MPs Warn Britain Has No Credible Plan to Break China's Grip on AI and Chip Minerals
Britain's AI ambitions, semiconductor supply chains, and clean energy transition all share a common vulnerability: the materials underpinning them are overwhelmingly processed in China, and a cross-party committee of MPs has concluded that ministers cannot demonstrate they have a coherent strategy to do anything about it.
The House of Commons Business, Innovation, Science and Trade Committee has drawn up ten tests for assessing whether the government has a serious critical minerals policy. Its verdict: it cannot confirm the government passes a single one.
The tests are blunt and practical. Do ministers know which industries need protecting? Which minerals those industries actually consume? Where the supply chain is most fragile? How domestic production, overseas partnerships, skills shortages, and financing gaps will be addressed? Right now, apparently not.
The committee's report, published this week, makes clear that diversifying supply chains away from Chinese dominance is a ten-to-fifteen year project requiring sustained investment and genuine coordination with allies. It stops short of calling for a full decoupling from China, which it describes as neither realistic nor desirable. What it does say is that the current level of dependency gives Beijing far too much leverage.
The problem runs deeper than most people realise. Critical minerals sit inside batteries, chips, datacenters, military systems, and fibre-optic networks. The UK, like the US, the EU, Japan, and most other major economies, imports virtually all of it. But even if more mines opened outside China tomorrow, the bottleneck would remain largely intact. The real chokepoint is refining.
According to International Energy Agency figures cited in the report, China is the dominant refiner for 19 out of 20 strategic minerals, with an average global market share of around 70 percent. A mine in Australia or Canada does not automatically translate into independence if the ore still flows through Chinese processing facilities.
The dependency extends into some surprisingly specific corners of the technology sector. Erbium, used to amplify signals in fibre-optic links, and yttrium, found in ceramic capacitors, are both processed almost exclusively in China. Gallium and germanium, essential for radar, communications hardware, and electronic warfare semiconductors, come from China at 95 and 93 percent of global production respectively.
Beijing has already demonstrated it is willing to use this position. China imposed export licensing requirements on gallium and germanium back in July 2023 as tensions over Western semiconductor restrictions escalated. Then in April 2025, rare earth export controls triggered by US tariffs rippled through manufacturing supply chains and temporarily shut down automotive plants. Britain did not need to be the intended target to feel the impact.
One of the committee's more awkward findings is that standard import data does not capture the full picture. Minerals often arrive embedded inside finished components like magnets, batteries, or circuit boards, effectively invisible in trade statistics. Companies themselves frequently have no clear view of what sits several tiers down their own supply chains.
The committee wants confidential mapping exercises with firms in strategically important sectors, combined with joint purchasing arrangements with allied nations to provide reliable demand for new mining and refining projects before they are built.
Committee chair Liam Byrne was not subtle about the stakes. "Sixteen years after China first weaponised its chokehold over rare earths, Britain remains dangerously exposed," he said. "We don't know enough about what minerals we need or where to find them. Our energy costs make processing uneconomic, we're exporting valuable metal waste, and our public finance institutions are shackled by outdated rules."
The committee's proposed fix has five parts: identify which British industrial and technological capabilities must be protected, map their specific mineral requirements, expand domestic mining, processing, and recycling capacity, pool purchasing power with allies, and establish a dedicated Critical Minerals Finance Facility capable of backing projects through grants, loans, equity stakes, guarantees, and long-term purchase agreements.
The financing piece matters because mineral projects are expensive, slow, and commercially risky, especially in the early stages. The committee wants UK Export Finance's remit extended and British International Investment given the authority to take equity positions in overseas mineral projects. Long-term purchase commitments and price guarantees would help keep strategically vital projects economically viable even when commodity prices dip.
There is also waste being left on the table domestically. The report notes that around 80 percent of UK metal products classified as waste are exported rather than recovered and reused. MPs want better sorting infrastructure and more granular trade data to establish exactly what valuable material is leaving the country.
For projects on British soil, the committee recommends designated critical mineral clusters with hard permitting deadlines, streamlined approvals, energy cost support, and priority grid connections.
A strategic stockpile covering roughly 60 days of minerals needed for defence is also proposed, though the report is careful to note that warehouses are a buffer, not a strategy.
None of this is fast. The committee is not promising a quick fix and is not pretending one exists. Its core argument is simply that Britain needs to decide what it cannot afford to lose, understand what those sectors actually consume, and start financing alternatives now, before the next supply disruption forces the issue.
"De-risking even a prudent proportion of our supplies will take over a decade," Byrne said. "Britain cannot afford to drift."