UK 'dangerously' exposed to China squeeze on critical minerals, MPs warn

UK demand for lithium alone will rise 45-fold between now and 2030, and MPs say Britain is "dangerously" dependent on China for the refined minerals that defence, renewable energy and AI technologies require. The business select committee's report, published after a parliamentary investigation, calls the dependency a strategic vulnerability for both the economy and national security.

The committee wants an urgent centralised policy and a new "critical minerals finance facility" to fund rare earth and other critical mineral mines. The facility would deploy grants, equity and debt to accelerate diversification away from Chinese supply.

What did the committee's chair say?

"Critical minerals are the alpha of the new economy," said Liam Byrne, the committee's chair. "We cannot rearm Britain, build AI or deliver net zero unless we secure the minerals these technologies depend on."

Byrne did not stop there. "Yet 16 years after China first weaponised its chokehold over rare earths, Britain remains dangerously exposed," he said.

That 16-year frame matters: China has restricted rare earth exports before, and MPs judge that more than a decade and a half of warnings have produced no adequate British response. It is the second time in a week that Byrne's committee has criticised the government's China policy.

Where is the bottleneck?

China holds a stranglehold not just on mining but on processing. Refined critical minerals go into everything from military jets to car-locking systems and consumer goods such as fridges and washing machines.

The committee heard that "the processing stage" was where the bottlenecks sit. China dominates the refining of seven categories of minerals, including:

• Refined lithium, needed for electric vehicles
• Rare earths used in the fuselage and wings of military aircraft, where they help withstand temperature extremes
• Materials for permanent magnets used in military jets and other applications

Demand for those magnet-grade rare earths will rise 16-fold by 2030 — the same period in which Britain is trying to rebuild its military capabilities. The two curves, rising demand and concentrated supply, are the core of the committee's warning.

Has China already used this leverage?

Yes, and recently. China demonstrated in 2025 that it can suddenly turn off rare earth supplies, the committee found.

Separate restrictions on legacy chips, imposed after a row over a Dutch intervention in the China-owned Nexperia, left the European car industry "days away" from stoppages last October. The precedent is not hypothetical; the damage was nearly immediate.

The EU, the US and other countries face the same risk of rare earth supplies being cut off. The committee's verdict is that the UK is simply not putting enough effort into finding alternative supplies.

Can the US reprieve protect Britain?

Only partially, and on borrowed time. Donald Trump secured a one-year reprieve on China's global rare earth export restrictions from Xi Jinping in October last year. Xi's recent visit to Washington extended it to January 2027.

The report's caveat is blunt: the reprieve means the UK sits at the mercy of US-China relations. A supply arrangement negotiated between Washington and Beijing is not a British strategy, and it expires on a date London does not control.

The committee calls the most "realistic" solution close coordination with G7 partners, the rest of Europe and Indo-Pacific countries to "aggregate demand" and bring new suppliers into the market. In plain terms: Britain alone is too small a buyer to shift the market, but a coordinated bloc of buyers might be.

Why does Parliament say it is flying blind?

The committee said its investigation was frustrated by the government's lack of transparency.

"Parliament has no visibility of the capabilities the government is seeking to protect, the vulnerabilities it has identified, or the projects it is backing to reduce risk," the report states.

That opacity extends to the committee's own scorecard. It has drawn up a 10-point plan covering:

• Identifying domestic mining, refining and recycling opportunities and their costs
• A strategy to encourage business to reduce procurement from China
• A plan to unlock investment
• An assessment of planning and permitting processes that may prove a barrier to mining

As things stand, the committee said it could not be confident the government could satisfy any of its 10 tests — not one. Its conclusion: "The UK requires new institutional and financial muscle."

What does the government say?

A government spokesperson denied the UK lacks a critical minerals strategy. The government is delivering £400 million "to ramp up domestic production and recycling" and to forge new international partnerships, the spokesperson said.

"Our strategy also sets clear goals for 2035, including meeting 10% of demand through domestic production and 20% through recycling, with no more than 60% of any critical minerals coming from any single country," the spokesperson added.

Read those 2035 targets against the 2030 demand curve. Lithium demand rises 45-fold by 2030; the government's targets mature five years later. Even if met in full, the 60% single-country cap still permits a majority of any one mineral to come from one supplier — the very concentration MPs flag as the danger. The gap between the committee's urgency and the strategy's timeline, not the existence of a strategy, is where this argument will be settled.