King’s Speech

Lord Sarfraz Excerpts

Monday 13th November 2023 Lords Chamber

[Lord Sarfraz (Con)]

My Lords, I congratulate the right reverend Prelate the Bishop of Norwich and my noble friend Lord Gascoigne on their superb maiden speeches.

To meet our economic ambitions, as laid out in His Majesty’s most gracious Speech, we will need to source critical minerals from all over the world. Whether it is tungsten or gallium in defence, or tantalum in medical devices, at least two dozen minerals are highly critical for the British economy. There is no path to net zero without them: wind turbines, solar panels, hydrogen fuel cells and EV batteries all contain critical minerals.

We will probably be able to source some quantities domestically, such as lithium from Cornwall, but the geology of the United Kingdom means that we will be hugely dependent on international markets for a long time. Other countries are after the same materials that we need, and they have aggressive sourcing strategies in place. The Chinese strategy is well known: they will invest right through the life cycle; they will fund high-risk exploration; they will fund mine development, which costs billions of dollars; they will build the domestic processing and logistics infrastructure required; and then they will sign a 30-year offtake agreement. But it is not just the Chinese; for many years, many other countries have had upstream strategies in place. The Middle East has its sovereign wealth funds, the Japanese have JOGMEC and the South Koreans have KORES. How do we compete with that? We do not have a sovereign wealth fund or a state-owned mining company, and we have no ability to guarantee offtake.

The Government have laid out their critical minerals strategy, but the end-users in industry do not think it goes far enough. Our strategy must be strengthened. We need to build emergency stocks, which might be held overseas, otherwise we will end up panic buying, as we did with PPE. We will need to work with our allies and partners to strengthen our buying power. We alone have very limited market share and thereby little influence. We will need a state-owned entity to be the buyer of last resort. We have precedents such as the Low Carbon Contracts Company, and we should not be shy to apply similar models to critical raw minerals from overseas. Most importantly, we will need to ensure, with full transparency, that we source sustainably and ethically. This is where we can better direct our existing resources, whether it is BII, our ODA allocations or our newly appointed Foreign Secretary. We must also continue to leverage the fact that London remains a global hub for mining companies. Doing nothing is not an option.

These industries are cyclical and, when supplies are short, prices will go up, which will mean higher prices for British consumers. In some instances, entire factories will shut down, as we saw during last year’s semiconductor crisis. So I hope that the Government might consider much bolder steps in sourcing critical minerals, which are literally the basic building blocks on which our economic and technological future depends.