The Critical Minerals Association welcomes the UK’s first ever Critical Minerals Strategy, published on the 22nd July 2022 and congratulates the teams in UK Government working for tirelessly behind the scenes to ensure that considerations from stakeholders across the supply chain have been taken into account.
In the introduction, the former Secretary of State for Business, Energy and Industrial Strategy, The Rt Hon Kwasi Kwarteng states: ‘This government is taking action to ensure we remain in the game.’
The risk of the UK falling behind in the global race to secure responsible sources of critical minerals is ever present. It is promising to see that the UK Government is starting to recognise the risks of critical mineral supply chain shocks, but the release of a strategy does not mean that the country can be complacent – effective delivery of the critical minerals strategy remains an urgent priority.
As outlined in the CMA’s 2022 ESG paper – Breaking down Barriers to Responsible Sourcing of Critical Minerals, other governments, notably the USA, Australia, Canada and China are moving at speed to secure their nations' critical minerals needs.
The UK’s critical minerals strategy covers a wide breadth of topics at a high level – from accelerating the UK’s domestic capabilities to enhancing international markets. The next level of detail on how the UK will deliver on its commitments will be crucial to ensure that the UK does remain in the game.
The CMA commends the government’s commitments in a number of areas, notably the critical minerals unit, collation of geoscientific data, inclusion of critical minerals in the UK’s Green Taxonomy, mining education in the UK, and the recognition of the risk of poor ESG practices causing an uneven playing field for responsible producers.
Critical Minerals Unit
The Critical Minerals Association has called for the UK Government to develop a Mining Agency/ Coordinating body to provide a single point of contact in government for stakeholders across critical mineral supply chains in four of its published papers.
The CMA is pleased to see that the UK Government has taken this on board, and that it will ‘establish a dedicated Critical Minerals Unit to act as government’s single point of contact with the critical minerals sector…and to support the objectives of the strategy and the needs of the sector.’
The Government’s Critical Minerals Unit should be a significant first step in supporting companies (mineral extraction, midstream, manufacturing) to navigate the complexities of cross-whitehall departmental priorities (as well as decisionmakers across local, regional, and devolved administrations), and can provide a focal point for government departments to come together with a common goal. This would be an opportunity to join up the multitude of stakeholders in government working across critical mineral supply chains to support UK companies. Greater join up could also help to avoid future conflicts in government policy, such as the Treasury’s Red Diesel rebate removal in 2021, which jeopardises UK domestic capabilities for critical mineral extraction, or the EU’s simultaneous inclusion of lithium on its critical raw materials list, and subsequent classification of lithium chemicals as hazardous.
Geological datasets in the UK are fundamental to demonstrate the UK’s mineral prospectivity, particularly to accelerate its domestic capabilities in critical mineral supply chains. Many other countries, including Australia and the Republic of Ireland, develop geological datasets to encourage operators and investors to invest and build extraction industries on their shores. Critical mineral exploration and extraction creates employment, economic growth and export potential.
The CMA is pleased to hear that government will ‘begin a national-scale assessment of the critical minerals within the UK’ and will ‘collate geoscientific data and identify target areas of potential’ by March 2023.
The UK Government could also require companies to submit drill hole results, core samples and other geological data collected during their operations to the BGS, once these operations close and the information is no longer commercially sensitive. The publicly available data would attract more investment and exploration into the UK. BGS datasets are also usually undigitised and these should be modernized and digitalized. The aforementioned Critical Minerals Unit could also look at how the government is joining up geological data from the BGS, Land Registry, Coal Authority, Geospatial Commission.
The national-scale assessment of critical minerals in the UK should take into consideration industry input and design, to ensure that the outcomes achieve the objectives of identifying critical mineral exploration potential and lead to industry development and job creation. The Critical Minerals Association represents seven UK critical mineral exploration companies and has a wealth of expertise in geoscientific data collection, and welcomes government and BGS engagement on this important piece of work.
Rebuild our skills in mining and minerals
The CMA welcomes the government’s announcement: ‘we will train the next generation of miners, geologists, engineers and beyond,’ which follows from the CMA’s ‘A Talent Pipeline’ paper's recommendations for government to ‘Promote and incentivise provision of science, technology, engineering, mathematics (STEM) and geoscience-based courses in secondary, technical and tertiary education sectors to create a talent pipeline for a growing critical minerals industry and support the Green Energy Transition.’
