China supplies around 98% of the EU’s requirements for rare earth metals used to make batteries, smartphones and offshore wind turbines. Minerals are mined in many countries, but Beijing has invested in the infrastructure to process and export them around the world.
Former Bank of England governor Mark Carney warned the Lords committee in April that China had “considerably thought and taken many steps to secure the supply” of key materials.
He said: “There are issues with supply chain concentrations. A lot of the technology and production comes from China, so there is a lot of exposure to China, certainly in new solar. , and there are high concentrations of rare earths and minerals, as you are aware.
“In fact, global investment in these materials is very clearly insufficient for the scale of the transition required, not just in the UK but more broadly, so there are security of supply issues there that need to be addressed. resolved and reflected.
“Having reliable supply chains for these critical minerals should be a top priority for energy security, otherwise we won’t be able to build the sustainable platform we need to combine security and sustainability.”
The report says the government’s next strategy on critical minerals should assess supply chain vulnerabilities and determine how to minimize them.
The committee advised the government to initiate talks with the financial and industrial sectors to determine whether new supply chains could be built, how long it would take to provide alternatives to Chinese products and whether the abandonment of Chinese supplies would increase. the cost of renewable energy. .