The Critical Minerals Race: How the UK Is Joining a 20-Nation Alliance to Break China's Supply Chain Grip

On 4 February 2026, the UK signed a landmark deal with the United States on critical minerals. This happened just hours before ministers from over 50 countries met in Washington for the first Critical Minerals Ministerial. The timing was no accident. After years of watching China tighten its grip on raw materials that power everything from electric vehicles to fighter jets, Western nations are finally fighting back.

For UK manufacturers focused on supply chain resilience, this represents both a warning and a chance. The question is no longer whether supply chain disruption will come, but when. Is your business prepared?

The Scale of China’s Critical Minerals Dominance

The numbers tell a stark story. China controls about 60% of global rare earth mining. Even more striking, it handles 90% of global rare earth processing, according to the International Energy Agency. For heavy rare earths used in wind turbines and EV motors, China’s processing share reaches 91%.

Europe’s dependency runs even deeper. The European Commission says that 17,000 to 18,000 tonnes of the EU’s yearly 20,000-tonne magnet requirement comes from China. A 2025 Benchmark Mineral Intelligence study shows Western nations will depend on China for 91% of their heavy rare earth needs through 2030. That’s only a small drop from 99% in 2024.

This creates real risk. In April 2025, China imposed export controls on seven rare earth elements. These included samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium items. This was a direct response to US tariffs. By October 2025, restrictions had grown to cover more materials. Though some controls paused during a trade truce, Beijing sent a clear message: it will use its mineral power as a weapon.

What the UK-US Critical Minerals Alliance Means

The deal signed in Washington commits both governments to concrete steps:

• Joint project work: The UK and US will find critical mineral projects that fill gaps in supply chains
• Funding support: Both governments will back projects using loans, equity, guarantees, and insurance
• Faster permits: Both sides commit to speeding up approvals for mining and processing
• Fair pricing: Work together to protect industries from unfair pricing and market manipulation
• Asset protection: Powers to block critical mineral asset sales on national security grounds
• Recycling push: Joint support for minerals recycling and scrap management

A Mining, Minerals and Metals Investment Ministerial will meet within 180 days to drive action. This is not vague talk; it’s a working plan with deadlines.

The UK Critical Minerals Strategy: Vision 2035

The November 2025 UK Critical Minerals Strategy sets bold targets to cut import dependency:

• 10% domestic output: At least 10% of UK demand for critical minerals from domestic mining and processing by 2035
• 50,000 tonnes of lithium: A specific target for lithium production
• 20% from recycling: One-fifth of yearly demand from recovered materials
• 60% single-source cap: No critical mineral to come more than 60% from one country

The government has pledged £50 million to support UK critical mineral projects. More funding comes through the National Wealth Fund and UK Export Finance.

Domestic work is moving forward. Cornish Lithium won planning approval in March 2025 for its Cross Lanes project. Commercial drilling starts in early 2026. In County Durham, Weardale Lithium secured approval for a facility targeting up to 10,000 tonnes of lithium per year. These mark the UK’s first commercial-scale lithium production.

The Japan Partnership for Supply Chain Resilience

Prime Minister Keir Starmer’s Tokyo visit on 31 January 2026 boosted the UK’s position. The UK and Japan agreed to expand work on critical minerals supply chains and cybersecurity. This builds on the Hiroshima Accord from October 2023.

Japan brings special skills to this partnership. In early February 2026, a Japanese deep-sea mission pulled rare earth sediment from 6,000 metres below the Pacific. Japan has also kept strategic mineral stockpiles for years. This offers a model that other nations now copy.

Japanese Prime Minister Sanae Takaichi stressed that “like-minded countries” must work together for supply chain resilience. For UK manufacturers, the Japan link opens new supply routes that skip Chinese processing entirely.

Australia’s Strategic Minerals Reserve

Australia announced a A$1.2 billion (about £610 million) strategic reserve for critical minerals in early February 2026. This targets materials at risk from Chinese supply cuts, including antimony and gallium.

With the world’s fourth largest rare earth reserves, Australia is becoming the main Western option to China. The October 2025 Australia-US deal gives American firms access to Australian rare earths in return for investment. Similar deals may follow with the UK.

