Britain’s ambitions to become a critical minerals powerhouse have suffered a major setback after Pensana Plc abandoned its £250 million rare earth refinery project near Hull, opting instead to relocate operations to the United States, Sky News reported.
The proposed refinery at Saltend Chemicals Park was intended to process rare earth elements for use in electric vehicle motors and wind turbine magnets, creating 126 jobs and serving as the centerpiece of the UK’s 2022 Critical Minerals Strategy. The project had been promised millions in government funding — funding that was never disbursed as construction failed to begin.
Pensana’s chairman, Paul Atherley, said the move was driven by the Trump administration’s decision to guarantee purchases of rare earths from the US Mountain Pass mine at fixed prices — a level of state support he said Europe and the UK have failed to match.
“That’s repriced the market — and Washington is looking to do more of these deals, moving at an absolute rate of knots,” Atherley said. “Europe and the UK have been talking about critical minerals for ages. But when the Americans do it, they go big and hard, and make it happen. We don’t; we mostly just talk about it.”
The decision comes amid heightened geopolitical tensions and growing global competition for rare earth supply chains, as China — which produces about 90% of the world’s refined rare earth metals — tightens export restrictions. The announcement follows Beijing’s latest export curbs, which prompted President Donald Trump to threaten 100% tariffs on Chinese goods.
The Hull refinery was once touted as a flagship project for the UK’s green industrial transition. During the project’s 2022 groundbreaking, then–Business Secretary Kwasi Kwarteng described it as “the only facility of its kind in Europe,” promising it would “secure Britain’s supply resilience.”
However, Atherley said rare earth processing remains too complex, energy-intensive, and costly to be commercially viable in the UK, citing record-high industrial energy prices as a key obstacle.
Pensana continues to pursue lithium refining plans in Teesside through its related venture Tees Valley Lithium, which Atherley described as more feasible given current economics.
The move deals another blow to Britain’s chemicals and materials sector, already struggling with high energy costs and recent shutdowns, including the closure of Vivergo, a biofuels refinery located in the same industrial park.
A Department for Business and Trade spokesperson called the decision “disappointing” but acknowledged it was a commercial matter for Pensana.
“We will publish a new Critical Minerals Strategy soon to help secure our supply chains for the long term, and we’re reducing industrial electricity costs as part of our modern Industrial Strategy,” the department said.
