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Government whistles as EV tariff cliff approaches

There is an easy first piece of advice for the government’s new Critical Minerals Intelligence Centre (CMIC) to hand over to its Westminster bosses: we don’t need to exist. The body has been set up, as announced earlier this week, to support the development of “evidence-based policies aimed at developing more robust critical mineral supply chains to the UK”, largely for the electric vehicle supply chain. 

This is good news for the British Geological Survey (BGS), which is receiving up to £3.6mn over three years to run the thing, but it will likely just be rehashing work already done by firms such as the Faraday Institution (also government-funded), Benchmark Mineral Intelligence and Fastmarkets. 

The second handy piece of advice for the government would be that the UK will never produce lithium or nickel or other battery metals in any truly material fashion, despite the urgent need for this to happen thanks to Brexit and stage two of the trade deal with the EU that begins in 2027.

It’s even a stretch to imagine large-scale processing of these materials into the forms needed in battery factories. There are, of course, bright sparks in the sector, such as Britishvolt and the existing Nissan plant, but protecting the auto industry’s 800,000 workers from the incoming trade deal cliff edge will take more than some glossy reports. 

CMIC’s first research effort helpfully explained this problem (quoting Faraday work, of course): cars sold to the EU will have to have 55 per cent “cumulative UK-EU content” and battery packs that are 70 per cent UK-EU content in just five years’ time to avoid hefty tariffs. 

We are some way off that point, given the low battery production capacity currently and dominance of China on the processing side. 

Meanwhile, the US government is directly funding an Australian company, Lynas Corp (AU:LYC), to build a rare earths processing plant in Texas to the tune of $120mn (£99mn). By comparison, the UK Department for Business, Energy and Industrial Strategy trumpeted its £350,000 grant to Cornish Lithium alongside the CMIC launch. Granted, there is broader government cheerleading over other projects that will have a much greater impact on the local electric vehicle supply chain, but the actual money is coming from investors.

There are plenty of processing or mining projects owned by UK companies but outside these borders that could do much more with even the £3.6mn going to the British Geological Survey for a few reports. Maybe that point can be made in the next one.