A major opportunity for the UK to establish a strategic presence in the rare earths industry has been lost, as a groundbreaking refinery project in East Yorkshire has been abandoned. This news comes as a blow to the country's ambitions in this critical sector, which is currently dominated by China.
The Rare Earths Conundrum: A Missed Chance for UK Dominance
Pensana, the company behind the ambitious $268 million project in Angola, has decided to shift its focus to the United States for investment. This move highlights the challenges and complexities of establishing a sustainable rare earths supply chain, especially in the face of global competition and market manipulation.
But here's where it gets controversial: despite their name, rare earths are not actually rare. They are, in fact, quite abundant in the Earth's crust. So, why the big deal? Well, it's all about the extraction process. These minerals, while common, are tricky and expensive to extract, giving countries like China an upper hand in the market.
China, according to Pensana, has been keeping prices artificially low to stifle competition. This has made it difficult for other countries, like the UK, to establish their own refining operations without significant government support.
The UK government, through Chancellor Rachel Reeves, has acknowledged the growing tension between the US and China over rare earths and is working on its own critical minerals strategy to reduce reliance on these global powers.
In 2022, Boris Johnson announced a multi-million-pound investment in the Saltend project, but according to Paul Atherley, founder and chairman of Pensana, this contribution fell short of expectations. He compares the UK's support to a deal between the US government and MP Materials, which received over half a billion dollars in investment and soft loans, along with a 10-year agreement for minimum pricing.
Pensana has since announced plans to collaborate with US refiner ReElement and list its shares on the Nasdaq, indicating a shift in focus towards the American market.
Mr. Atherley remains positive about the UK, with another of his companies, Tees Valley Lithium, pushing ahead with plans for a lithium refinery in the Northeast.
The Department for Business and Trade expressed disappointment over Pensana's decision but emphasized that it was a commercial choice. They highlighted their upcoming Critical Minerals Strategy and efforts to reduce industrial electricity costs as part of their modern Industrial Strategy.
So, what does this mean for the UK's rare earths ambitions? Has the country missed a crucial opportunity to establish itself in this industry? And what are the implications of this shift towards the US market? These are questions that deserve further exploration and discussion.
What are your thoughts on this development? Do you think the UK should have done more to support the Saltend project? Or is this a case of a commercial decision that the government should respect? Let's discuss in the comments and explore these intriguing questions further!
