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China risks pushing up UK energy bills further, warns Dominic Raab

Dominic Raab
Mr Raab also warned thatthe UK and other Western countries risked missing their net zero targets - Belinda Jiao

Households face higher bills unless Western governments can break China’s stranglehold over critical minerals needed for the green energy transition, Dominic Raab has warned.

The former foreign secretary, who also served as Rishi Sunak’s deputy prime minister, said Beijing’s efforts to dominate materials used to make wind turbines, solar panels and electric vehicles (EVs) risked pushing up prices for the rest of the world.

He also warned that without “a quantum leap” in efforts to secure independent supplies of their own, the UK and other Western countries risked missing their net zero targets.

Rising costs for raw materials would push up production costs for green energy technologies, raising the risk that these could be passed on to governments and taxpayers through higher energy bills or consumer prices.

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Speaking to The Telegraph, Mr Raab said: “If you talk about the green transition, we can’t do any of that stuff without the lithium, the graphite and the other critical minerals needed to power the wind turbines and solar panels, and EV batteries.

“It’s not a free market, if you have such concentration of both production and refinement of these critical minerals [in China].

“So what will happen? Well, either the price will go up – and that will cost us all, taxpayers and business – or we just won’t meet the targets to reach net zero by 2050.

“That’s ultimately what I think the issue will be for taxpayers and for businesses, particularly in the green sector.”

Mr Raab’s comments came as he joined private equity firm Appian Capital, which invests in mining, as a geopolitical advisor.

He is also set to chair a new committee formed by Appian and SAFE (Securing America’s Future Energy), a non-profit that advises the US Government on energy security policy.

Critical minerals are needed to make everything from computer microchips to the magnets that are needed for wind turbines and batteries for EVs.

However, despite lacking reserves domestically, China has come to dominate refining, as it processes about 70pc of the world’s cobalt, 70pc of its nickel and 60pc of its battery-grade lithium, as well as 40pc of its copper.

Critics say it has done this by undercutting Western labour and environmental standards and by pumping tens of billions of dollars worth of subsidies into its refining industry.

Asked whether he believed the UK and its allies were taking the issue seriously enough, Mr Raab replied: “Has the West as a whole been a bit slow to the game? Yes, I think that’s probably a fair comment.

“Now, governments are much more seized of the issue.”

Michael Scherb, chief executive of Appian, claimed that the West was currently “20 years behind China” on critical minerals.

He added: “It’s the greatest challenge of our time. And the thing about commodities mining, it’s a crossroads between geopolitics and technology.

“I do think that, for the first time, Western governments are taking this seriously. But they’re very, very late to the game.”

The warning comes after MPs claimed successive UK governments had “failed to recognise the importance” of critical minerals, despite a decades-long effort by China to capture large parts of the market.

In a report published in December, the Foreign Affairs Committee accused ministers of being complacent and allowing too much of the critical minerals supply chain to become dominated by one country – leaving the current government with “a mountain to climb”.

The report said: “The Government has tried a hands-off approach, but it has left the UK too vulnerable on what is, fundamentally, a security issue.”

MPs also said the UK’s first critical minerals strategy, which was published in 2022, lacked detail and had not sufficiently taken into account the needs of specific industries and the gaps that needed to be addressed.

A Department for Business and Trade spokesman said: “Given the global race for critical minerals we’re taking decisive action to ensure we have resilient domestic supply chains that give our businesses the long-term certainty they need.”