UK MPs warn China mineral dependence puts Britain’s AI ambitions at risk

Britain is “dangerously” dependent on China for the critical minerals needed to build AI, strengthen its military and develop renewable energy, a parliamentary investigation has found. The Business and Trade Committee wants a centralized policy and a dedicated finance facility to help secure alternative supplies, according to the Guardian’s November 5 report.

The vulnerability runs through refining

China’s ability to interrupt supplies is not hypothetical. It cut off rare-earth supplies in 2025, and the committee identified that power as a strategic vulnerability for Britain’s economy and national security. The warning concerns materials used across several industries, rather than a shortage confined to one AI product or project.

Witnesses identified processing—the step that turns raw minerals into usable materials—as the bottleneck. The committee heard that China dominates refining in seven mineral categories, including lithium and rare earths. Lithium is needed for electric vehicles; rare earths also serve military applications, including permanent magnets and materials that withstand extreme temperatures.

Demand could intensify that exposure. MPs were told lithium demand would increase 45-fold by 2030, while demand for rare earths used in permanent magnets would rise 16-fold over the same period. Those are projections presented to the inquiry, not measured increases. The committee placed the warning alongside Britain’s effort to rebuild its military capabilities.

We cannot rearm Britain, build AI or deliver net zero unless we secure the minerals these technologies depend on.

Liam Byrne, chair of the Business and Trade Committee

Funding alternatives, not just finding deposits

The committee’s proposed response combines government coordination with investment. Its “critical minerals finance facility” would help fund rare-earth and other mineral mines, using grants, equity investment and debt to accelerate diversification. MPs called for an urgent centralized policy rather than treating access to minerals solely as a purchasing decision for individual businesses.

International cooperation is central to that approach. The committee described working with G7 partners, other European countries and Indo-Pacific countries as the most realistic route forward. It wants them to combine demand to attract new suppliers, giving diversification a shared market rather than leaving Britain to pursue alternatives alone.

Its 10-point plan also calls for work across the domestic supply chain:

• Identify domestic mining, refining and recycling opportunities, along with their costs.
• Develop a strategy to encourage businesses to reduce procurement from China and unlock investment in alternatives.
• Assess whether planning and permitting processes create barriers to mining.

Ministers point to £400 million; MPs want visibility

The government rejected the suggestion that it lacks a critical-minerals strategy. A spokesperson said it is delivering £400 million to increase domestic production and recycling and establish international partnerships. That funding is the government’s stated response to the criticism, not an announcement that it has accepted the committee’s proposed finance facility.

The spokesperson also set out the strategy’s 2035 goals: meet 10% of demand through domestic production and 20% through recycling, while sourcing no more than 60% of any critical mineral from a single country. These are future targets, not a description of Britain’s current supply mix.

For MPs, scrutiny remains an obstacle. The committee said government secrecy had frustrated its investigation: Parliament could not see which capabilities ministers wanted to protect, which vulnerabilities they had identified or which projects they were backing. It concluded that it could not be confident the government could satisfy any of its 10 tests.