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UK All-Party Parliamentary Group for Critical Minerals - Lithium Roundtable

Last Monday on 17 May, the All-Party Parliamentary Group (APPG) on Critical Minerals hosted a roundtable discussion on lithium at the Houses of Parliament. The Vice Chair of the APPG, the Rt. Hon Baroness Northover, chaired the roundtable, asking for insights from industry about what the UK Government can do to ensure security of lithium supply for the net-zero transition.

Speaking at the roundtable was John Walker, CEO of Tees Valley Lithium; Jeff Townsend, co-founder of the Critical Minerals Association United Kingdom (CMA UK); Richard Taylor, CEO of Green Lithium; Roderick Smith, Chairman of British Lithium; Chris Wyres, CEO of Evove; and Stewart Dickson, CEO of Weardale Lithium. Jeremy Wrathall, CEO of Cornish Lithium, also provided a written response to the questions put to panellists.

Baroness Northover commenced the event with an opening speech, detailing how action on critical minerals is “desperately required” but now “higher on the agenda of the UK Government” thanks to efforts from the CMA. She lauded and encouraged the “pushing and shoving” that UK industry have done in the past few years to bring the issue to the attention of UK Government.

Discussions started around estimating the demand of lithium for decarbonisation, and the need for the UK to build its own gigafactories to assemble materials into batteries. A concern repeatedly brought up by speakers was that the UK is running out of time to lead the world in electric vehicle (EV) production. Due to lengthy and arduous planning and permitting processes in the UK, “we are going to be in a lithium deficit environment for ten to fifteen years” said John Walker, CEO of Tees Valley Lithium. Roderick Smith, Chairman of British Lithium, expressed similar sentiments: “My worry is that we may be too late.”

Lithium is required to manufacture the lithium-ion batteries that power EVs. Without domestic battery manufacturing capabilities, the UK will always rely on imports to ensure the success of its net-zero targets. This is a reliance the UK cannot allow, given the importance of the energy transition for future generations and the health of the planet. This risk is greatly intensified by the fact that the EV battery value chain is monopolised by China. With rising geopolitical tensions in recent years, including the US-China trade war, Russia’s invasion of Ukraine, and concerns over Taiwan, the UK and its allies must aim to develop alternative supply chains or run the risk of depending on insecure supply to reach net zero.

Another major concern expressed by industry members was the lack of available capital. UK mining companies rarely receive interest or funding from private finance, and Government funds don’t provide enough financing to truly aid projects, either. Richard Taylor, the founding Director of Green Lithium, shared his frustration over the fact that private investors often ask UK companies why they don’t consider moving operations to the US or EU, where conditions for developing domestic critical mineral projects are far better. The ambition, scope, and generosity of the US Inflation Reduction Act has accelerated progress in domestic development, and its subsidies are now even being offered to overseas firms in Germany and Japan that are dedicated to developing alternative supply chains.

Members also admitted that Government funds would have to increase by a factor of 10 to truly impact the domestic landscape and propel the UK onto the world stage as a producer and manufacturer of lithium. Otherwise, current monopolies in the value chain will persist and security of supply will remain at risk.

Moreover, the roundtable considered the implications of Brexit for the UK’s mining industry. The European Union has shown promising action on critical minerals, having released their Critical Raw Materials Act last month. The Act sets out ambitious targets for the EU to diversify and secure their supply by onshoring extractive, manufacturing, and recycling capacities, dedicating billions of dollars to the cause. The UK’s allies, Australia and Canada, have also introduced similar measures in the past year to incentivise and grow domestic industry.

“At the moment we are totally irrelevant”, one member admitted. Another CMA member in the audience, Guy Winter, a Partner at law firm Fasken, diagnosed what he called a “Brexit hangover”: “The EU is our biggest trade partner, and that hasn’t changed since the UK voted in 2016.” EU companies have been fantastic at lobbying the interests of critical minerals and raising awareness about their importance for the energy transition to the highest level of decision-makers in the EU. Their efforts to develop an alternative supply chain of critical minerals are inspiring. But the UK can no longer ‘knock on the door of Brussels’ for collaboration because Brexit has severed a historical bond of trust with the bloc.

CMA co-founder Jeff Townsend concluded the roundtable talks by summarising members’ concerns. Thank you to the Rt Hon. Baroness Northover for chairing the event. Lithium and other critical minerals have the potential to not only ensure the energy transition but bring thousands of the jobs to the country and boost the economy. Thank you also to those who spoke and attended the roundtable.

This article was written by Eileen Maes, Public Affairs & Communications Associate.

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