China’s dominance of critical mineral refining and the UK’s struggle to build competitive domestic supply chains came under renewed scrutiny during the latest hearing of the Business and Trade Sub-Committee on Economic Security, Arms and Export Controls inquiry into critical minerals and economic security.
Industry and geological experts warned Parliament that Britain remains structurally exposed to supply chain disruption across minerals essential to defence systems, electrification, battery manufacturing and industrial technology.
The hearing forms part of a wider parliamentary inquiry launched in March 2025, examining whether the UK’s economic security framework is “fit for purpose” amid intensifying geopolitical competition, resource nationalism and growing concern over critical mineral dependency.
At the centre of the session was China’s dominance over not only raw resources but also processing, refining and metallisation capacity.
“The processing stage, whether it is smelting or refining, is where the bottlenecks are,” Dr Gavin Mudd of the UK Critical Minerals Intelligence Centre told MPs.
“That is where China has been very successful.”
Jeff Townsend, founder of the Critical Minerals Association, described China’s control of the midstream as “the biggest vulnerability to the Western world.”
A February 2026 GlobalData report supported that view, noting that supply concentration risks are greater in refining than in mining.
Townsend pointed MPs to the case of Less Common Metals, the Cheshire-based rare earth alloy producer acquired by USA Rare Earth in a transaction valued at roughly US$100 million in cash and shares, as part of broader Western efforts to rebuild non-Chinese rare earth supply chains.
The acquisition has since taken on greater strategic significance, with USA Rare Earth announcing initial commercial yttrium metal production through the UK facility in April, positioning the company among the few non-Chinese producers capable of manufacturing commercial-grade yttrium metal, used in aerospace alloys, defence systems, lasers and advanced electronics.
“We had one of the strategic projects in the Western world,” Townsend said.
“We had it, and we now do not own it.”
Energy pricing emerged as one of the sector’s most serious structural constraints.
UK’s industrial electricity prices were around 23 per cent above the EU average during the first half of 2025, according to a House of Commons Library briefing, with a separate parliamentary committee describing them as the highest in Europe and 108 per cent above the EU average.
Dr Kathryn Goodenough of the British Geological Survey referenced a decision by a lithium developer to place a Cornwall project into care and maintenance while advancing a separate French operation, citing UK energy costs as a significant factor.
Written submissions from Dr Kathryn Moore of the Camborne School of Mines and Dr Bridget Storrie of University College London added a starker warning: Britain is “not self-sufficient in any geological resources” and its supply chains connect to conflict-prone jurisdictions including Ukraine, Angola, Afghanistan and the Democratic Republic of Congo.
“The extractive industry is particularly vulnerable to crises,” their submission stated.
“A mine cannot be moved out of the way of conflict.”
The academics also cautioned that current criticality assessments remain inherently backward-looking, based on historical trade data rather than rapid geopolitical shifts or future conflict scenarios.
Across both oral and written evidence, the message to policymakers was broadly consistent: recognition of the strategic importance of critical minerals is not yet translating into sufficiently coordinated action.
“We are all trying to catch up,” Mudd told MPs.
“China has leap-frogged way ahead.”
The inquiry chair, Liam Byrne, has not announced a timetable for the conclusion of the Sub-Committee’s inquiry or the publication of a final report.
