Critical Minerals: Domestic Production

Debate between Perran Moon and Alex Sobel

Tuesday 3rd December 2024 Westminster Hall

[Perran Moon]

I thank my hon. Friend for his intervention and wholeheartedly agree, once again, with the desire for the Government to focus on critical minerals, hopefully developing the critical minerals strategy as a core part of the UK’s overall industrial strategy. I will talk more about that later.

Beneath Cornwall lies a mass of granite rock called the Cornubian batholith—that is harder to say at 9.40 am than one would think—in which lithium-bearing mica was discovered in 1825. In recent years, the extraction and processing of that resource has been developed by two enterprises: Imerys British Lithium and Cornish Lithium, as mentioned by my hon. Friend the Member for Basingstoke (Luke Murphy). Significantly, the UK lithium demand is projected to be 80,000 tonnes a year by 2030, with geological reserves in Cornwall covering a significant proportion of that demand over the next few decades. I point out that even though demand is projected at 80,000 tonnes a year, we currently have no domestic supply.

Both companies have received significant investment, and just this year Cornish Lithium opened its first processing facility, refining battery-grade lithium hydroxide, locally in Cornwall. These companies constitute not potential on the horizon, but enterprises employing hundreds of people, generating wealth, developing technologies and working with communities and academics.

The potential in Cornwall is underpinned by a rich depth of mining heritage over thousands of years, with an economic peak in the 19th century, when tin was mined on an industrial scale, before the price collapsed and jobs moved to other places around the world. The last tin mine closed at South Crofty, in the heart of my area of Camborne, Redruth and Hayle, in 1998. When it did, the following words were graffitied on the closed gate:

“Cornish lads are fishermen,

And Cornish lads are miners too,

But when the fish and tin are gone

What are the Cornish boys to do?”

Today, a firm called Cornish Metals is working to reopen South Crofty tin mine; it is draining it of water as we speak, so that work can start again to meet the severe supply shortages of tin worldwide that the global economy now faces. I have been down South Crofty mine myself and, although it must be said that I am not a geologist, I am convinced that the objectives of Cornish Metals can and must be achieved. Lithium gets a lot of deserved attention because of its use in lithium-ion batteries, but tin is as crucial to modern technologies and electrical infrastructure such as solar panels. Cornwall hosts the third highest-grade tin deposits in the world, and it is the highest grade of tin deposit that is not currently mined.

South Crofty and much of Cornwall more generally represent a unique blend of ancient mining heritage, geological reserves and community support. That comes alongside a cluster of companies and expertise in and around educational institutions such as the world-leading Camborne School of Mines and the University of Exeter, based in Penryn, which has more top 100 climate scientists than any other university in the world.

The UK’s burgeoning critical minerals industry could be a game changer, helping to relieve pressures on communities such as mine and generating jobs and wealth. With those communities in mind, it is fundamental that domestic production works for local people and the natural environment, so that we do unleash the Cornish Celtic tiger.

As an officer of the all-party parliamentary group on critical minerals, alongside my hon. Friend the Member for St Austell and Newquay (Noah Law), I am in close contact with the industry. We attended the Critical Minerals Association conference yesterday and will attend another industry conference on the future of mining later this week. Industry leaders have made it very clear to me that there is a serious gap in the midstream supply chain for batteries, including magnet development. Much focus is on the upstream, but those gaps must be plugged as well.

Industry is crying out for domestic production guaranteed by the Government, whether as a set tonnage or as a percentage of demand on a sliding scale. That would reassure mining finance, which is relatively risk-averse. In that vein, I ask the Government to consider implementing de-risking financial instruments such as price floors, as well as considering mineral-extraction projects as part of the enterprise investment scheme, which provides tax reliefs for investors supporting small and growing enterprises. The industry suffers from a long development timescale and high up-front costs, both of which need to be considered as the Government tackle this country’s industrial and planning issues.

Giving more support to this industry will increase its credibility as a possible career path in the education system. Camborne School of Mines, the UK’s only dedicated mining college, and perhaps the world’s most famous, offers sector-specific undergraduate courses, but we require greater focus on STEM subjects—science, technology, engineering and maths—at GCSE and A-level, alongside apprenticeships. To conclude—I am sure hon. Members will be relieved to hear that—

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

Australia is the world’s largest lithium producer, but nearly all its lithium is exported to China for battery production there, and there is very little domestic battery production. Does my hon. Friend agree that the UK, if it follows the path that he wants it to, should not fall into the same trap? We need to have the upstream demand as well as the mining production.

[Perran Moon]

My hon. Friend is absolutely right. As I mentioned, the risk is that we have a small number of dominant players from areas of the world that are potentially geopolitically sensitive for the UK and the west. It is crucial that we focus on our own domestic critical mineral production, so that we have that security going forward. I entirely agree.

To conclude, critical minerals are the elephant in the room when it comes to energy transition. We must capitalise on UK domestic potential. How we extract the materials, how we capture supply chains and how we develop technologies to recycle critical minerals will only become more important. I have focused on the cluster of businesses in Cornwall, but Northern Lithium, Green Lithium and Weardale Lithium in the north of England represent other acorns of industrial potential that we must support. Northern Lithium is targeting production of over 10,000 tonnes of battery-grade lithium from brines, having secured mineral rights over 60,000 acres. Only last week, Watercycle Technologies from the University of Manchester developed new technology for producing battery-grade lithium from UK source brines.

We have to acknowledge the scale of the challenge at hand in order to generate a rising tide that will lift the whole industry. Critical minerals must form a core part of the Government’s industrial strategy, alongside investment in housing in deprived communities, infra- structure around and within key sites such as Falmouth port, and commercial infrastructure such as rail for freight transport and a tin smelter at South Crofty. Currently, tin produced in the UK would have to be shipped to east Asia to be smelted and then shipped back, creating extensive carbon emissions through shipping and offshoring the jobs and infrastructure in the supply chain that we need domestically.

With all that in mind, I ask the Minister: what is the state of the Government’s ongoing dialogue with the industry? Do the Government recognise the current geopolitical risks of a world shortfall in the supply of tin, and will the white heat of the UK’s critical mineral industry form a key part of the Government’s strategy? If we overcome these challenges, we will deliver the UK’s critical mineral security, create thousands of jobs in deprived communities and accelerate our drive towards a fossil fuel-free future.