UK Rare Earths Refinery Project Abandoned
A planned rare earths refinery at Saltend in the United Kingdom has been officially scrapped, with the developer instead focusing on American operations, according to reports. The project, which would have established Britain’s first major rare earth processing facility, has been abandoned despite previous government backing under the Critical Minerals Strategy.
Strategic Importance of Rare Earth Elements
Despite what the name implies, rare earth elements are actually relatively abundant in the Earth’s crust, though extraction remains challenging and costly. The Saltend facility was intended to process these critical minerals for high-tech applications including electric vehicle motors, wind turbines, and robotics applications. Industry analysts suggest this would have given the UK a strategic foothold in an industry currently dominated by China.
Insufficient Government Support Cited
According to Pensana’s founder Paul Atherley, the £5 million investment announced by Boris Johnson’s government in 2022 was “nowhere near enough” to make the project economically viable. Sources indicate that China’s market dominance has enabled it to maintain artificially low prices, making refining operations in the UK uneconomic without substantial government backing. The Treasury reportedly proved unwilling to increase its contribution beyond the initial commitment.
US Incentives Outpace UK Support
The report states that Pensana’s decision contrasts sharply with developments in the United States, where MP Materials secured over half a billion dollars in investment and soft loans for a similar facility in California. This substantial support package reportedly includes a 10-year agreement guaranteeing minimum prices for all magnets produced. Industry analysts suggest this disparity in government backing made the US option significantly more attractive for the company.
International Response and Alternative Plans
Chancellor Rachel Reeves recently confirmed at an International Monetary Fund meeting that she is working with G7 counterparts on critical minerals strategy to reduce reliance on dominant suppliers. Meanwhile, Pensana has announced plans to partner with US refiner ReElement Technologies to develop what they describe as a “sustainable, independent rare earth supply chain.” The company is also reportedly planning to list its shares on the Nasdaq stock exchange, further shifting its focus toward American markets.
Broader Industry Context
The decision comes amid growing global competition for critical minerals, with multiple companies reportedly expanding their technological capabilities in related sectors. While the Saltend project has been abandoned, sources indicate Atherley remains committed to the UK through other ventures, including Tees Valley Lithium, which continues to advance plans for a lithium refinery in Northeast England. The broader economic landscape continues to influence such strategic investment decisions across multiple sectors.
According to industry observers, this development highlights the challenges Western nations face in establishing independent supply chains for critical minerals amid intense global competition and varying levels of government support.
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