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

Part of the debate – in Westminster Hall am 3:05 pm ar 23 Ebrill 2024.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Richard Thomson Richard Thomson Shadow SNP Spokesperson (Wales), Shadow SNP Spokesperson (Northern Ireland), Shadow SNP Spokesperson (Trade), Shadow SNP Spokesperson (Business) 3:05, 23 Ebrill 2024

It is a pleasure to serve under your chairship this afternoon, Sir Gary. I add my congratulations to Steve Double on securing a debate on this important topic.

Although the concentration on lithium is entirely understandable, given the significance not just to Cornwall but to the broader economy of having a secure supply, critical raw materials go much wider. The minerals are economically important because they are needed to make batteries and semiconductors, which are vital for the transition to clean energy, as we have heard, but they are also at the greatest risk of supply chain disruption. The UK has 18 metals and minerals on its CRM list, and another six minerals are classed as having an elevated criticality because of where they come from. As is sometimes said in relation to the economy, if we cannot grow it, we have to mine it. That is very much where we are.

I offer some assurances to Jim Shannon, who felt that Northern Ireland was somewhat left behind in this policy area. The British Geological Survey has compiled a report on where many of the critical minerals can be found, and there appear to be significant deposits of very many spread across the counties of Fermanagh and Tyrone, so Northern Ireland can potentially play a role in meeting the demand for them.

Apart from Cornwall, about which we have heard, west Wales, Cumbria and the highlands of Scotland, as well as my own patch of Aberdeenshire, are also thought to be home to significant deposits. I can certainly testify to the interest in the issue: in September 2022, a helicopter that was seeking to detect critical minerals in Aberdeenshire managed to hit a pylon and black out 1,000 of my constituents’ electricity supplies for some time. That had some ramifications, but it brought it home to people that something out there was worth looking for, even if we hope that more care is taken in future.

Outside the UK, the 18 critical minerals are concentrated in particular geographical areas. For example, Brazil produces 98% of the global niobium reserve, the majority of cobalt comes from the Democratic Republic of the Congo, and Russia has significant deposits of palladium. For the vast majority of critical minerals, many of the countries in which they are concentrated are autocratic, many are non-aligned, which is a matter for them, and with many we do not enjoy the best of diplomatic relations. Ensuring continuity of supply is therefore in many respects as much a geopolitical issue as a geological one.

The world in 2040 is expected to need four times as many critical minerals as are being used today. The demand for lithium, particularly, is expected to surge by about 90% over the next two decades. Demand for nickel and cobalt is expected to rise by between 60% and 70%, and demand for copper and rare earth metals is expected to increase by 40%. To take one example that is most closely associated with the increased demand for CRMs, electric vehicles use 10 times more of those materials than conventional cars. Reaching net zero transport emissions by 2050 would require the sixfold increase of critical mineral extraction over the next 15 years.

It is estimated that stripping the earth’s natural resources in this way is causing about 60% of global heating impact, including land-use change, 40% of air pollution impact, and more than 90% of global water stress and land-related biodiversity loss. It is important that we go about extraction, whether domestically or internationally, with care. There are some important principles to keep in mind. We cannot afford for our approach to achieving domestic resilience and net zero to come at a similar or greater environmental cost than that which we are hoping to forestall. That is why we must ensure that the extraction of CRMs is done as sustainably as possible, wherever they happen to be extracted. That means transforming the extractive industries to minimise the social and environmental impact, which has to be part of the solution to moving towards net zero. A failure to do that will simply lead to stranded assets, perpetuating existing vulnerabilities and inequalities around the world. It will jeopardise the fight against climate change and threaten human wellbeing, ecosystems and economies for decades, if not centuries.

Successive UK Governments have perhaps to a certain extent sleepwalked to the position we are in now, which leaves the economy vulnerable to the sensitivities in supply. That was recognised in last December’s report by the Foreign Affairs Committee, which found that successive UK Governments had

“failed to recognise the importance of critical minerals” in their strategies, and had

“failed to respond…to the aggressive capture of large parts” of the global market over the last three decades—particularly by China—which has allowed a single country to dominate the UK’s critical minerals supply, leaving us with the consequent vulnerabilities in terms of economic resilience and security. China is the dominant player in the market—we should not ignore or be blind to that. Nor should we be blind to the fact that the Chinese state has not been slow to use that dominance against other states that it has found itself in dispute with.

What is to be done? Domestic CRM is largely unproven as yet. It could in many cases be years away from happening, even with a fair political wind and a benign planning approach. The USA and others are acting in this space. The USA is beginning to re-shore supply chains through the Inflation Reduction Act, and in 2020 the EU published its own action plan on critical raw materials, which is influencing its policy responses.

As well as extraction we need to look at how we can create a genuinely circular economy that can repurpose materials that have already been extracted. For example, the Scottish Government want to ban the sale and supply of single-use vapes in Scotland from April 2025. A single-use vape contains plastic, copper, cobalt and a lithium battery. The total amount of single-use vapes purchased every year contains enough lithium to provide the batteries for 5,000 electric vehicles. We should not allow the fact that they are very small products to disguise the adverse impact they can have not only on the environment after they are disposed of, but in terms of how their ingredients could be put to better use and secondary and tertiary use in future.

In conclusion, the UK has to urgently address dependency on China for its critical minerals. It must make itself more resilient to disruption in the CRM supply to avoid a situation in which the Government find themselves exposed economically or in terms of security. The UK needs to play catch-up with what our American and European partners have done to minimise their own exposure. We also need to work relentlessly to create circularity in our economy to make sure that the critical materials that we have already do not end up in landfill or not being used, so that they can be repurposed to minimise exposure and preserve the planet’s resources. There is only one planet. We need to do all we can to protect it and make the best use of its resources.