Plans for a pioneering rare earths refinery in East Yorkshire have been scrapped, as the company behind the project pivots to seek investment opportunities in the United States.
Pensana has dedicated the last seven years to developing a rare earths mine in Angola. This significant $268 million project, poised to be one of the world’s largest, is scheduled to commence raw material deliveries in 2027.
The company previously intended to construct a refinery at the Saltend Chemicals Plant near Hull. This facility would have processed raw materials into crucial metals used in the creation of high-performance magnets.
These magnets are essential components in advanced technological applications, including motors for electric vehicles, wind turbines, and robotics.
The project had the potential to establish a strategic foothold for the UK in the rare earths industry, a sector currently dominated by China.
However, as initially reported by Sky News, these plans have now been abandoned.
Despite the implication of scarcity in their name, rare earths are relatively abundant. The term refers to a group of chemically similar minerals found extensively in the Earth’s crust, although their extraction can be complex and costly.
Pensana argues that China has utilized its market dominance in recent years to maintain artificially low prices, thereby suppressing potential competition. This strategy has rendered refining in the UK economically unviable without substantial government support.
Speaking at a meeting of the International Monetary Fund on Thursday, Chancellor Rachel Reeves addressed escalating tensions between the US and China concerning rare earths.
The Chancellor stated that she is collaborating with G7 counterparts “on our own critical minerals strategy, so that we are less reliant”.
In 2022, Boris Johnson’s government announced plans for “a multi-million pound investment” in the Saltend project – launched alongside the then Tory government’s ‘Critical Minerals Strategy’.
However, according to Pensana’s founder and chairman, Paul Atherley, this contribution – actually £5m – was “nowhere near enough”, and the Treasury proved unwilling to contribute more.
Mr. Atherley contrasted this with the agreement between the US government and MP Materials, wherein MP will receive over half a billion dollars in investment and favorable loans to finance a similar facility in California, coupled with a 10-year agreement ensuring a minimum price for all magnets produced.
Earlier this year, Pensana announced its intent to collaborate with US refiner ReElement to develop a “sustainable, independent rare earth supply chain.” The company also intends to list its shares on the Nasdaq stock exchange.
Mr. Atherley maintains a “very positive” outlook on the UK. Another venture he is involved in, Tees Valley Lithium, is proceeding with plans for a lithium refinery in the Northeast.
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