【By Observer News, Chen Sijia】"The UK faces the risk of failing in the rare earth competition." According to the UK's Daily Telegraph on December 1st, the head of an Australian mineral exploration company warned that due to the continuous delay in investment in the rare earth industry by the UK government, the UK will find it difficult to build rare earth factories domestically, and may eventually lose in the so-called "rare earth race" to China and the US.

The UK government released a critical minerals strategy in November, which will provide £50 million in funding to ensure that the UK reduces its reliance on foreign suppliers by 2035. Currently, the production of critical minerals in the UK can only meet 6% of its needs. The UK government hopes to expand the mining and processing capacity of key minerals such as lithium, nickel, tungsten, and rare earths.

In a press release, the UK government stated: "We will continue to closely cooperate with China. At the same time, we will expand international partnerships to achieve supply diversification, ensuring sustainable long-term supply for British businesses and citizens." The UK government said that future priority partners include, but are not limited to, the United States, the European Union, Canada, Australia, Saudi Arabia, India, and Japan.

The press release specifically mentioned that China is the UK's fifth largest single country trading partner and an important participant in the critical minerals market. "We will conduct our engagement with China in accordance with the principles outlined in the UK trade strategy."

However, this strategy was released six months later than planned. Tim Harrison, Managing Director of Australian Ionic Rare Earths, said that the continuous delays in the UK's rare earth investment plan have hindered the company's plans to build a new magnet recycling plant in the UK. "It is frustrating because we have been eager to prepare since mid-year."

Ionic Rare Earths has established a "demonstration factory" in Belfast, UK, extracting rare earths from old magnets. Harrison said that developing rare earth recycling plants helps reduce the UK's reliance on China.

Ionics Rare Earths in Belfast, UK - Photo

"The US has taken the lead and has clear goals. Now other Western governments must assess their own capabilities and start to ensure the resources needed for their advanced manufacturing industries, because resources cannot meet everyone's needs," Harrison said. "We are studying how to speed up the production of these materials outside of China. But the scale of our demonstration factory in Belfast is limited, and it cannot provide sufficient output for our customers."

Harrison told the Daily Telegraph that Ionic Rare Earths' new factory needs to raise £85 million, but lenders are cautious about the UK's rare earth industry. He believes the UK government must provide the first investment and guarantee prices when necessary to boost market confidence.

Harrison said, "Without capital, we cannot build a new factory. Our negotiations with the UK government on foundational investments are quite close, but according to the current pace, we probably won't be able to start production until the end of 2027." He warned that the continuous delays in the UK's rare earth investment could lead the country to lose the so-called "rare earth race" to China and the US.

The UK Department for Business and Trade declined to comment on Harrison's complaints, and the department expects the UK government to begin providing funds according to the critical minerals strategy from next year.

In recent years, some Western countries have tried to develop their own rare earth industries to promote supply chain "diversification." The US has invested millions of dollars into its domestic rare earth industry, attracting many Western companies. The London-listed rare earth company Pansora announced in October that it would abandon its plan to build a rare earth refining plant in East Yorkshire, UK. Pansora stated that the UK was only willing to invest £5 million, while the US might offer a higher price.

American rare earth company USA Rare Earths has acquired Less Common Metals, a rare earth magnet manufacturer based in Cheshire, UK, for $100 million. The Daily Telegraph reported that this may cause Less Common Metals to transfer part of its production capacity to the US.

China has long maintained a dominant position in the rare earth mining and refining sectors, accounting for about 70% of global rare earth mining and 90% of refined output. The UK, the US, and the EU heavily rely on Chinese rare earth minerals, rare earth alloys, and rare earth magnets.

Nevertheless, although the West is desperately trying to "reduce dependence on China," the development of the rare earth industry is far from something that can be achieved overnight. The UK's Times admitted that even if US and European rare earth companies can successfully increase their rare earth production capacity, they will still struggle to compete with China on cost and will have to sell rare earths at significantly higher prices than China. The UK is even far behind the US, having lost the opportunity to develop its rare earth industry from the beginning.

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Original: toutiao.com/article/7578869875976782370/

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