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Major UK rare earths refinery scrapped in favour of US

October 17, 2025

Pensana has abandoned plans to build a rare earths refinery in East Yorkshire, choosing instead to pursue investment in the United States. The company, which has developed a rare earths mine in Angola set to deliver materials by 2027, cited China's artificially low rare earth prices as making UK refining economically unfeasible without substantial government support. The £5 million contribution offered by the previous UK government was deemed insufficient compared to the half-billion dollars in investment and soft loans provided by the US government for a similar facility in California.

Who is affected

  • UK rare earths industry and supply chain development
  • The Saltend Chemicals Plant near Hull
  • Potential users of rare earth magnets (electric vehicle manufacturers, wind turbine producers, and robotics companies)
  • UK's strategic position in the rare earths sector currently dominated by China

What action is being taken

  • Pensana is teaming up with US refiner ReElement to develop "a sustainable, independent rare earth supply chain"
  • Pensana is planning to list its shares on the Nasdaq stock exchange
  • The UK government is preparing to publish a new Critical Minerals Strategy
  • The UK government is working with G7 counterparts on a critical minerals strategy to reduce reliance on imports
  • The UK is reducing industrial electricity costs for businesses as part of its modern Industrial Strategy

Why it matters

  • The project would have given the UK a strategic foothold in the rare earths industry currently dominated by China
  • Rare earths are crucial for producing magnets used in high-tech applications including electric vehicle motors, wind turbines, and robotics
  • China has used its market power to keep prices artificially low, stifling potential competition
  • The UK is losing an opportunity to develop domestic rare earth processing capabilities
  • The decision highlights differences in government support between the UK and US for strategic mineral processing

What's next

  • The UK government will publish a new Critical Minerals Strategy soon to help secure supply chains for the long term
  • Pensana's Angola mine will begin delivering raw materials in 2027
  • Tees Valley Lithium, another company involving Pensana's chairman Paul Atherley, is proceeding with plans for a lithium refinery in the Northeast of England

Read full article from source: BBC

Major UK rare earths refinery scrapped in favour of US