The UK Strategy for Critical Minerals

As outlined in the first installment of our series, "Striking the Balance: Permitting Reforms for Mining and the Energy Transition", to achieve net zero emissions by 2050, mining development is essential for providing the critical minerals for components used in solar panels, wind power, and electric vehicles. In the UK, the Government published the UK's Critical Minerals Strategy, Resilience for the Future¹ in July 2022, and a further "refresh" in March 2023: Critical Minerals Refresh: Delivering Resilience in a Changing Global Environment². The strategy is for the UK to be a leading player in critical minerals by:

• Accelerating the UK's domestic capabilities
• Collaborating with international partners
• Enhancing international markets

A secure and resilient supply of critical minerals is vital to the UK's industrial strategy, both to capitalise on the opportunities that the transition to Net Zero brings and to attract further investment. For example, WBD recently advised Gravity on securing permission for its smart campus in the Southwest. It will be home to Tata’s Agratas gigafactory – the largest battery factory in the country - which is expected to contribute almost half of the projected battery manufacturing capacity required for the UK automotive sector by 2030.  

The UK strategy sets out the Government's intention to reduce barriers to domestic exploration and extraction of critical minerals. Minerals available for domestic production in the UK include lithium, tungsten, and tin.  Some years ago, Baseresult Holdings secured its Review of Mineral Permissions for the South Crofty tin mine in Cornwall, which was eventually granted permission in 2006. More recently, The Crown Estate granted rights to Cornish Lithium to explore within the geothermal waters off the coast of Cornwall. 

Minerals are a protected resource in the UK. Mineral Planning Authorities are responsible for designating Mineral Safeguarding Areas where vital mineral resources are present and for implementing policies that assure development will not sterilise the mineral resource. Because of this protected status, there is a tension between the need to safeguard minerals and the difficulty in securing permission to extract them. This is often compounded by legal challenges that delay the planning process. It can take many years to secure a permission and commence mining operations. The importance of mining for critical minerals raises the question of whether the UK's planning and permitting regime is fit for purpose. 

Lack of clear policy has led to an increase in challenges to major development in the UK over recent years. In the mining sector, there has been a highly publicised legal challenge to a new mining permission for the Cumbrian coal mine at Whitehaven. The development has been subject to opposition from environmental activists and local communities since the Secretary of State granted planning permission in December 2022. The challenge includes an argument that the environmental impact assessment must assess the greenhouse gas emissions that would inevitably be generated from downstream (scope 3) emissions. The challenge has been stayed pending judgment on the same point in R (on the application of Finch on behalf of Weald Action Group) v Surrey County Council and others [2022] which was heard by the Supreme Court in June 2023. 

Under the UK's critical minerals strategy, for a domestic supply to be realised, it must not only be viable for businesses but also developed in a way that works for communities and the environment. It is imperative that the UK planning system effectively regulates and limits harm to the environment and local communities, but development for critical minerals will inevitably have environmental and local impacts. Lack of clarity on when such development will be acceptable risks the investment needed in critical minerals. The Strategy expects the current programme of planning reforms to be sufficient to enable extraction of critical minerals, but this will not address the policy vacuum. If critical minerals development is going to come forward at the pace required in the UK, planning policy needs to be made clear at the national level. 

Supply of critical minerals can be secured by alternative means to mining, including recovery and recycling from end-of-life components. This, however, requires the development of commercial-scale capabilities in the UK as well as the supply chains to support it. Ultimately, the UK’s Critical Minerals Strategy notes that 'it is not possible (or even desirable) to onshore all aspects of critical mineral supply chains'. For this reason, the Strategy also outlines the opportunity for the UK to play a role in supporting domestic entities as they participate overseas in diversified responsible and transparent supply chains “as well as 'champion London as the world's capital of responsible finance for critical minerals'." As we note in our recent publication, 'What Role Will ESG Play on the Energy Transition Stage',  ESG is a driving influence in the energy transition. UK financial institutions are prioritizing ESG as a key investment metric. This will be a key feature for mining finance and metals trading in the years to come.

The scope of the UK strategy for critical minerals is broad, focussing on the three pillars of extraction, supply, and investment. We are hopeful that forthcoming policy interventions are sufficiently focused to drive change and break down barriers to optimize the role that the UK can play in this rapidly emerging global market.  

¹  Resilience for the Future: The UK’s Critical Minerals Strategy - GOV.UK (www.gov.uk)
²  Critical Minerals Refresh: Delivering Resilience in a Changing Global Environment (published 13 March 2023) - GOV.UK (www.gov.uk)