APPG Critical Minerals - The EU-UK Trade Deal & Critical Mineral Supply Chains Post-Brexit
On the 25th of January 2021, the Critical Minerals Association & All Party Parliamentary Group for Critical Minerals hosted a special event to discuss The EU-UK Trade Deal and Critical Minerals Supply Chains Post-Brexit. We were delighted to welcome:
Steve Double MP, Chair of the All Party Parliamentary Group for Critical Minerals
Guy Winter, Mining and Energy Partner, Fasken (London)
Guy Winter provided a legal review on the EU-UK trade agreement, its impact on the UK Critical Minerals sector and the opportunities it provides to deliver the UK Government's Industrial Strategy & Green Industrial Revolution.
Steve Double MP, Chair of the APPG for Critical Minerals
Last year the UK's Prime Minister outlined a ten-point plan for a Green Industrial Revolution and how the UK can build back better post-pandemic by putting the green economy at the center of its future industrial objectives.
The new green economy and society we are driving towards will need to be built on Critical Minerals. Electric Vehicles, Renewable Energy, Green Finance and protecting the environment are front and center of the Britain that the UK Government wants to build for the future.
Cornwall is home to the rejuvenation of mining and the Critical Mineral Industry, and also the selected location for the G7 leaders' summit where domestic critical minerals will be of high interest for the UK Government.
Guy Winter, Mining and Energy Partner at Fasken (London office)
Expertise in: Mining projects in Africa and North America and Renewable Energy/Climate Change projects in the UK. Advised Her Majesty's Government on investment in leading EV charging network operators and renewable energy legislation.
Critical Mineral Supply Chains are international value chains. It is vital to look at this issue from an international context and the fundamental challenges that global commodities markets face.
The UK cannot neglect the impact of Brexit and the TCA (Trade & Cooperation Agreement). The transitional exemption from EU tariffs for EVs and batteries means urgent action is required to adapt the UK supply chain
How can the UK build a battery supply chain to support vital gigafactories domestically? The four Rs are: Refining: Creating a stable pricing environment to allow UK industry to develop Recycling: Closing the batteries and magnet loop in the supply chain Research and Development (R&D) Regulation: Finding a competitive advantage in an ESG (Environmental and Social Governance) driven market
Building back better is crucial within the international agenda. There is a global hunger for renewed commitments to meet climate objectives which will have an impact on critical mineral supply chains.
The UK's new energy policy drives a huge commodity demand: commitment to phase out petrol and diesel cars by 2030 is estimated to generate a need for 5 times more copper for vehicles and 10 times more primary material per megawatt for offshore wind
The New Energy Trilemma = (Sustainability, Affordability and Security of Supply)
Shortening the supply chain will be crucial. Equally important will be the sourcing of where critical minerals will come from.
Affordability is a key concern. The UK will not be able to compete with expensive supply chains. Another dimension on affordability in critical mineral supply chains is the current distorted state of the market because of the current massive imbalance in production and processing between Asia and Europe. How do we avoid getting caught in the bottleneck of price squeezing which will make the UK market uncompetitive against international rivals?
How do we ensure access to critical minerals and the role they play in the supply chain?
There are structural supply issues with the narrowness of the critical minerals market and international competition to build gigafactories placing pressure on international supply chains
The Critical Minerals Sector is a key part of a new energy supply chain with opportunities and challenges for the UK
The objective and focus needs to be on the entire industrial value chain and not just the Critical Minerals Market
The New Energy Trilemma (Sustainability, Affordability and Security of Supply) and severe market distortions will require temporary state intervention
Structural deficits in supply of Critical Minerals mean that price and supply volatility during the term of the TCA is inevitable
Brexit possess challenges but has solutions: The UK will need to shorten its supply chain, engage in multilateral cooperation, innovate and set standards, by drawing from existing UK strengths. Positioning in the supply chain for TCA2 review is vital
Event Summary by Jamil Hijazi