Chris Seeks Assurances On The Supply of Critical Minerals to the UK
Q70 Sir Christopher Chope: May I apologise first of all for not being here earlier? I also serve on the Procedure Committee, and we had another meeting at the same time.
Can I ask about the hot topic of critical minerals, with the news that the United States and Ukraine may be close to signing an agreement in relation to some of Ukraine’s critical minerals? To what extent do you think the United Kingdom should accept the reality that we have to import critical minerals because we do not have substitutes or equivalents ourselves? If we have to import them, how can we best ensure security of supply?
Dr Hicks: There are a number of different approaches. The first one is working with other countries and understanding how we can best secure our supply chains. The UK has spoken a lot with Australia and other countries around the world that are mineral-rich. Those partnerships will be really important.
The second aspect to it is also making sure that we reduce our demand on critical raw materials, such as by investing in innovation. As Steve has mentioned, there are technologies out there that are still at the early stage but can reduce our demand on critical minerals, whether it is perovskite solar cells in the solar power sector or sodium ion batteries in the battery sector. That is innovation where we can be less dependent on imports, but it is also a huge commercial opportunity for the UK to go and develop those technologies. There are many countries out there who are also in the same situation as us and do not have access to natural resources.
The third aspect is the recycling piece and making sure that we can have that domestic pipeline. We are still always going to need imports—there is only so much that we will be able to provide through recycling—but bringing all of these different elements together is how we can help to secure our supply chains.
The last aspect is really raising awareness around this as a supply chain risk. This will affect many businesses, whether it is within the energy sector or other sectors. Anyone who uses electronics is dependent on critical minerals, so making sure that businesses understand that there might be risks there and that they need to factor that in in their own supply chains as well is a really important piece.
Q71 Sir Christopher Chope: You referred to the Australian memorandum of understanding. Is that really going to be sufficient?
Dr Hicks: That is something where I am less close to the detail, and it is something where the Government will have to keep maintaining that clarity of partnership and keep working together.
Q72 Sir Christopher Chope: We are closely allied to Australia—we are in the Five Eyes and all the rest of it—so we can probably trust the Australians, but we cannot really trust countries such as China, can we? How can we find alternative supply chains where the critical minerals are actually almost exclusively under the control of our potential enemies?
Dr Hicks: It comes back to that international partnership question and conversations with lots of different countries, including China, to secure our supply chains, but that longer-term question of having alternatives is where there is a real potential solution.
Q73 Chair: I am interested to hear, Pranesh, what your thoughts are on that question as well.
Pranesh Narayanan: We are actively doing research on this question at the moment, so I do not have too much to comment on aside from the fact that the memorandum of understanding is a start. It is not quite the full guarantee that the supply chain is secure. I can write back to the Committee once we have some more findings from our international research.
Chair: That would be very helpful.
Q74 Sir Christopher Chope: You referred earlier to steel. If steel makes up 80% of a wind turbine, and most of that steel is having to be imported, why are we not doing more to manufacture our own steel? It seems as though we are remarkably relaxed about that, considering how critical it is to our net zero ambitions.
Pranesh Narayanan: I would agree. Steel has been seen as a difficult sector because it is hard to decarbonise, and it is competing against incredibly low-cost competitors from places such as China. This is actually where a policy such as the carbon border adjustment mechanism could help quite a lot. It levels the playing field across our industry, which is investing in a cleaner way of producing steel versus industries in other countries producing very high-carbon content. That sort of measure would help.
Dr Hicks: The only point I would add is we have recommended that the Government carry out a capability study to understand where the steel sector has existing strengths that could support a pivot towards supplying more of these clean energy technologies, or where there is a challenge around the way the industry is set up here and the strength and capabilities it has, and whether there is a mismatch. The Government could go and find out more about that, to better understand how to support them.
Q75 Sir Christopher Chope: There may be circumstances in which it is more cost-effective for the United Kingdom, although it has the resources itself, to import. Would you accept that?
Dr Hicks: Yes, absolutely. There will always be a role for global supply chains in our clean energy sector. It is really that balance of understanding not only where there are opportunities for the UK, but where there are energy security questions, and we want to factor in greater resilience in the longer term.
Q76 Sir Christopher Chope: Could you give some specific examples?
Dr Hicks: I could give some in writing that might be more specific, if that is helpful.
Q77 Ms Billington: Can I just ask why you think none of these things that you are making suggestions about has been done before?
Dr Hicks: That is a very good question. If I knew, we would hopefully have solved it by now.
-ENDS-
