- MPs warn that Britain remains dangerously exposed to China's control of critical mineral supply chains.
- UK demand for lithium is projected to rise 45-fold by 2030, while demand for rare earth elements could increase 16-fold.
- A parliamentary committee wants a new finance facility to support mining, processing and recycling projects in Britain and overseas.
Britain's dependence on China for critical minerals used in military equipment, artificial intelligence and clean energy has become a serious economic and national security risk, MPs have warned, calling for urgent action to diversify supplies.
A parliamentary investigation by the House of Commons Business, Innovation and Science and Trade Committee found that the UK remains “dangerously exposed” to China's dominance of critical mineral supply chains, despite warnings about the risks for more than a decade.
The report, published on Thursday (5), said Britain could not rebuild its military capabilities, deliver its net zero ambitions or develop the AI infrastructure needed for future growth without securing reliable supplies of these materials.
Committee chair Liam Byrne said: “Critical minerals are the alpha of the new economy. We cannot re-arm Britain, build AI or deliver net zero unless we secure the minerals these technologies depend on.”
He added that the UK needed to reduce its exposure to potential economic pressure from Beijing by developing alternative sources and strengthening domestic capabilities.
The warning comes as demand for materials such as lithium and rare earth elements is expected to rise sharply, driven by electric vehicles, renewable energy, advanced manufacturing and defence.
Why is Britain so dependent on China for critical minerals?
China's dominance extends beyond mining to the processing and refining stages, where the biggest supply-chain bottlenecks are concentrated.
The committee found that China is the leading refiner for 19 of the 20 strategic minerals identified by the International Energy Agency, with an average market share of 70 per cent. Its position is particularly significant in rare earth elements, lithium and other materials used in advanced manufacturing.
These minerals are essential to products ranging from electric vehicle batteries and wind turbines to military aircraft, semiconductors and data centres.
The processing stage is especially important because minerals extracted in one country often need to be refined elsewhere before they can be used in manufacturing. The committee heard that China had spent decades building its capabilities in this part of the supply chain, while many Western economies focused on higher-value manufacturing.
The risks became more visible in 2025, when China introduced export controls on several rare earth elements following trade tensions with the US. The restrictions disrupted manufacturers beyond their original targets, with production interruptions reported in the automotive industry.
The report also highlighted the scale of future demand. UK government projections suggest lithium demand across eight growth-driving sectors could rise from 2,525 tonnes in 2024 to 113,400 tonnes by 2030, an increase of 45 times.
Demand for rare earth elements is projected to increase 16-fold over the same period, while graphite demand could rise 15-fold.
Rare earths are used in permanent magnets found in electric vehicle motors, wind turbines and military platforms. Some are also important for advanced computing and defence technologies.
The committee warned that Britain has no domestic mining or refining capacity for rare earth elements, leaving it reliant on developing alternative international sources.
What do MPs want the government to do?
The committee has called for a more coordinated approach to securing critical mineral supplies, including the creation of a Critical Minerals Finance Facility to fund strategically important projects.
The proposed facility would bring together public finance institutions and use grants, equity, loans, guarantees and long-term purchasing agreements to support mining, processing and recycling projects in Britain and overseas.
MPs also want the government to identify opportunities for domestic mining, refining and recycling, improve geological surveys, address high industrial energy costs and review planning and permitting processes that could delay investment.
One proposal is to establish international buyers' groups with G7 partners, European countries and Indo-Pacific economies. By pooling demand, countries could share the high costs of developing new mines and processing facilities and make alternative suppliers more attractive to investors.
The committee said the government had not provided enough information about the supply-chain vulnerabilities it had identified or the projects it was backing to address them. It also said it could not be confident the government passed any of the 10 tests it had developed to assess progress on critical minerals policy.
The government rejected the suggestion that it lacked a strategy, pointing to £400 million in funding to increase domestic production and recycling and develop international partnerships.
A spokesperson said the strategy included targets for 2035: meeting 10 per cent of demand through domestic production, 20 per cent through recycling and ensuring no more than 60 per cent of any critical mineral came from a single country.
The committee acknowledged that eliminating dependence on China was neither realistic nor desirable. However, it said diversifying supplies would take more than a decade and require sustained cooperation between successive governments and industry.
For Britain, the challenge is not simply finding more minerals. It is building the financial, industrial and international partnerships needed to ensure that access to essential materials cannot be disrupted by decisions made elsewhere.
