Move over China! £125m Yorkshire project to break Beijing’s rare earths stranglehold

Pensana is due to start building a rare earth metals processing plant at the Port of Hull this summer with the aim of seeing it up and running by 2023. Rare earth metals are used in high-tech goods such as smartphones and low carbon technologies including wind turbines and electric cars, though countries in the West depend on China for 90 percent of supplies.

MPs and security officials say that means Britain and its allies are potentially vulnerable with Beijing flexing its muscles more on the international stage.

Pensana’s minerals separation facility is to be built at the Saltend Chemicals Plant with the aim of producing enough refined metals to meet five percent of global demand.

Supporters say it has the potential of becoming one of the world’s largest rare earth metals processing plants.

Pensana chairman, Paul Atherly, says the project will show how the West could break a reliance on Chinese exports.

He told The Telegraph: “We’re on the ground and we’ve got teams looking ready to go. The UK could be a multi-billion dollar, world-class producer of these rare metals and we want to establish the supply chain.

“It is incredibly exciting to be bringing back this kind of manufacturing to the UK, to be tapping into a chemical engineering DNA that exists in the Humber, in the northeast of England.”

Less Common Metals (LCM), a company that specialises in rare earth elements, argues that there is a need for a stable, secure, competitive supply chain independent of Chinese government control.

It says without it, economies outside China will continue to struggle to maintain their own manufacturing capabilities and the jobs which depend on rare earth magnets.

READ MORE ON FEARS COVID CASES ARE THREE TIMES HIGHER

In December, China tightened its hold on the market by merging three state enterprises, Aluminum Corporation of China, China Minmetals Corporation and Ganzhou Rare Earth Group.

The new supergroup called China Rare Earths, has been likened to an “aircraft carrier”. Analysts warn it will give Beijing even more influence over overpricing.

State media in China has also hinted that Beijing’s stranglehold could be weaponised during trade war flare-ups between China and the US.

On Friday, bipartisan legislation was introduced in the US Senate which would force defence contractors to stop buying rare earths from China by 2026.

DON’T MISS:
Where are Virginia Giuffre’s parents? [REPORT] 
Cancer symptoms: The ‘very important’ sign when you ‘bend down’ [REVEALED]
Bargain Hunt’s Natasha Raskin Sharp opens up on ‘missing’ TV [REVEALED]

Instead the Pentagon would create a permanent stockpile of the strategic minerals.

The bill is the latest piece of legislation as the US seeks to end China’s dominance over the sector and revive the country’s own rare earths production.

A feasibility report published by LCM in November says Britain can revive its own production of the high-powered magnets needed for electric vehicles but it should mimic China’s centralised strategy to make it viable.

A magnet factory would help the UK meet its goal of banning petrol and diesel cars by 2030 and pushing carbon emissions to net zero by 2050.

Among its recommendations to help establish a UK supply chain, LCM urged the Government to help select sites for facilities in Britain, ensure key export markets are free of trade barriers and ensure access to low-carbon, competitively priced electricity.

Chief Executive Ian Higgins told Reuters: “We would say that the business model has to be like the Chinese, all joined up, ideally everything under the same roof if possible.”

He added that a British magnet factory could be built by 2024 and eventually produce 2,000 tonnes a year of rare earth magnets, enough to supply about one million electric vehicles.

Mr Atherly told The Telegraph Pensana would begin by refining minerals shipped from a mine in Longonjo, Angola, but that he hopes to gain more customers from around the world.

He identified Europe, the US, Japan and South Korea as potential partners. Europe imports about 16,000 tonnes of rare earth permanent magnets from China annually, representing about 98 percent of the market, according to an EU-backed report.

Mr Atherly told The Telegraph that he believes the need for the West to build up these supply chains is not just related to security.

He explained China has its own environmental, technological and defence goals that it hopes to meet in the future which require using up vast amounts of the country’s own resources.

He said: “They’re spending $11 trillion on exactly the same thing that the rest of the world is spending money on and they’re going to need all the magnets they produce. The markets have woken up to that.”

“We are going back to what the UK used to be. We used to import raw materials from around the world, whether that was agricultural products, metal or cotton, and turn them into value-added products. Now we are doing it again.”