UK MPs warn of dangerous China reliance on critical minerals

A UK parliamentary committee has concluded that Britain is "dangerously" dependent on China for the processed minerals its military, renewable energy industry and artificial intelligence sector need, and called for a state-backed fund to pay for alternatives.

The business select committee, chaired by Liam Byrne, published the findings of its inquiry into critical minerals, The Guardian reported. It recommended a single centralised policy and the creation of a "critical minerals finance facility" offering grants, equity and debt to speed up mining and diversification.

"Critical minerals are the alpha of the new economy," Byrne said. "We cannot rearm Britain, build AI or deliver net zero unless we secure the minerals these technologies depend on." He added that 16 years after China first restricted rare earth exports, "Britain remains dangerously exposed".

The committee heard the bottleneck sits at processing rather than extraction. China dominates refining across seven categories of minerals, including refined lithium for electric vehicle batteries and the rare earths used in the fuselage and wings of military aircraft to withstand temperature extremes. Witnesses told MPs that lithium demand would rise 45-fold between 2024 and 2030, and demand for rare earths in permanent magnets, used in fighter jets and other equipment, 16-fold over the same period.

The report cites China's willingness to cut supplies, which it did in 2025, and separate restrictions on legacy chips imposed during a row over Dutch intervention in the Chinese-owned firm Nexperia, which left the European car industry "days away" from stoppages last October, according to The Guardian. The inquiry was the committee's second criticism of government China policy in a week.

US President Donald Trump secured a one-year reprieve on Chinese global export restrictions on rare earths in October last year, extended to January 2027 after Xi Jinping's recent visit to Washington. The committee said that arrangement leaves the UK exposed to the state of US-China relations rather than to any agreement of its own.

Its preferred route is for Britain to work with G7 partners, other European countries and Indo-Pacific states to pool demand and bring in new suppliers. It also set out a 10-point plan covering domestic mining, refining and recycling, advice for businesses on cutting procurement from China, measures to unlock investment, and reform of planning and permitting rules that may block new mines.

The committee said a lack of government transparency frustrated its work. "Parliament has no visibility of the capabilities the government is seeking to protect, the vulnerabilities it has identified, or the projects it is backing to reduce risk," it said.

A government spokesperson rejected the charge, saying it is delivering £400m to increase domestic production and recycling and to build international partnerships. The strategy sets 2035 goals of meeting 10% of demand from domestic production and 20% from recycling, with no more than 60% of any critical mineral coming from a single country.