UK Government Blocks Chinese Graphene Deal and Puts Versarien Future in Doubt

The UK government has intervened to halt a prospective joint venture between Versarien, a Gloucestershire-based developer of advanced graphene materials, and a Chinese peer. National security concerns were cited as the principal reason, casting uncertainty over the future of the once-celebrated British innovation firm.

Versarien has been at the forefront of graphene applications since its founding in 2010 by engineer Neill Ricketts. The material, discovered by Nobel laureates at the University of Manchester in 2004, has long promised to revolutionise industries with its remarkable strength and lightness. Despite this promise, Versarien has struggled to secure the necessary funding to bring its products to market.

This predicament led Versarien to seek support from Anhui Boundary Innovative Materials Technology BIMT based in China, with ambitions to create a joint venture for importing graphene, carbon nanotubes, and silicon-carbon anode materials. The partnership was poised to serve the electric vehicle, battery technology, and composite materials sectors in the UK.

The deal, however, needed clearance under the UK National Security and Investment Act of 2021. The Chancellor of the Duchy of Lancaster has now formally blocked it, citing a need to protect intellectual property and know-how related to graphene with potential dual-use applications. In a statement to the stock market, Versarien confirmed that the government’s decision prevents the transfer and use of key assets through the proposed joint venture.

Versarien’s stock value has reflected its decline, trading as a sub-penny share after peaking at 182p in 2018. The company’s financial difficulties have been exacerbated by a lack of investment in innovative British technology enterprises. Analysts warn that with scant alternative funding, the risk remains that Versarien could be sold to overseas interests should it enter administration, undermining the UK’s leadership in graphene research.

Versarien’s situation is being seen as symptomatic of a wider issue in the UK’s small cap sector. John Meyer of SP Angel, broker to Versarien, expressed concern about the exodus of talent and innovation caused by sustained underinvestment. British expertise in advanced materials risks being acquired by better-capitalised foreign firms at a fraction of its potential value, unless the investment environment improves for pioneering homegrown companies.