UK mining industry gets wake up call over risk of being at China’s ‘beck and call’ | City & Business | Finance
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Speaking to Express.co.uk CEO of Amati Global Investors Dr Paul Jourdan warned Europe has been quite slow recognising the strategic importance of mining and was in danger of being caught out on supply of raw materials. “The US has woken up” he explained adding that the Chinese “are buying all the lithium they can get their hands on. They (China) also completely dominate the processing. I think the Chinese have actually been the most far-sighted in terms of the supply issues that are coming.” Two companies in the UK are currently pushing ahead with plans to extract lithium through the return of mining in Cornwall.
Managing Director of Cornish Lithium Jeremy Wrathall said there was a “significant strategic element.”
“If we don’t secure this lithium supply then we are at the beck and call of China who have sewn up most of the world’s available lithium supplies.”
The government-funded Faraday Institution expect UK lithium demand to reach 72,000 tonnes by 2035.
Another UK mining company, British Lithium, is also racing to try to meet demand, predicting they’ll be able to reach an output of 25,000 tonnes.
Mr Wrathall described British Lithium as “absolutely not” a competitor due to the scale of demand meaning the UK would need every bit of lithium produced by both companies.
Chair of British Lithium Roderick Smith explained securing British production of lithium would be vital for the future of the car industry which will need to switch to electric and hydrogen vehicles in 2030 when new diesel and petrol sales are banned.
He said: “The biggest export the UK has is cars, there’s £84bn a year of GDP, and the Government has passed a law basically banning it.”
“The battery is 40 percent of the cost and 50 percent of the weight of the car so it’s all about the lithium battery.”
Mr Wrathall agreed adding “Without lithium we might as well go back to fossil fuels”.
Although highly widespread lithium deposits which are economical to mine are quite rare with most lithium currently mined in Australia and shipped to China for processing.
However, Mr Smith explained the emissions involved in this gave it a huge carbon footprint while the UK had a chance to do it all on one site.
With economic deposits of lithium in Cornwall, he suggested the UK was well placed at a time no battery-grade lithium was being produced elsewhere in Europe.
However, Dr Jourdan warned there was typically a ten-year gap between new mines being started and full output being reached meaning it was quite possibly the industry could see bottlenecks for raw materials.
Mr Smith agreed “we are going to see a shortfall”.
The need for mining to achieve net-zero targets may come as a surprise to some however Mr Wrathall was keen to emphasise the difference between modern metal extraction and popular ideas of historic mining.
“Technology has moved on” he explained, adding that it was now possible to extract lithium without damaging the environment, with this being “central to the company’s ethos.”
Elsewhere in the world, the situation is less clear cut.
Taking copper as a key example Dr Jourdan explained that one of the largest copper mines coming online was in the Democratic Republic of Congo (DRC) raising questions about dependency on a country with a poor human rights record.
He added: “Very often our desire to reduce carbon emissions comes into conflict with our desire for good corporate practice and human rights.”
Tesla has already been criticised for sourcing cobalt from the DRC.
Dr Jourdan suggested greater involvement in mining by western countries would be key here adding that Europe could do more to lower the barriers to entry.
“I’ve seen quite a number of attempts at building mines in Europe over the years and it’s a nightmare.
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“Huge lobbies against new mining projects, not much understanding of the strategic advantage of it.
“They get quite patchy government support, sometimes they got opposition.”
Mr Smith said it would take a “concerted effort by government” but the UK government was “well informed”
Mr Wrathall said Government had already been helping with Cornish Lithium receiving some grant funding, adding that the UK now recognised more needed to be done.
The Department for Business, Energy and Industrial Strategy (BEIS) will be publishing a UK Critical Minerals strategy in 2022 outlining plans to secure technology-critical metals.
A BEIS spokesperson said: “Within the UK, we will continue to explore opportunities around domestic extraction and processing of critical minerals, such as lithium, as well as their recovery, recycling and reuse to establish a viable circular economy.
“Through the UK’s extensive research and development expertise, we want to deliver a green industrial revolution and maximise sustainable, efficient use of critical materials which includes our commitment to recycling.”
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