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Pensana, the company behind a rare earths mine project in Angola, has decided to abandon plans for a refinery in East Yorkshire. Instead of building the refinery at the Saltend Chemicals Plant near Hull as originally intended, the company will now seek investment in the United States. The $268m project, aimed at delivering raw materials by 2027, was expected to process these materials into metals used for powerful magnets in high-tech applications like electric vehicles, wind turbines, and robotics.
The decision to shift focus away from the UK comes after Pensana found it challenging to make the project economically viable without substantial government support. Despite the UK’s potential strategic foothold in the rare earths industry, which is primarily dominated by China, Pensana believes that China has been controlling prices in the market to stifle competition. Chancellor Rachel Reeves, looking to reduce reliance on Chinese rare earths, is working with G7 counterparts on a critical minerals strategy.
In comparison to the UK’s modest contribution of £5m towards the Saltend project, the US government has committed over half a billion dollars in investment and soft loans to MP Materials for a similar facility in California. Pensana’s founder and chairman, Paul Atherley, has expressed disappointment in the lack of government support in the UK. The company is now partnering with US refiner ReElement to establish a sustainable rare earth supply chain and is planning to list its shares on the Nasdaq stock exchange.
While Pensana remains optimistic about the UK, it has decided to pursue opportunities in the US to ensure a more feasible rare earth production process. Atherley’s involvement in another project, Tees Valley Lithium, highlights ongoing efforts to develop a lithium refinery in the Northeast. The Department for Business and Trade has acknowledged Pensana’s decision as a commercial one and is preparing to release a new Critical Minerals Strategy to secure long-term supply chains and support industrial businesses in the UK
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