Financing the Future of the UK’s Critical Minerals

The UK government has introduced a new financing guarantee designed to strengthen domestic capabilities in critical minerals and strengthen supply chain resilience for exporters.

UK Export Finance has launched the Critical Goods Export Development Guarantee, which could enable businesses supplying critical mineral products to access financing for long-term contracts and domestic investment.

The scheme targets UK-based suppliers whose products feed into export supply chains to reduce vulnerability to geopolitical pressures and concentrated global supply networks.

The Critical Goods Export Development Guarantee allows UK Export Finance to guarantee up to 80% of finance provided by commercial lenders to eligible UK companies or projects. This support covers businesses involved in producing or processing critical minerals for UK exporters, with the aim of encouraging the onshoring of key supply chain components and improving access to high-value financing.

Critical minerals are defined according to the UK's Critical Minerals Intelligence Centre list, though UK Export Finance retains scope to support additional minerals on a case-by-case basis.

To qualify, UK suppliers must maintain premises and employees in the UK and supply at least 50% of their critical mineral products to UK exporters. This threshold drops to 20% if at least 5% of annual turnover comes from overseas sales.

UK buyers receiving these products must be UK-based exporters, generating at least 20% of their UK turnover from exports either in the last financial year or on average over the last three years, and must also have premises and employees domestically.

All transactions must pass UK Export Finance's anti-bribery, corruption, environmental, social and human rights due diligence.

Tim Reid, CEO of UK Export Finance, explains: "The Critical Goods EDG marks a step forward in UKEF's mission to support UK exporters and strengthen our economy.

"By backing UK-based companies who are vital to our export supply chains, we're not just providing finance – we're helping to build a more secure foundation for UK businesses to compete globally."

Strategic context and 2035 targets

The guarantee follows the publication of Vision 2035: Critical Minerals Strategy, which establishes a 10-year plan to secure the minerals required for economic growth, national security and the clean energy transition.

The strategy recognises that domestic mining alone cannot meet rising demand for materials such as lithium, copper and rare earth elements.

According to the strategy, the UK aims to meet at least 10% of aggregate critical mineral demand from domestic production by 2035, with 20% from recycling.

The government has set a target to produce at least 50,000 tonnes of lithium annually and ensure no more than 60% of any one mineral comes from a single supplier country.

Government backing includes tools such as the National Wealth Fund, a new fund of up to £50 million for critical minerals and energy-cost support schemes for industry. The plan supports mining, refining and recycling projects domestically while addressing high energy costs, improving planning and permitting processes and tackling skills gaps across the value chain.

Practical application and industry response

A practical example demonstrates how the guarantee could function: a UK manufacturer supplying a metal alloy component containing critical minerals to the electric vehicle industry seeks a loan to build a large-scale production site.

Although the manufacturer is not an exporter, UK Export Finance could provide support because the manufacturer's clients export some of their electric vehicles. The 80% guarantee reduces the lender's risk, potentially enabling the loan.

Kirsty Benham, CEO at Critical Minerals Association (UK), says: "The Critical Goods EDG will be a key pillar for securing the UK's position in critical minerals supply chains.

"By supporting domestic capabilities alongside international partnerships, UKEF is helping to create a resilient infrastructure to compete effectively in global markets."

The Critical Goods Export Development Guarantee complements UK Export Finance's existing Critical Minerals Supply Finance, which provides finance for overseas companies with agreements to supply critical minerals products to UK exporters.

Together, these products represent a comprehensive approach to supporting both domestic capabilities and international supply chains, forming part of the government's Industrial Strategy commitment to strengthen critical sectors underpinning economic and national security.