In a bid to reduce China’s dominance in the critical minerals market, Chancellor Rachel Reeves is set to announce new government measures to stimulate imports from Commonwealth countries. This initiative aims to provide businesses importing essential minerals, including lithium, graphite, and cobalt, with access to state-backed loans through the UK export finance mechanism.
Critical minerals are vital for renewable energy technologies and electric vehicle battery production, as well as for the defense and aerospace sectors. The UK government is particularly focused on sourcing these materials from Commonwealth nations like Australia, which is rich in lithium reserves.
With demand for critical minerals projected to outpace supply in the coming decade, there is growing concern over the UK’s dependency on China. Recent data reveals that in 2022, China controlled a staggering 72% of the world’s lithium supply and 68% of cobalt, according to the Chatham House think tank.
This announcement will take place during the Commonwealth summit in Samoa. When asked about the importance of countering China’s influence in the Indo-Pacific region, a UK government spokesperson emphasized its strategic significance: “The Pacific is a crucial area for geopolitics, security, and economic interests. By 2050, over half of global growth will come from the wider Indo-Pacific, and 60% of global shipping trade already transits this region.”
Additionally, there’s news of an investment of up to £1 billion in UK real estate from AustralianSuper, Australia’s largest pension fund. The fund plans to increase its international investment team in London significantly over the next decade, with expectations to manage £250 billion by 2035, up from the current £15 billion.
These investments were highlighted following a meeting between Prime Minister Keir Starmer and business leaders at the summit, with Starmer stating, “These investments are a major vote of confidence in the UK and in this government. By attracting strong, sustained investment, we will also build the expertise we need to drive innovation, stay ahead of the global game, and support economies around the world with British-backed projects.”
