23 January 2025

China’s critical mineral stranglehold threatens us all

By

A trade war is well underway between China and the US, with tariffs, bans on exports and more already coming into effect. With Donald Trump having just entered the White House, this is only likely to escalate.

But it isn’t just the US feeling the heat, China’s willingness to weaponise critical minerals with an export ban exposes a major gap in the UK’s security. We are heavily reliant on these critical minerals – most importantly, for new energy projects. As it stands, we’re not gripping this issue in the right way, and Labour’s soft approach towards the PRC is deeply misguided. It will make us further reliant on Chinese resources and ignore the simple fact that if they are willing to take on the US, they could do the same, and more, to us.

As the world decarbonises, the need for clean, cheaper energy technologies has driven demand for critical minerals used for everything from battery components to wind turbines. This explains why the demand for lithium tripled from 2017 to 2024.

Despite what most might think, China has been ahead of the curve on the energy transition, strategically investing in critical minerals and dominating the supply chain from mining and refining to processing. In fact, China has now monopolised 80%-100% of many critical minerals essential for new energy projects, particularly renewables.

Cobalt, which is vital for wind turbines and batteries, is a key example of Chinese domination. Despite 70% of global cobalt production being found in the Democratic Republic of Congo, China has taken control of 15 out of 19 of the primary mines in the African nation. This is on top of the fact that 65% of global cobalt refining and chemical manufacturing is located within China.

While China was tightening its grip on critical mineral supply chains, we failed to respond and are now heavily exposed. And the Labour Government is being naive to renew relations without preparing for the worst.

We should not be allying ourselves with China. We should be doing everything we can to take back control by diversifying our supply chains.

This does not mean halting the energy transition and returning to fossil fuels. Our energy transition is vital to increase energy security and provide more security in energy prices by preventing price spikes from volatile international gas markets. It will also free the UK from the grip of hostile petrostates, like Russia, and keep them from weaponising fossil fuels against the UK

Additionally, diversifying our supply chain for these critical minerals has benefits beyond the energy transition. They are essential for defence, electronics and a number of other sectors.

Previous Conservative governments have tried to do this, laying out some plans to mitigate Chinese control. The Critical Minerals Strategy was launched to set out a pathway to grow domestic capabilities and international collaboration. Alongside this, the Minerals Security Partnership was established between the UK, USA, EU and other countries to counter China’s dominance and increase sustainability.

But this is simply not enough. The Government must now harness private finance and post-Brexit freedoms to secure critical mineral supply chains.

We need to sign more new critical mineral partnerships. The new partnership with Saudi Arabia is a promising step, but we need to be more ambitious. Further critical mineral partnerships will deepen collaboration between signatories, broaden supply chains, remove trade barriers and incentivise investment into the UK. New opportunities will be available for British businesses as China’s global dominance is diminished.

The UK must also create a domestic circular economy for critical minerals, which will lower emissions and reduce the volume of critical minerals sent to landfill, as they will be reused and recycled. This will reduce our reliance on imports from China on virgin critical minerals.

China’s stranglehold over critical minerals threatens both the UK’s national security and energy transition. Geopolitical tensions are rising and the UK must shore up critical mineral security to reduce our vulnerability to an export ban. Forward-thinking policies will secure and diversify the UK’s critical mineral supply chains, and frustrate China’s dangerous designs.

Click here to subscribe to our daily briefing – the best pieces from CapX and across the web.

CapX depends on the generosity of its readers. If you value what we do, please consider making a donation.

Elinor Bale is Climate Programme Officer at the Conservative Environment Network.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.