Investment

23 May 2022

Sunday Times Business Editor Jon Yeomans reports that Business Secretary Kwasi Kwarteng is to back a £150 million rare earth metal processing plant on the Humber that could reduce the UK's reliance on imports of critical minerals from China.

The facility will be built by London-listed Pensana at Saltend Chemicals Park to refine rare earths for use in magnets in electric vehicles and wind turbines.

The business department is putting up £4 million of taxpayers' money from the £1 billion Automotive Transformation Fund, which was set up last year to speed the electrification of Britain's car industry. The grant is intended to help Pensana unlock the private investment needed to fund the plant, which is expected to cost £150 million and create 125 local jobs.

Pensana's facility will process the minerals neodymium and praseodymium, which it plans to mine in Angola from late 2023.

Kwarteng's support comes as the West seeks to tackle China's dominance in the refining of minerals that are vital for electric cars and batteries.

China refines about 90 percent of these metals, stoking concerns that it can cut off supply or raise prices at will.

A Whitehall source said Kwarteng wanted "to chip away at Beijing's dominance in rare earth metals" and stop Britain and Europe "becoming price-takers".

The government has formed a critical minerals expert group and has pledged to publish a strategy in this area later this year.

Pensana's market value has risen steadily since its listing on the London Stock Exchange in July 2020. Its shares closed at 81p on Friday, valuing it at £193 million.

Chairman Paul Atherley said: "We're working hard to establish Saltend as the world's first independent and sustainable rare earth processing hub at a time of growing concern for critical metals supply-chain resilience."

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