also touched on the challenges faced by some African countries in the mining sector, where economic benefits have not always materialized but environmental pollution has.
"We need to ensure that standards and classifications [around the green agenda] do not become barriers for these countries that struggle to meet decarbonization goals," she said.
"We want to be front and center and influencing the movements of climate change...We want to provide certainty for businesses through the industrial strategy and support them going forward," she added.
