UK approves use of export finance to secure critical minerals

UKEF can now provide financial support for overseas projects that source critical minerals for use in major UK industries

Staff Writer, Zawya Projects

November 1, 2024

The Chancellor has announced that UK Export Finance (UKEF), the government’s export credit agency, will offer financial support for overseas projects that supply critical minerals fuelling UK industrial growth and the net zero transition. 

A UKEF press statement said financing will be offered in the form of credit guarantees to overseas companies, helping them access debt financing for projects which supply UK exporters with critical mineral products – including both raw and processed materials.

This would make it easier for UK manufacturers to secure contracts with critical mineral suppliers in countries with vast mineral deposits, including Australia, which holds large deposits of lithium, the statement said. 

Jonathan Reynolds, Secretary of State for Business and Trade, said: “There is intense global competition for critical minerals like lithium, tin and cobalt which are essential for industrial growth, British industries and our journey towards net zero. As the energy transition pushes demand to new highs, this financing offer will help UK companies to get a seat at the table, build international partnerships and secure their critical mineral needs.  Helping exporters to access these vital resources will support UK industrial growth and our leadership in emerging technology.”

The UK government is a founding member of the US-initiated Minerals Security Partnership (MSP), which aims to help member economies secure a stable access to critical minerals. 

UKEF is working with other export credit agencies and financial bodies under the recently launches MSP finance network to help de-risk and increase financing for critical minerals projects. It recently anounced a guarantee supporting machinery exports to one of Central Asia’s largest copper-production facilities – Almalyk Mining and Metallurgical Complex – in Uzbekistan.

(Editing by Anoop Menon) (anoop.menon@lseg.com)