However, as demand for critical minerals increases to build the infrastructure required for the energy transition, accessing them through complex and volatile supply chains may become more unreliable.
This could hinder the United Kingdom’s ability to develop the technologies needed to help protect national security and technological competitiveness.
What can A&D companies do to help enhance the resilience of their supply chains and secure better access to these crucial metals and minerals?
From jets to satellites: the impact of supply disruptions
From F-35s and nuclear submarines to commercial aircraft, drones and satellites, manufacturing advanced technologies typically needs high purity and quality critical minerals. For example:
However, access to these minerals is usually through complex and volatile supply chains that are sometimes associated with environmental, social and governance (ESG) matters.
Much of this stems from the monopolies of supply. Critical minerals are extracted in a small number of often challenging jurisdictions, and only a handful of countries have built the capabilities to refine them to the quality required for advanced technologies. For example, just three nations control approximately three quarters1 of global cobalt, REE and lithium output.
Such challenges can make the supply chain vulnerable to disruptions from geopolitical events, extreme weather, trade disputes and malpractice, and managing them is often difficult due to a lack of visibility in the supply chain. Moreover, these risks may intensify as international competition for critical minerals increases, and supply chains struggle to adapt and expand to meet the six-fold2 increase in demand provoked by the energy transition by 2050.
The risk these challenges pose to the A&D sector was identified in the 2023 refresh of the Integrated Review of Security, Defence, Development and Foreign Policy.3 Securing access to critical minerals by resolving these supply chain challenges is a key pillar to developing ‘security through resilience.’
United Kingdom action to address supply chain disruptions
The United Kingdom has developed a critical minerals strategy to help secure a resilient and sustainable supply of critical minerals. This focuses on:
Progress is already being made – a domestic rare earth separation facility and lithium refinery is being developed to help diversify the supply chain.4 In addition, a New Task & Finish Group on Critical Minerals Resilience has been set up to help support UK industry and key manufacturers – including those in A&D – and to help develop resilience in their supply chains.5
Three key considerations to help build supply chain resilience
The time is now for A&D companies to consider how they can source a robust, responsible and sustainable supply of critical minerals. Here are three key things to consider:
To continue learning about critical minerals, what they could mean for global economies and how companies can respond to the challenges within their supply chain, check out Deloitte UK’s critical minerals article series.
Please get in contact with us to discuss how your organization can improve supply chain resilience to help secure better access to critical minerals
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