A major rare earths refining company, Pensana, which had intended since 2017 to set up processing at the Saltend Chemicals Park near Hull, has decided to invest in the US instead.
Pensana has been developing one of the largest rare earths mines in the world in Angola. Minerals such as cobalt, gallium, and lithium are needed for modern technology, and in particular for powerful magnets for wind turbines, EV motors, robotics and defence systems.
Essential
These essential products were due to be available to Britain by 2027. Pensana partly blames competition from China, which processes 90 per cent of the world’s rare earths.
‘Lack of government backing has forced the company into this move.’
But it is lack of backing from the British government that has forced the company into this move. Not for the first time Britain has lost its foothold on a piece of strategic industry.
Indifference
The Department for Business and Trade expressed no sense of what this loss means. It merely expressed “disappointment” at what was, after all, a “commercial decision”. This indifference to the needs of Britain is also reflected in the sanguine reaction of the chancellor, Rachel Reeves.
According to a Sky News report from Ed Conway (who has often written about critical minerals), Reeves was happy that the plant went to the US and pointed to the number of trade deals Britain has made.
Imports
Despite the promise of a new critical minerals strategy, and fine words on their importance for industry and security, the government seems unable to set out concrete action to achieve progress. Britain will now be forced to rely in large part on imports from the US, itself in a trade war with China.
Pensana will now benefit from a deal with the US government to ensure that all the magnets it produces are sold for a minimum price. The company also plans to work with US refiner ReElement to develop an “independent rare earth supply chain”.
Positive
The founder of Pensana, Paul Atherley, told Sky News he remains positive about Britain. That’s because he is also involved in planning a lithium refinery in Tees Valley in North East England. There must now be doubts as to whether that will ever get off the ground either.