What's Happening?
Plans for a rare earths refinery at Saltend Chemicals Park in East Yorkshire have been abandoned by Pensana, the company behind the project. The decision was made due to China's influence on rare earth prices, making UK refining uneconomic without significant
government support. Pensana will seek investment in the US, where the sector receives more backing. The refinery would have provided the UK with a strategic foothold in the rare earths industry, currently dominated by China.
Why It's Important?
The cancellation of the Saltend project underscores the challenges faced by the UK in establishing a competitive rare earths industry. Rare earths are crucial for high-tech applications, including electric vehicles and wind turbines. The shift to the US highlights the need for stronger government support to develop critical mineral strategies and reduce reliance on foreign sources, particularly China. This decision could impact the UK's ability to secure supply chains for essential technologies.
What's Next?
The UK government is expected to publish a new Critical Minerals Strategy to address supply chain security and support domestic industries. Pensana's move to the US may prompt discussions on increasing government investment in the rare earths sector to compete globally. The development of alternative projects, such as the Tees Valley Lithium refinery, will be crucial in maintaining the UK's position in the critical minerals market.
