Investor-owned mining company Pensana has abandoned its plans to build a new rare earths refinery on Teesside in East Yorkshire. Instead, they’re turning their attention to finding new investment opportunities inside the United States. This decision marks a clear turning point from the UK’s stated climate objectives. More importantly, it seeks to establish a foothold in the critical rare earths sector, which is wholly dominated by China.
The Saltend project is worth $268 million (£185 million). It aims to start supplying those raw materials by 2027. The UK government considered this specific project as an important litmus test. Their goal was to solidify their market advantage in the rare earths space. In November 2022, then-Prime Minister Boris Johnson announced a £50 million investment package in the Saltend project. This decision underscored the importance of this project to our nation’s future and leadership in critical minerals.
Pensana’s recent announcement shows a shift in focus back to partnerships with US companies. The company plans to team up with US refiner ReElement to develop a “sustainable, independent rare earth supply chain.” This partnership comes amid rising tensions between the US and China over the state of rare earths. Fortunately, our new Chancellor Rachel Reeves addressed these exact fears when pressed on the matter.
China’s overwhelming role in the rare earths market has caused concern in many countries. This abuse of its power that it uses to manipulate prices and stifle competition is most dangerous and the greatest threat. As Reeves noted, “on our own critical minerals strategy, so that we are less reliant,” the UK government is actively working to reduce dependence on foreign sources.
Britain’s newest rare earths miner Pensana has spent seven years planning a mine in Angola. The decision to abandon the Saltend project reflects the challenges faced by countries attempting to compete against China’s established market. Running MF Rare earths are a group of chemically similar, but technologically critical, minerals that are surprisingly abundant in the Earth’s crust. They’re expensive and difficult to extract, putting a stable supply chain in tight demand.
Even with this setback for the Saltend project, other hydrogen initiatives in the UK are still making headlines. Tees Valley Lithium is moving forward to construct a lithium refinery in Tees Valley region of Northeast England. This launch is an extension of their ongoing work to support a diverse critical minerals supply chain.
Here at home, the federal government has briefly put on some brave pants. They are committing more than $500 million in MP Materials to back a comparable facility in California through loans and equity investments. This understanding transcended party lines to emphasize the necessity of seeking dependable channels for rare earths with rising global geopolitical tensions.