As global trade tensions rise, the UK faces increasing pressure to rethink its reliance on China for critical minerals. These minerals, essential for everything from smartphones to wind turbines, are vital to the UK’s green energy transition, national security, and technology sectors. A new report by the influential Labour Together thinktank calls on the UK government to urgently reduce its dependence on China and diversify its supply chains by partnering with other countries.
Why the UK’s Dependence on China Is a Risk
Critical minerals, such as rare earth metals, are key ingredients in many high-tech products, including mobile phones, electric vehicles, and military technology. Unfortunately, China controls a dominant share of the global supply of these minerals. In fact, China is responsible for about 70% of the world’s rare earth mineral extraction and dominates their processing and refining. This makes the UK—and many other countries—vulnerable to potential supply disruptions.
This situation has become even more critical amid escalating trade tensions. For example, China recently imposed an export ban on key minerals like antimony, gallium, and germanium—all essential for the US’s technology and military industries. While the UK was not directly impacted, the warning signs are clear: if the UK continues to rely on China for these minerals, it could find itself at a disadvantage, particularly as China strengthens its hold on supply chains.
Labour Together’s Call for Action
In the new report, Labour Together urges the UK government to “de-risk” its mineral supply chains by diversifying partnerships with other countries and promoting responsible mining practices. The thinktank emphasizes that China’s dominance creates significant vulnerabilities, particularly in the aftermath of Brexit. Labour Together argues that it’s time for the UK to think strategically about the future of its critical mineral supply chains and take action to mitigate risks.
“China’s hold over critical minerals puts us at risk, and the UK needs to act quickly to reduce its dependence,” said Felix Cazalet, a policy fellow at Labour Together and author of the report. “It’s crucial for the UK to work with like-minded countries to secure a more resilient and diversified supply of minerals.”
The Green Energy Transition and National Security
One of the driving factors behind the growing concern about critical minerals is the UK’s green energy transition. Minerals like neodymium—used in wind turbines—are essential for renewable energy technologies. China currently manufactures around 90% of the global supply of these magnets, making the UK and other countries heavily reliant on China’s supply chain. With the UK’s net-zero emissions goal in sight, securing a stable supply of critical minerals has never been more important.
However, these minerals aren’t just critical for green technologies. They are also essential for the UK’s national security. For example, neodymium magnets are used in missiles, making them vital for defense capabilities. The UK’s over-reliance on China for these materials could leave it vulnerable to geopolitical shifts that impact the global supply chain.
What the UK Government Needs to Do
The UK government is expected to release a new critical minerals strategy in spring 2025. Labour Together has called for this strategy to focus on diversification—ensuring that the UK does not remain overly dependent on China for these vital materials. They also recommend that the government work closely with the EU, Canada, Australia, and other democratic nations to create a more resilient supply chain.
A Pragmatic Approach: Engaging with China While Diversifying
While the report stresses the need to reduce reliance on China, it also acknowledges the importance of engaging with China on mining standards and environmental practices. China’s significant role in the global minerals market means that completely cutting ties would be unrealistic and counterproductive. Instead, the report suggests that the UK should work with China on issues like environmental sustainability and labor practices in mining.
This idea is supported by Ruby Osman, a China policy advisor at the Tony Blair Institute. Osman suggests that the UK must balance diversification with realistic engagement. “China has built its dominance over decades, and the UK has only recently begun to address the issue,” she explains. “We need to engage strategically and work with China where possible, but also ensure that we are not overly reliant on them.”
Lessons from the Past: The 2010 China-Japan Dispute
The report also highlights the 2010 China-Japan rare earth dispute as a key lesson. After a territorial dispute, China imposed an export ban on rare earth elements to Japan, causing significant disruption to Japan’s technology industries. This event underscored how vulnerable countries can be when they rely too heavily on one supplier. The UK must learn from this and work to de-risk its critical mineral supply chains before it’s too late.
Labour Together’s Critique of the Current Government Strategy
The report also criticizes the UK government’s current approach to critical minerals. In 2022, the Conservative government published a critical minerals strategy, but Labour Together argues that the strategy is too broad and lacks urgency. According to Alicia Kearns, the former chair of the Foreign Affairs Committee, the strategy failed to adequately address the scale of the risks involved. “For three decades, governments have been asleep at the wheel,” Kearns said.
Labour Together echoes this sentiment, calling the Tory approach “too slow, too general, and given too little support.” The thinktank insists that the next government must adopt a more targeted, proactive approach that addresses the key risks associated with the concentration of mineral production in countries like China.
Moving Forward: The UK’s Opportunity
The UK government’s upcoming critical minerals strategy represents an opportunity to secure the materials needed for growth, security, and the green transition. By working closely with international partners and ensuring that supply chains are diversified, the UK can reduce its dependence on China while also safeguarding its economic and security interests.
“Now is the time for action,” Cazalet concludes. “The new strategy should focus on diversifying supply chains, building stronger international partnerships, and increasing investment in resilient and responsible mining practices.”
Conclusion: A Critical Moment for the UK’s Future
As the UK looks toward the future, its relationship with China and its access to critical minerals will be pivotal. The Labour Together report offers a timely warning about the dangers of over-reliance on a single supplier and stresses the need for a more diversified and resilient supply chain. The government must act quickly and strategically to ensure that the UK is not left vulnerable in the years ahead.
