A New Global Resource War Begins

From oil to lithium, governments raise the heat

In the new British budget, support for resource businesses has gone under the radar.

Companies in the UK that import “critical minerals” like graphite or lithium - minerals that are viewed as key to economic and national security - will be able to access government loans. The government agency “UK Export Finance,” which helps take British exports to the world, will provide the support.

It is a subtle yet significant move to establish a greater pool of critical minerals in the British economy, potentially even a surplus, that can begin to shift the country away from reliance on China. When it comes to lithium, China controls 72% of the world's lithium refining capacity while having just 8% of global lithium reserves. In parallel, support for importers could help establish new critical minerals supply chains that rely mainly on the Western world or Western partners.

At the core of what the UK is doing is to hedge against a future shock, where China might hold back certain resource exports to the West, because of geopolitics, in the process, crippling Western economies.

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