UK found to be ‘dangerously’ reliant on China for critical minerals needed for defence and AI

A parliamentary investigation has revealed that the UK is dangerously reliant on China for critical raw materials essential for the military, renewable energy infrastructure, and artificial intelligence (AI). The Business Select Committee, chaired by Liam Byrne, called for urgent centralised policy and the establishment of a "critical minerals finance facility" to fund rare earth and other critical mineral mines.

The committee emphasized that critical minerals are the "alpha of the new economy," as securing these resources is vital for Britain to arm its forces, build AI capabilities, and achieve net zero emissions.

China dominates the refining of seven categories of minerals, including lithium for electric vehicles and rare earths used in military aircraft. Demand for lithium alone is expected to surge 45-fold between now and 2030, leaving the UK exposed to high-risk dependencies on China. Temporary export restrictions imposed on legacy chips by the US in 2025 further highlighted the vulnerability of the European car industry to sudden cuts in rare earth supplies.

The committee suggested that the most realistic solution would be for the UK to collaborate with G7 partners, the rest of Europe, and Indo-Pacific countries to aggregate demand and introduce new suppliers. However, the investigation was hampered by a lack of transparency from the government regarding the capabilities, vulnerabilities, and projects aimed at reducing dependency risks.

The committee drafted a 10-point plan, which includes identifying domestic mining, refining, and recycling opportunities, encouraging businesses to reduce procurement from China, unlocking investment, and assessing planning and permitting processes that may hinder mining efforts. The committee concluded that the UK needs new institutional and financial resources to address the issue.