UK Chancellor of the Exchequer Rachel Reeves is set to unveil assistance for UK companies that import critical minerals in the upcoming budget. The goal is to support British industries and reduce reliance on China. Importers of minerals like lithium, graphite, and cobalt will have access to UK Export Finance, which typically aids British exporters with financing and insurance. To qualify for this support, importers must have long-term contracts with UK exporters, benefiting sectors like defense, aerospace, electric vehicles, and renewable energy.
In recent years, Western countries have been working to secure critical mineral supplies crucial for advanced manufacturing. Reeves’s initiative aims to make it easier for UK Export Finance to secure finance contracts for suppliers in Commonwealth countries like Australia, known for their large mineral deposits. Prime Minister Keir Starmer is discussing trade and economic growth at the Commonwealth heads of government meeting in Samoa.
Reeves is preparing to announce tax increases and additional borrowing in Labour’s first budget in 14 years. The government aims to raise £40 billion to fund priorities like the National Health Service and address fiscal challenges. Reeves is considering changing the debt measure used for fiscal rules, potentially freeing up an additional £50 billion for infrastructure spending.
While specific companies benefiting from the export finance measure were not disclosed, manufacturers like Rolls Royce Holdings Plc and Tata Motors Ltd. could benefit. Labour is also focusing on attracting private investment to boost the economy and generate more tax revenue. Recently, an additional £1 billion investment in the UK property market was announced by Australian fund Aware Super and Delancey Real Estate.
AustralianSuper, the largest pension fund in Australia, is expanding its international investment team in London, with plans to manage £250 billion from its London office by 2035. Starmer met with business leaders in Samoa to discuss investment opportunities and economic growth. The UK government is optimistic about the potential for increased investment and collaboration between the UK and other countries.
Overall, the financial support for critical mineral importers in the UK reflects a broader strategy to strengthen domestic industries, reduce dependence on foreign suppliers, and stimulate economic growth through strategic investments and partnerships. By fostering a supportive environment for businesses and encouraging international cooperation, the UK aims to enhance its industrial capabilities and secure a stable supply of essential minerals for manufacturing and technological advancements.
