The West is now awake to the critical minerals race, says Rio Tinto boss
Governments across the western world have woken up to the urgency of securing essential metals and minerals in order to reach net zero and compete with rivals such as China, Rio Tinto’s chief executive has said.
Jakob Stausholm told the Financial Times that China remains ahead of the UK and its allies in having integrated supply chains for many minerals, but that a more positive attitude in the West has been developing towards mining, such as talks on how to accelerate mine development.
He argued that China is in a good position because “they have planned for it”, but that countries across Europe and North America were starting to do what China has historically done – such as building robust supply chains.
“Mining ultimately comes down to societal choices . . . in a number of western countries, it has been very difficult to get permits for mining. But there’s a lot of dialogue these days on how to shorten the permit processing,” the mining boss said.
The UK has launched a critical minerals strategy and is hoping to revive the domestic vehicle industry with Britishvolt and a new Jaguar Land Rover factory, but finds itself competing with rivals for cobalt, copper, lithium, nickel and zinc – essential components for electric vehicle batteries and cathodes.
“People realise there is a need for it. You will simply not be able to build a new-energy system and reduce the world’s CO2 emissions without getting sufficient access to a number of minerals,” Stausholm said of the shift in attitude towards mining.
The US government estimates demand for rare earth elements lithium and cobalt could surge as much as 600 per cent over the coming decade.
China has a dominant role in many of these markets and in mineral processing, and with the government aiming to reduce its reliance on the country to meet its needs.
Currently, the UK would need between 53,000 and 70,000 tonnes per year of the silvery-white metal to meet EV demand in 2030, according to research group Rystad Energy.
However, it is currently only on track to have only secured around 35,000 tonnes by the end of the decade – making new deals with allies and overseas partners essential.
Rio Tinto’s largest shareholder is Chinese state-owned aluminium producer Chinalco.
The miner is one of the world’s largest producers of iron ore and copper, with a business model that is dependent on sales to China, where it generated 54 per cent of its $55.6bn (£42.5) of revenues last year.