Britain’s Mineral Ambitions Suffer Setback

Britain’s hopes of becoming a major minerals superpower have suffered a significant setback after one of its leading companies, Pensana, abandoned plans to build a rare earths refinery near Hull. The refinery, which was expected to cost £250 million, would have processed rare earths used to make magnets for electric cars and wind turbines, creating 126 jobs and receiving millions in government funding.

Decision to Relocate to the US

Pensana has decided to scrap its plans in the UK and relocate its refining operations to the US. According to Pensana’s Chief Executive Officer, Paul Atherley, the decision was made after the Trump administration committed to buying rare earths from an American mine, Mountain Pass, at a guaranteed price. This move has reassessed the market, with Washington looking to make more deals at speed, leaving Europe and Britain behind.

Critical Mineral Geopolitics

The decision comes at a crucial time in critical mineral and geopolitics. China produces around 90% of all finished rare earth metals, essential for many technology, energy, and military products. Recently, Beijing imposed restrictions on rare earth exports, prompting Donald Trump to threaten China with further 100% tariffs. Pensana was seen as Britain’s answer to the periodic panic over the availability of rare earths.

Government Support and Promises

The Saltend Chemicals Park site was selected by the government to launch its critical minerals strategy in 2022. The then Minister of Economic Affairs and Energy, Kwasi Kwarteng, visited the official groundbreaking ceremony and promised a government grant to support the project. However, this grant was never received because Pensana never built its plant.

Impact on the UK Chemical Industry

The decision is a further blow to the UK chemical industry, which has faced a series of closures in recent months, including the closure of Vivergo, a biofuel refinery company based in the same chemical park. Producers warn that Britain’s record-breaking energy costs, higher than most other leading economies, are strangling the economy and triggering an exodus of businesses.

Alternative Projects and Future Prospects

Paul Atherley remains optimistic about another project he is involved in, bringing lithium refining to Teesside through another company, Tees Valley Lithium. However, he notes that rare earth processing is far more complex, energy-intensive, and expensive, making it unfeasible in the UK for now. The future of Britain’s mineral ambitions remains uncertain, with the country struggling to compete with other leading economies in the critical minerals market.