UK criticised for dangerous reliance on China for critical minerals

The United Kingdom is dangerously dependent on China for the critical raw materials required for defence, renewable energy infrastructure and artificial intelligence, according to a parliamentary investigation. A select committee of MPs has called for urgent centralised policy and the establishment of a dedicated finance facility to fund rare earth and other critical mineral mines. The committee urged the government to deploy grants, equity and debt to accelerate a diversification programme that reduces exposure to Chinese supply chains.

Liam Byrne, chair of the business select committee, described critical minerals as the alpha of the new economy. He stated that the nation cannot rearm, build AI or deliver net zero targets without securing the minerals these technologies depend on. Despite China having weaponised its control over rare earths 16 years ago, the committee found that Britain remains dangerously exposed. This finding marks the second time in a week that the government’s policy on China has been criticised by the committee.

China holds a dominant position in the global supply of rare earths and other critical minerals, as well as their refined byproducts. These materials are used in a wide range of applications, from military jets and car locking systems to consumer products such as fridges and washing machines. The committee identified the processing stage as the primary bottleneck, noting that China dominates the refining of seven categories of minerals. This includes refined lithium needed for electric vehicles and rare earths used in the fuselage and wings of military aircraft to withstand temperature extremes.

MPs were informed that demand for lithium alone is projected to increase 45-fold between now and 2030, creating a high-risk dependency relationship with China. Simultaneously, demand for rare earths needed for permanent magnets in military jets and other applications is expected to rise 16-fold during the same period, coinciding with Britain’s efforts to rebuild its military capabilities. The committee highlighted that China is capable of suddenly turning off rare earth supplies, as it did in 2025, representing a strategic vulnerability for the UK economy and national security.

The report noted that separate restrictions on legacy chips following a dispute over a Dutch intervention in the China-owned Nexperia left the European car industry days away from stoppages last October. The EU, the US and other countries face similar risks of supply cut-offs by China. The committee argued that the UK is not putting enough effort into finding alternative supplies. Although Donald Trump secured a one-year reprieve on global export restrictions from Xi Jinping in October last year, which was extended to January 2027, the report suggests the UK remains at the mercy of US-China relations.

The committee proposed that the most realistic solution involves the UK working closely with G7 partners, the rest of Europe and Indo-Pacific countries to aggregate demand and bring in new suppliers. The investigation was frustrated by a lack of transparency from the government, with the committee stating that Parliament has no visibility of the capabilities the government is seeking to protect or the projects it is backing to reduce risk. A 10-point plan was drawn up, including identifying domestic mining opportunities, encouraging businesses to reduce procurement from China, and assessing planning processes that may hinder mining. The committee concluded that it could not be confident the government could satisfy any of its tests, stating that the UK requires new institutional and financial muscle.

A government spokesperson denied the lack of a critical minerals strategy, stating that £400m is being delivered to ramp up domestic production and recycling. The spokesperson added that the strategy sets clear goals for 2035, including meeting 10% of demand through domestic production and 20% through recycling, while ensuring no more than 60% of any critical minerals come from a single country.