16.5 C
Mining News

Drawing Insights for UK Critical Minerals Strategy from the US Experience

Reliable supplies of critical raw materials are essential for the green transition and to ensure the competitiveness of key national industries. The Inflation Reduction Act (IRA) in the US and the European Union’s Critical Raw Materials Act are the latest legislative interventions seeking to address the global supply chain vulnerabilities primarily resulting from China’s dominance. The UK, like the US and the EU, recognizes that there is currently no way around critical minerals for the electrification of society. However, there are concerns that the UK’s July 2022 Critical Minerals Strategy does not meet its purported aims. This article will explore lessons from the IRA and opportunities for the UK to refine its critical minerals strategy.

The significance of the UK as a mining destination has declined over the last century. This decline is partly due to the country’s focus on the North Sea and its positioning as the center of global mining finance rather than mineral production. As a result of limited domestic supply, the UK is vulnerable to the global mineral markets and China’s dominance in critical raw materials. These vulnerabilities put the UK’s key industries, such as the automotive sector and green technologies’ research, innovation and manufacturing, at a competitive disadvantage.

Supported by

UK Framework

In 2022, the UK sought to address its competitive disadvantages by publishing its Critical Minerals Strategy. This strategy was later supplemented by the Critical Imports and Supply Chains Strategy in January 2024. The Critical Minerals Strategy seeks to secure a stable supply of critical raw materials needed by the UK, by accelerating domestic capability, collaborating internationally and leveraging international markets to make the UK more resilient in the face of the energy transition. While the Critical Minerals Strategy is well-intentioned, it fails to propose the practical interventions and incentives its US and EU counterparts proffered. The Critical Minerals Strategy targets three areas for intervention — accelerating the growth of the UK’s domestic market capabilities, international collaborations and enhancing international markets through responsible finance for critical minerals.

Accelerating the growth of the UK’s domestic capabilities requires promoting lengthy, high-risk projects. These projects require substantial capital investments over extended periods, with uncertain rates of return at the time of investment. The Critical Minerals Strategy proposes means of signposting existing financial support opportunities, but, unlike the IRA, does not propose the creation of specific incentives. Projects must also navigate planning consent procedures, consult with affected communities and stakeholders, and properly address objections through mitigation and compensation measures. Regarding these projects’ specific characteristics/demands, the UK Critical Minerals Strategy needs to provide concrete and practical support; in particular, the industry feels it has been left to the mercy of local planners.

US Framework

The IRA has introduced several benefits, with its credit schemes attracting nearly $100 billion in investments and creating about 100,000 jobs. The IRA’s two main tools relevant to the mining industry are the advanced manufacturing production credit and the clean vehicle tax credit. Domestic mining companies excavating applicable critical minerals, meeting defined purity thresholds, will be able to seek a production credit equal to 10% of production costs. The clean vehicle tax credit provides indirect incentives to US mining companies, as new clean vehicles that meet specific percentages of minerals contained in the battery extracted, processed or recycled in the US or in any country with which it has a free trade agreement qualify for the credit.

However, one year on, it is becoming apparent that the IRA does not provide an answer for every issue. There are still questions about whether the US can meet its demand for critical raw materials post-IRA.

A recent study by S&P Global shows that demand from decarbonization technologies — such as electric vehicles, charging infrastructure, solar photovoltaic, wind and batteries — will continue to accelerate and be materially higher for lithium (+15%), cobalt (+14%) and nickel (+13%) by 2035 than was projected before the IRA was enacted in August 2022.

Adding the post-IRA demand increases on top of projected demand growth pre-IRA means that total combined energy transition-related demand for lithium, nickel and cobalt will be 23 times higher in 2035 than it was in 2021. The S&P Global study also finds, that although lithium is likely to be sufficiently supplied to the US under the IRA’s domestic content requirements, a supply gap will likely remain in respect of nickel, cobalt and copper. The IRA was not designed to unfold in a vacuum. It is predicated, to a certain extent, on international collaboration. However, the post-IRA demand trends show that the US will need to reorient and rely more heavily on trading patterns across several countries to meet its domestic demand.

In the long term, by building out its Critical Mineral Strategy and applying the lessons learned from the US, the UK can position itself to take advantage of the following lessons and opportunities:


Using credit schemes to fund and encourage domestic supply, processing and recycling has been proven to stimulate renewables and green technology activity.

The long-term framework of the IRA provides stability. Stability is desirable given critical raw materials projects’ long lead times and capital requirements.

Any UK framework must be more targeted than the IRA’s, as the UK cannot afford the broad range of sectors supported by public spending and incentive schemes as the IRA.

The UK’s Critical Minerals Strategy should also narrow and target the strategy on critical raw materials based on changes in demand after the IRA.


The UK should capitalize on the geological potential for some of the critical minerals available in the region to rebuild its mining supply chain and processing capacities.

The UK should capitalize on its convening power and corporate/financial capabilities to coordinate engagement with international supply chains to partner for the minerals the UK cannot source itself.

The UK should target establishing itself as an early mover in critical minerals recycling — the knowledge is there, and whilst the volumes of recyclable materials available from the green technology and renewable supply chain may not be sufficient at the minute, this is only likely to change.


Source: Energy Intelligence

Related posts

Uzbekistan targets rare earth dominance: A strategic shift towards global leadership

David Lazarevic

Breakthrough discovery: Europe’s largest rare earth deposit found in Norway

David Lazarevic

Residents of Knić oppose local mining – Association demands changes to spatial plan

error: Content is protected !!