The UK is at significant risk from an overreliance on China for critical raw materials essential to defence systems, renewable energy infrastructure and artificial intelligence, a parliamentary inquiry has concluded.
In a report by the business select committee, MPs warned that the current pattern of supply leaves the country vulnerable and called for urgent government action to reduce dependence on a single supplier.
Call for a centralised strategy and finance vehicle
The committee urged the government to establish a centralised policy framework to coordinate efforts across departments and to underwrite a programme of diversification. As part of that approach, MPs recommended creating a "critical minerals finance facility" to provide capital for mining projects and associated processing capacity.
The proposed facility would support the development of rare earth and other critical mineral mines by deploying a mix of grants, equity and debt, the committee said, with the aim of accelerating a programme to diversify supply chains away from dominant providers.
Risks to defence, net zero and AI
The report highlighted that shortfalls or disruptions in critical minerals would not only affect the defence sector — where specialized materials are needed for weapons and communications systems — but could also hinder the UK’s ability to deliver net zero targets and to build advanced computing and AI infrastructure.
MPs framed the recommendations as urgent, saying a more coordinated industrial and financial response is necessary to secure supplies and protect national security, economic resilience and the transition to low-carbon energy.
Next steps
The committee’s proposals focus on bringing together policy, finance and industrial planning to stimulate domestic and allied production of essential minerals. The report did not set out specific implementation timetables, leaving the onus on ministers to respond to the recommendations and to outline how the proposed finance facility and centralised policy would be established and funded.