Lithium: Critical Minerals Supply — [Sir Gary Streeter in the Chair]

Part of the debate – in Westminster Hall am 2:30 pm ar 23 Ebrill 2024.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Steve Double Steve Double Ceidwadwyr, St Austell and Newquay 2:30, 23 Ebrill 2024

I beg to move,

That this House
has considered the supply of lithium and other critical minerals.

It is a great pleasure to be able to lead this debate today, especially with you in the Chair, Sir Gary—I know you will enjoy me talking extensively about Cornwall once again. This debate is very important to me because this particular subject is relevant to my constituents in St Austell and Newquay, and indeed Cornwall as a whole. The main content of my remarks will be focused on lithium extraction and production because we have an opportunity in Cornwall to extract and provide substantial amounts of lithium in the coming years. I recognise that lithium is by no means the only critical mineral and that, beyond the application of lithium-ion batteries, there will be many other industries that are reliant on so many other kinds of critical minerals.

Critical minerals are defined as commodities other than fuel that are crucial to a state’s economy or national security, with a supply chain that is particularly vulnerable for a number of reasons, such as geopolitical tensions. Following a comprehensive assessment by the British Geological Survey, which evaluated minerals according to their economic vulnerability and supply risks, the UK Government now identify 18 minerals as critical. That list is kept under review and is not meant to be definitive, but it will be informed by the science as it evolves and new discoveries as well.

Those minerals are deemed critical because they underpin the supply chains of modern-day technologies that are critical to day-to-day life—from electronic communications, our smartphones and our watches to the automotive industry, particularly electric vehicles, as well as defence and cyber-security. They can also have critical applications in other fields, including the pharmaceutical industry. They are more relevant than ever before, particularly as we transition to a green economy, and the technologies that will help us to achieve that depend on those minerals. Lithium, graphite, cobalt and nickel are needed in large quantities to make electric vehicle batteries and they will form the future backbone of the global automotive industry, while wind turbines depend on permanent magnets built with rare earth elements and copper. Without a sustainable and secure supply of critical minerals for the coming decades, we will simply not be able to meet our net zero target, maintain our critical defence and security capabilities, or support the creation of thousands of highly skilled, highly paid jobs in the tech, defence and automotive industries.

It is therefore no surprise that the global demand for critical minerals has shot up in recent times. In particular, there are concerns about the supply of lithium, which is going to come under huge pressures globally in the race to create more lithium-ion-based products. Securing a reliable supply of lithium is going to be crucial to our future economic prosperity. High-grade deposits of lithium can currently be found in four countries around the world—Argentina, Australia, Chile and China—with those countries dominating the global market at present.

Looking a bit further up the supply chain, China hosts 60% of the world’s lithium refining capacity. A report published at the end of last year by the Foreign Affairs Committee found that China looks ready to exploit the economic advantages arising from its global dominance of the lithium refinery market, and there are concerns that the UK has not yet taken steps to embrace the opportunities provided by lithium and other critical minerals. With technological advances constantly shifting towards a reliance on more lithium-heavy batteries, lithium extraction will need to increase significantly across the world to meet that demand. Analysis has shown that by 2030, even with global supply ramping up significantly, there will still be a 55% gap between supply and demand, because of a sharp increase in the demand.

Other critical minerals used in the production of batteries also appear to be in short supply, but analysts agree that of all the minerals involved, the supply of lithium presents the greatest challenge. But there is good news. The UK has a significant deposit of this most critical of minerals in Cornwall. We have known about its presence since the 1850s; I have seen mining maps from the 1850s that point to the fact that lithium is present. There was even a small mine in my constituency just outside St Dennis that in world war two supplied small amounts of lithium for the war effort. With demand and prices now rising, these deposits have become viable for extraction.

