UK 'dangerously' reliant on China for minerals vital to defence and AI, MPs warn

The UK is "dangerously" dependent on China for the critical raw materials that underpin its military, renewable energy infrastructure and AI industries, a parliamentary investigation has concluded. The House of Commons business select committee published the finding as part of a report that calls for an urgent centralised policy and the creation of a "critical minerals finance facility" to fund rare earth and other critical mineral mines.

The facility, as the MPs conceive it, would deploy grants, equity and debt to accelerate a diversification programme away from Chinese supply chains.

"Critical minerals are the alpha of the new economy," said Liam Byrne, the committee's chair. "We cannot rearm Britain, build AI or deliver net zero unless we secure the minerals these technologies depend on."

Byrne, a Labour MP, added a sharper historical indictment: "Yet 16 years after China first weaponised its chokehold over rare earths, Britain remains dangerously exposed."

Why the report matters now

The stakes cut across three of the government's headline commitments: rearmament, artificial intelligence and net zero. Each depends on minerals that China controls at the point of refinement, not just extraction. The report lands as the second criticism of the government's China policy from Byrne's committee in a single week, signalling sustained parliamentary pressure on a strategic vulnerability that has so far produced no centralised response.

China holds a stranglehold on the world's supply of rare earths and other critical minerals, and on the refined byproducts used in everything from military jets to car-locking systems and consumer products such as fridges and washing machines. The exposure is not abstract. It reaches into ordinary households.

Where is the bottleneck?

Evidence to the committee identified "the processing stage" as the choke point. China dominates the refining of seven categories of minerals. Two examples illustrate the range of exposure:

• Refined lithium, needed for electric vehicles.
• Rare earths used in the fuselage and wings of military aircraft to help withstand temperature extremes.

MPs were told that demand for lithium alone would increase 45-fold between now and 2030. On that trajectory, the UK would sit in a high-risk dependency relationship with China at precisely the moment its automotive sector transitions to batteries.

Demand for rare earths needed for permanent magnets — components used in military jets and other applications — would rise 16-fold over the same period. That surge coincides with Britain's effort to rebuild its military capabilities.

What happened when China turned off the tap?

The report treats China's conduct in 2025 as a live demonstration of risk. China demonstrated it could suddenly cut off rare earth supplies, as it did that year, and the committee found that dependency on Beijing therefore constitutes a strategic vulnerability for both the UK economy and national security.

Separate restrictions on legacy chips, imposed after a row over a Dutch intervention in the China-owned Nexperia, left the European car industry "days away" from stoppages last October. That episode, the report implies, previews what a full rare earth cutoff would look like at larger scale.

Can diplomacy fix it?

The UK is not alone in its exposure. The EU, the US and other countries face the same risk of China cutting off rare earth supplies. The committee's finding is that the UK is not putting enough effort into finding alternative supplies compared with its peers.

Washington has bought time, not solutions. Donald Trump secured a one-year reprieve on global export restrictions on rare earths from Xi Jinping in October last year. The reprieve was extended to January 2027 after the Chinese president's recent visit to Washington.

The arrangement carries its own risk. The UK, the report suggests, sits at the mercy of US-China relations, with its mineral supply effectively contingent on the durability of a bilateral deal between two other governments.

The most "realistic" solution, according to the committee, is for the UK to work closely with G7 partners, the rest of Europe and Indo-Pacific countries to "aggregate demand" and bring new suppliers into the market.

Why Parliament says it was hampered

The committee said its investigation was frustrated by a lack of transparency from the government. Its findings on visibility are blunt.

"Parliament has no visibility of the capabilities the government is seeking to protect, the vulnerabilities it has identified, or the projects it is backing to reduce risk," the report stated.

That opacity, the MPs argue, prevents scrutiny of whether the government's diversification efforts are proportionate to the threat.

What is in the 10-point plan?

The committee drew up a 10-point plan that includes:

• Working to identify domestic mining opportunities.
• Identifying refining and recycling opportunities and their costs.
• A strategy to encourage business to reduce procurement from China.
• A plan to unlock investment.
• An assessment of planning and permitting processes that may prove a barrier to mining.

The plan is a test as much as a proposal. As it stood at the time of the report, the committee said it could not be confident the government could satisfy any of its 10 tests.

"The UK requires new institutional and financial muscle," the committee concluded.

What does the government say?

A government spokesperson denied the absence of a critical minerals strategy. The government said it is delivering £400m "to ramp up domestic production and recycling" and to forge new international partnerships.

"Our strategy also sets clear goals for 2035, including meeting 10% of demand through domestic production and 20% through recycling, with no more than 60% of any critical minerals coming from any single country," the spokesperson said.

Those targets set a measurable yardstick for 2035. The committee's counter is that a strategy Parliament cannot inspect cannot be verified — and that between now and 2030, a 45-fold rise in lithium demand will test British supply chains long before the government's decade horizon arrives.