A parliamentary inquiry by the business select committee has concluded that the UK is dangerously dependent on China for the critical raw materials underpinning the military, renewable energy infrastructure and AI, and is pressing ministers for urgent action on the UK-China critical minerals problem.

China's grip on refining and supply

The committee heard that China dominates the refining of seven categories of minerals, among them the refined lithium needed for electric vehicles and rare earths used in military aircraft fuselages and wings. That dominance can be turned off abruptly: MPs found China capable of suddenly halting rare earth supplies, as it did in 2025, creating a strategic vulnerability for the UK economy and national security.

• •Demand for lithium alone would increase 45-fold between now and 2030, the committee was told.
• •Rare earths used in permanent magnets for military jets would see demand rise 16-fold over the same period as Britain rebuilds its military capabilities.
• •Separate restrictions on legacy chips, following a Dutch intervention row over the China-owned Nexperia, left the European car industry days away from stoppages last October.

Byrne: Britain 'dangerously exposed'

Committee chair Liam Byrne framed the minerals as the foundation of the new economy, saying Britain cannot rearm, build AI or deliver net zero without securing them.

That warning of prolonged exposure came alongside the committee's view that the UK is not putting enough effort into finding alternative supplies, a risk shared by the EU, the US and others facing the same cut-off.

The committee's 10-point fix

MPs called for an urgent centralised policy and the creation of a critical minerals finance facility to fund rare earth and other critical mineral mines using grants, equity and debt. They saw the most realistic solution as working with G7 partners, Europe and Indo-Pacific countries to aggregate demand and bring in new suppliers.

The committee's 10-point plan includes:

• •identifying domestic mining, refining and recycling opportunities and their costs
• •a strategy to reduce procurement from China
• •an investment plan
• •assessing planning barriers

Even so, the committee said it could not be confident the government could satisfy any of its 10 tests, concluding the UK requires new institutional and financial muscle. It also complained its investigation was frustrated by a lack of government transparency, with parliament having no visibility of the capabilities being protected, the vulnerabilities or the backed projects.

The government's response and the US-China reprieve

A government spokesperson denied lacking a critical minerals strategy, saying it was delivering £400m to ramp up domestic production and recycling and forge international partnerships. The critical minerals strategy sets 2035 goals of meeting 10% of demand through domestic production and 20% through recycling, with no more than 60% of any critical mineral drawn from any single country. It was the second time in a week that the government's China policy had been criticised by Byrne's committee.

Donald Trump secured a one-year reprieve on global rare earth export restrictions from Xi Jinping, extended to January 2027 after the Chinese president's visit to Washington. The report warns that reprieve leaves the UK at the mercy of US-China relations until then.