The UK Government has established a partnership with Saudi Arabia to strengthen the country’s critical minerals supply chains.
UK Business Secretary, Grant Shapps, made the agreement at the Future Minerals Forum in Riyadh. The collaboration reinforces the UK’s ambitions to build robust supply chains for critical minerals that will be essential for expediting the green transition and achieving carbon neutrality.
The development builds on targets outlined in the UK’s Critical Minerals Strategy, which aims to work at home, abroad, and through markets to ensure supplies of these essential materials. This development is believed to be the first of many partnerships between the UK and other countries due to the UK’s insufficient domestic resources.
Grant Shapps commented: “Critical minerals underpin the things that make everyday life and work possible, from our cars to our phones. It is essential that we do all we can to ensure resilient supplies of these important resources.”
Why are critical minerals so important?
Critical minerals are an essential ingredient in a range of technologies that will help to decarbonise the planet and help the UK achieve its climate goals. The extensive list of critical minerals the UK targets includes lithium, nickel, and graphite, to name a few, which are used to manufacture electric vehicles (EVs), wind turbines, consumer electronics, and more.
However, global supply chains and markets are extremely volatile, and the UK’s limited resources make the country’s jobs and industries vulnerable to market shocks and geopolitical events. In contrast, Saudi Arabia has one of the largest untapped sources of critical minerals in the global market, estimated to be worth around $1.3 trillion.
Shapps added: “The impact of Putin’s illegal war in Ukraine on energy prices has shown us all how important international supply chains are to our economy and why we can never be too reliant on any one nation. That’s why it’s so key that we work with partners like Saudi Arabia to ensure our supply chains are diverse and robust, supporting jobs and prosperity across the UK in the decades to come.”
What will the partnership involve?
The collaboration opens opportunities for the UK and Saudi Arabia to work together on diversifying sources of critical minerals via Saudi investment in the UK’s world-leading manufacturing and mining finance sectors, in addition to new prospects for UK mining companies to do business in Saudi Arabia.
This will be essential for the UK to diversify its assets so that it is not overly reliant on any one country, as the critical minerals industry is currently dominated by China. The UK and Saudi Arabia will explore developing new sources and build on the importance of rigorous transparency and environmental standards to mitigate risks to business and encourage investment.