Dominic Raab warned that unless Western governments are able to break China’s stranglehold on critical minerals required for the green energy transformation, households will face higher bills.
Former foreign secretary and deputy prime minister Rishi Sunak said Beijing’s efforts to dominate the materials that are used to manufacture wind turbines, panels for solar energy, and electric vehicles (EVs), risked driving up prices in the rest of world.
He warned that the UK and other Western nations could miss their net zero target if they do not make a “quantum leap” to secure their own independent supplies.
The rising cost of raw materials will increase the production costs for green technologies. This could lead to higher prices for consumers or for government.
The Telegraph quoted Mr Raab as saying: “If we talk about the green transformation, then you can’t have any of it without lithium, graphite, and other essential minerals that are needed to power wind turbines, solar panels, and electric vehicle batteries.
“It is not a market if there are so many concentrations of production and refinement [of these critical minerals] in China.
What will happen then? “Well, either we will all pay more – taxpayers, businesses, and us – or the price will increase.
“I think that’s what the problem will be, both for the taxpayers and the businesses in particular the green sector.”
Raab made his comments as he was joining Appian Capital as a geopolitical adviser. Appian Capital is a private equity company that invests in mining.
He will also chair a committee that was formed by Appian, a non profit organization which advises the US Government about energy security policies.
Minerals are essential for everything from the microchips in computers to the magnets needed for windmills and batteries used for electric vehicles.
Despite its lack of reserves, China is now the leader in refining. It processes 70pc (of cobalt), 70pc (of nickel) and 60pc (of battery-grade lithium) of all world cobalt.
Critics claim that it did this by undercutting Western standards of labour and environment and pumping billions of dollars in subsidies into its refinery industry.
When asked if he thought the UK and its allies took the issue seriously, Mr Raab responded: “Has Western society as a group been a little slow on the uptake? Yes, that is probably an accurate comment.
“Now governments are more aware of this issue.”
Michael Scherb (chief executive officer of Appian) claimed that the West is “20 years behind China in critical minerals”.
He continued: “It is the greatest challenge of this time.” Commodities mining is at the crossroads of geopolitics, technology and politics.
I do believe that for the first time Western governments are now taking this issue seriously. They’re late, but they are very late.
The warning follows claims by MPs that successive UK governments “failed” to recognize the importance of critical minerals despite China’s decades-long efforts to capture a large part of the market.
The Foreign Affairs Committee published a report in December accusing ministers of complacency and of allowing too much control of the vital minerals supply chain to be dominated by a single country, leaving the current government “a mountain” to climb.
The report stated: “The government has tried to be hands-off, but this has left the UK vulnerable in what is fundamentally a security matter.”
The MPs said that the UK’s critical minerals strategy published in 2022 was lacking detail, and did not take into consideration the specific needs of industries or the gaps to be filled.
The Department for Business and Trade spokeswoman said: “Given that the world is racing for critical minerals, we are taking decisive actions to ensure that we have resilient supply chains at home which give our businesses the certainty they require for the long term.”