The Government have recognised this issue. In July 2022, they published the UK’s first-ever critical minerals strategy, which was a key landmark in the recognition of the importance of securing a sustainable supply of these minerals. In March 2023, it was reviewed and renewed with the “Critical Minerals Refresh”. It was disappointing, however, that this latest policy paper made no mention of the significant increase in the supply of critical minerals needed to meet our net-zero targets and energy security requirements. I am concerned that there seems to be a silo mentality in some parts of Government, with different Departments looking at different aspects of what is needed to reach net zero and secure our future. We need a cross-Government, joined-up approach to link up our priorities. Critical minerals challenges and opportunities cannot be addressed in an isolated manner.

Some people have asked, “Well, why can’t we just rely on imports of these minerals?” As I have mentioned, China is looking to dominate and control supply, and concerns have been expressed about the ethical and environmental reputation of lithium extraction around the world. People are becoming more aware of the need to understand the supply chain of products they purchase and the standards of supply and production. There is little point in buying an electric vehicle if substantial environmental harm is caused in the supply chain process.

Lithium and cobalt have attracted the most international attention, with reports of the use of child labour in cobalt mines in the Democratic Republic of Congo and abuses of indigenous rights in lithium mining projects in South America making global headlines. This proves there is a good reason why the UK must shift its focus from getting its supply of critical minerals abroad to securing them domestically wherever possible. Having a domestic supply of critical minerals will mean that we can control the standards of supply, maintaining the highest environmental and ethical standards as well as reducing our carbon footprint by not having to important these materials. It will also keep value in the UK economy.

Reaching our net-zero target by 2050 presents a challenge and an opportunity. Clean growth has been at the heart of the UK Government’s plan to level up our industry and economy. This country aspires to be a world leader in electric vehicle and battery technologies, but that will only be achieved by growing our battery manufacturing. Importing will not be the answer. The more we can source the materials we need domestically, the more it will help us to achieve this goal. Doing so will mean that we can create green jobs of the future within the UK, attracting investment and growing our economy while reducing our carbon emissions.

Cornwall has produced virtually every battery metal in the past. It is imperative that we fully exploit the geological potential the duchy offers once again to lay a path to our transition to net zero. Cornwall powered the industrial revolution with copper and tin, and we are ready to power the green revolution and be at the heart of our nation’s prosperity once again. We are fortunate in Cornwall to have two excellent companies, both operating out of my constituency of St Austell and Newquay, developing lithium production in different ways: Cornish Lithium and Imerys British Lithium. Without going into the technical detail, they are both pioneering new methods of extracting and processing lithium from hard rock and brines beneath Cornwall. Both are working to ensure the highest environmental standards.

One of the questions I am most frequently asked is about how much local opposition there is to the lithium extraction, largely because of the industry’s reputation around the world. The answer is virtually none. That is, first, because mineral extraction is what we do in Cornwall; it is in our DNA. We have been continuously mining tin and copper for thousands of years and china clay for the past 280, and the vast majority of people locally are delighted to see the opportunity to revive our mining heritage for a new era. Secondly, the lithium is located in formerly mined land, so we are not digging up new countryside to extract lithium. Just as importantly, both Imerys British Lithium and Cornish Lithium are committed to working with local communities. They have both recently held public engagement sessions. At those events, they made clear their commitment to the highest standards and the lowest possible impact on the environment.

Between them, the Cornish Lithium and Imerys British Lithium projects expect to be able to supply 40,000 tonnes a year of the 80,000 tonnes that UK car manufacturers will need for batteries. That is half of the supply from a domestic source. That will put the UK at a competitive advantage, as well as being good news for the Cornish economy. Some people predict that lithium extraction could be like tin all over again for Cornwall.

It is not just lithium; we still have tin and copper deposits in Cornwall, where copper is potentially making a comeback, having been the focal point of our first mining revolution. High-grade qualities that are 16 times higher than the global average have been discovered during the underground exploration of lithium at the United Downs site, in the constituency of my right hon. Friend George Eustice. Also in his constituency is South Crofty mine, an ancient tin mine with records of mining in the area as early as the 16th century. Nowadays, the site presents the fourth-highest-grade tin resource in the world. It is under the ownership of Cornish Metals, which is working to ensure that Cornwall can begin supplying our growing demand for tin in the near future, and is expected to employ more than 200 people.