But scale remains a challenge. Australia’s rare earth reserves are about one-seventh the size of China’s. True supply chain resilience needs multiple source countries, not just swapping one supplier for another.

Which UK Manufacturing Sectors Face the Greatest Risk?

The UK’s Industrial Strategy names critical minerals as vital to five growth sectors: Advanced Manufacturing, Clean Energy, Digital Tech, Defence, and Life Sciences. Some face sharper risks than others.

Electric Vehicles and Battery Manufacturing

Lithium, cobalt, and nickel are essential for EV batteries. UK lithium demand will jump by 1,100% between now and 2035. Copper demand will nearly double. Automotive supply chain firms face direct exposure to any disruption.

Wind Turbines and Renewable Energy

Permanent magnets using neodymium, praseodymium, dysprosium, and terbium are key parts of wind turbine generators. Chinese processing dominance exceeds 90% for all these materials.

The University of Birmingham leads work to create the UK’s first circular supply chain for wind turbine magnets. But commercial-scale recycling is still years away.

Aerospace and Defence Manufacturing

Military systems need rare earths for guidance, communications, and advanced materials. The Ministry of Defence is exploring stockpiling through procurement. NATO’s Critical Mineral Stockpiling Project is looking at reserves of key materials and components. Similar supply chain concerns affect the UK helicopter programme, where sovereign manufacturing capability faces pressure.

Electronics and Semiconductors

Gallium and germanium, both under Chinese export controls, are essential for chip making. The British Chambers of Commerce warns that “advanced manufacturing needs guaranteed sources of critical metals and minerals for the UK’s long-term growth.”

What UK Manufacturers Should Do Now

The alliances and strategies provide the framework. For manufacturers, the key is action.

Audit Your Supply Chain Exposure

Map your critical mineral needs tier by tier. Many firms lack visibility past their direct suppliers. A part from a European supplier may still depend on Chinese processing. Find single points of failure and concentration risks.

Join Industry Demand Aggregation

The government is building a platform to map critical mineral needs across UK manufacturers. Taking part will give you leverage for group buying and better risk intelligence.

Explore Recycling and Circular Economy Options

With the UK targeting 20% of critical mineral demand from recycling by 2035, secondary materials will matter more. The Camborne School of Mines, University of Birmingham, and Queen’s University Belfast are all developing rare earth recycling tech.

Think about whether your processes could use recycled inputs. Consider if your products could be designed for end-of-life mineral recovery.

Monitor Emerging Domestic Supply

The Cornish and Durham lithium projects are just the start. The UK has deposits of tungsten, tin, tellurium, antimony, nickel, and cobalt from Cornwall to Scotland. Build ties with domestic producers now for advantages when production scales.

Consider Strategic Stockholding

For materials with extreme concentration risk, keeping buffer stocks may be wise. The government is looking at national stockpiling, but firms may need their own reserves for business continuity.

Stay Close to Government Engagement

The £50 million funding, UK Export Finance support, and new deals with the US and Japan create chances to access financing and market intelligence. The Critical Minerals Intelligence Centre publishes regular assessments to inform planning.

The Competitive Opportunity for UK Manufacturing

Supply chain resilience is not just about defence. Firms that secure diverse supply chains will gain advantages beyond risk reduction.

Supply chain transparency is becoming a market must-have. High ESG standards in critical mineral sourcing will set suppliers apart. The London Metal Exchange is launching expanded markets for sustainably sourced metals. This creates price premiums for responsible materials.

UK processing and recycling capabilities are growing. Firms that can claim UK-sourced critical materials will have strong stories for customers who care about supply chain integrity.

The Timeline for Action on Critical Minerals

The 2035 targets in the UK Critical Minerals Strategy may seem far off, but the groundwork must happen now. China’s export restrictions have shown that disruption can hit suddenly. The October 2025 truce is temporary and tied to ongoing trade talks.

The Washington alliance, the UK-US deal, and the UK-Japan partnership signal that critical mineral supply rules are changing. Firms that wait for policy to mature before acting will fall behind those who moved early.

The 20-nation critical minerals alliance marks the start of a major shift in how the West sources its raw materials. For UK manufacturers, the message is clear: supply chain resilience is no longer optional. It demands immediate attention and steady investment.