2021-11-09-未知机构-英国和中国_关键矿产（英）_18页_591kb

The UK and China: Critical Minerals Summary

Core Content

Critical minerals are essential for the UK's transition to a net-zero economy and are vital to modern technologies, including electric vehicles, wind turbines, and energy storage systems. These minerals are not only crucial for clean energy but also for national defense and other high-tech industries. However, the UK's reliance on China for midstream processing and downstream manufacturing of critical minerals presents significant strategic and ethical risks.

Main Points

• Critical Minerals Definition: Critical minerals are essential for economic and national security, with vulnerable supply chains. They are used in various industries, including telecommunications, defense, and renewable energy.
• Global Demand Surge: The World Bank estimates that global production of critical minerals may need to increase by nearly 500% by 2050 to meet the demand for clean energy technologies. Battery technologies, especially lithium, nickel, and cobalt, are expected to dominate this demand.
• UK's Net Zero Strategy: The UK's commitment to renewable energy and electric vehicles will significantly increase its demand for critical minerals. This includes offshore wind expansion, phasing out internal combustion vehicles, and investing in energy storage systems.
• China's Dominance: China controls up to 90% of the midstream processing of rare earths, with significant influence over graphite, vanadium, and cobalt. It is also a near-monopole in lithium battery cell manufacturing.
• Strategic and Environmental Risks: China's control over critical minerals supply chains raises concerns about strategic dependence and environmental degradation. The lack of transparency in supply chains and the use of low-cost, high-carbon methods contribute to ethical issues.
• Belt and Road Initiative: China's expansion of critical mineral supply chains through the Belt and Road Initiative includes investments in overseas mining and processing, further entrenching its global influence.
• State Backing in the West: The US, Japan, Australia, and the EU are all pursuing state-backed strategies to reduce dependence on China, including subsidies, grants, and investment in domestic and regional supply chains.
• UK's Limited Strategy: The UK has focused mainly on downstream investments, such as gigafactories and recycling plants, but has not developed a comprehensive strategy to secure critical minerals. This has left the UK vulnerable to supply disruptions and ethical concerns.
• Recent Developments: Chinese companies are acquiring critical mineral assets globally, including lithium mines in Argentina and rare earths processing projects in Australia. The UK's government support for Chinese firms, such as Envision AESC and BYD, further complicates its efforts to reduce dependence.
• Fragile Supply Chains: The concentration of production in China and its reliance on other countries for raw materials, such as Myanmar for dysprosium and terbium, makes the supply chain highly susceptible to geopolitical and environmental shocks.

Key Policy Options

• Diversification of Supply Chains: The UK needs to diversify its sources of critical minerals to reduce strategic dependence on China.
• Investment in Midstream Processing: Developing domestic midstream processing capabilities is crucial for long-term supply chain resilience.
• Ethical and Environmental Standards: The UK should push for more transparent and sustainable supply chains, particularly in light of ethical concerns linked to Chinese mining practices.
• Collaboration and Partnerships: The UK should explore partnerships with like-minded nations and invest in regional supply chain initiatives.
• Policy Reforms: A shift in the UK's Critical Minerals Strategy is necessary, moving away from a purely market-based approach to a more resilience-focused one.

Conclusion

The UK faces a growing challenge in securing its supply of critical minerals due to China's dominance in the midstream and downstream sectors. While the UK has made progress in downstream investments, it lacks a coherent strategy to ensure supply chain resilience and ethical sourcing. With global demand for critical minerals set to rise, the UK must act swiftly to mitigate risks and secure its position in the clean energy transition.