Without sufficient numbers of highly skilled professionals across critical mineral supply chains, countries will struggle to develop the critical supply chains needed. The CMA and its partner organisations represent a wealth of enthusiasm and knowledge around building a talent pipeline in geoscience, metallurgy, engineering, and welcomes government engagement in developing their plans. We hope that the Department for Education will be fully engaged in integrating these important topics into their work and the curriculum.
The delivery of the Critical Minerals strategy should take into consideration that the modern mining law of many countries promotes local beneficiation and localisation of employment and procurement. Requirements to employ and train locals are conditions of mining licences and minerals agreements in many countries. Such conditions are regularly audited and are now being reported through EITI. As the UK looks to source critical minerals overseas, it should bear in mind that the push towards ‘local employment’ may mean that young people trained in the UK are less able to get experience at mines in other parts of the world than they were in the past.
Perception and engagement of the critical minerals industries is a significant challenge that cuts across all aspects of supply chain development. The government could take an active communications role in dispelling misperceptions and generalisations, and help to highlight the nuances and importance of the sector for society, levelling up, and wider government ambitions.
Boosting ESG Internationally
The CMA is delighted that the importance of environmental, social, governance (ESG) is recognised by UK government and that the CMA's 2021 ESG paper ‘A Blueprint for Responsible Sourcing of Critical Minerals’ is referenced in the UK’s critical minerals strategy.
The CMA’s 2021 ESG paper recommended that the UK ‘Actively promote and influence multilateral discussions on establishing a global approach to ESG in critical minerals supply chains, leveraging the UK’s vast diplomatic network, financial markets and other international relationships.’ and highlighted that ‘Global Britain’ offers a platform to lead in the renewable energy transition and set an example for responsible sourcing in the international critical minerals value chain.’
It is promising to see that the strategy seeks to ‘Champion London as the world’s capital of responsible finance for critical minerals’ and that ‘The UK will use its wide-ranging membership of international forums to explore how we can work with partners to improve existing global ESG standards.’
The CMA’s 2022 ESG paper highlights the risk of responsible companies being disadvantaged on cost globally, and is pleased that the UK has acknowledged this, stating: ‘We want to level the playing field for responsible UK businesses operating overseas, who bear the extra costs of doing things the right way while others do not.’
Another area in which the UK is demonstrating leadership is in its Green Taxonomy. The CMA’s 2022 ESG paper advised that the UK’s taxonomy on critical minerals, mineral extraction, and processing should be developed. UK Government will soon be ‘consulting on technical screening criteria, and exploring how the importance of critical minerals to renewable energy technologies, in particular, could be reflected in the UK Green Taxonomy’. The CMA's ESG working group is formed of many ESG professionals who would be keen to advise in the development of this technical screening criteria.
We are pleased that the government will ‘promote innovative techniques to help UK companies trace where minerals are from.’ As our ESG paper states, the ability to verify the origin of input materials independently and scientifically is a critical part of supporting key ESG claims and compliance and must be done independently. This helps to mitigate the risk of ‘greenwashing,’ and it is important that Government supports LCAs/ Traceability and Provenance technologies for transparent supply chains.
Challenges & Opportunities
A number of challenges remain with regards to critical minerals and UK supply.
The UK Government states: ‘We want to create an enabling environment for companies to develop critical mineral capabilities in UK.’ However, there is little recognition of the barriers to developing straightforward processes for new industry, particularly given the outdated nature of the UK’s minerals legislation and difficulties relating to mineral rights, and planning and permitting. There is no mention of the importance of the existing EIS and SEIS tax relief schemes which could be linked more directly to critical mineral exploration. These issues cut across multiple industries and will require cross government support, and cross-sectoral join up.
Certain minerals that are deemed critical on other lists globally are not featured in the UK’s critical minerals list, such as copper, zinc, fluorspar while key battery metals nickel and manganese only feature on the UK’s ‘watch list.’ There is also no differentiation between the different rare earth elements, some of which are more important than others.
The UK’s Critical Minerals Strategy also presents great opportunities for UK critical mineral supply chains, such as the proposed critical minerals R&D blueprint, which the CMA hopes will help translate research into rapid industry progress. There will also be key opportunities in developing circular economy practices through regulatory changes, developing a UK midstream and in expanding financial support to the projects that can help the UK develop responsible critical mineral supply chains.
The Critical Minerals Association looks forward to supporting with the delivery of the UK’s Critical Minerals Strategy, and in providing its collective expertise to assist the UK Government in achieving its aims.
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Article by Kirsty Benham, Co-Founder, Critical Minerals Association