I was pleased to receive an update from the Minister that went out to all MPs in a “Dear colleague” letter last week, informing us of the establishment of the new Critical Imports Council and its first quarterly meeting, which the Minister chaired. That is welcome news. The council brings senior Government officials together with stakeholders from industry and academia to discuss the challenges and opportunities presented by the global supply chain landscape. In an ever more uncertain and rapidly evolving world economy, it is vital we work closely with strategic and academic partners to help the UK adapt and respond to risks and opportunities. I was pleased to learn that key sectors, including manufacturing, technology, health and life sciences industries were represented at the meeting. From medicines to smart watches, critical minerals are needed now more than ever, so it is welcome that the Critical Minerals Association, which provides the secretariat to the all-party parliamentary group for critical minerals, and the Institute for Minerals, Materials and Mining are both members of the council.

I look forward to receiving further updates on the council’s work in the light of the discussions we will have on lithium and other critical minerals today. I hope the Minister will pay close attention to the work of businesses such as Imerys British Lithium and Cornish Lithium in my mid-Cornwall constituency. Indeed, I invite him to come to Cornwall to see for himself to see the fantastic opportunities that lie underneath our rocks.

I have engaged with both businesses over a number of years and they have a few requests of Government to help and support them as they develop to provide the lithium we will need. The first is on regulation, which needs to be more coherent and understandable. There is too much of a patchwork of regulations at present, which is making it hard for the industry to navigate. Between getting permits and planning, there are plenty of bureaucratic hoops that they have to jump through. It is not beyond the realms of imagination to have a body like the Coal Authority for lithium and other critical minerals, to help harmonise and make regulations clearer. The future for lithium, with the right regulation, is extremely bright and offers an opportunity for the UK economy.

Secondly, a range of standards on carbon intensity and ethical traceability of supply chains is coming down the track. The UK needs to prepare itself to take advantage of the opportunities that presents. Lithium from Cornwall presents a huge opportunity to meet those standards. It is in our interests to support responsible, transparent and traceable supply chains. We should consider developing a required traceability standard for all lithium used in UK manufacturing. We should also consider including lithium extraction within the carbon border adjustment mechanism, which is currently being consulted on.

Post Brexit, we now have our own system of chemical classification distinct from EU regulations, which allows us to review whether those classifications are right in the light of the best and most up-to-date scientific research. Crucially, it also allows us to take a stand against proposals that are not supported by the available science, such as the European Chemicals Agency’s proposal to classify lithium carbonate, lithium hydroxide and lithium chloride as category 1A reproductive toxicants in 2021.

Although that might be justified for some other toxic substances, for lithium it is simply not backed up by the evidence. It is, therefore, welcome news that the Health and Safety Executive published its own opinion in August 2023, outlining concerns with the evidence and methods used by its European counterpart. It triggered a full assessment and called for further evidence. It is important we examine all the evidence, but the process could take several years, and no end date is currently in sight. That could leave a highly capital intensive and critical industry facing regulatory uncertainty. This could be a key Brexit benefit, and I ask the Minister to give an update on what is being done to accelerate this process to a conclusion as soon as possible.

In summary, we hear a great deal about the need to strengthen our military defence, and rightly so in an increasingly uncertain and hostile world, but in my opinion not enough is said and not enough attention is given to strengthening our supply of critical minerals. We face a risk of a global supply chain of minerals such as lithium being controlled by states that are not our friends and allies. I urge the Government to do more in this field. Cornwall stands ready to step up and play a significant role in providing the secure, clean and ethical supply of some of the critical minerals we are going to rely on the most in the decades to come.