UK Loses Rare Earths Refinery Project as Pensana Moves Investment to the US

Plans to build a major rare earths refinery in East Yorkshire have been dropped after Pensana decided to shift its focus and seek investment in the United States.

The project, planned for the Saltend Chemicals Plant near Hull, was meant to process raw materials from Pensana’s $268 million rare earths mine in Angola. Once operational in 2027, the mine will produce key minerals used to make powerful magnets for electric vehicles, wind turbines, and robotics.

The refinery would have given the UK a strategic position in the global rare earths market, which is currently dominated by China. However, Pensana says the economics no longer make sense without stronger government support.

Founder Paul Atherley explained that China’s market control has kept prices low, making refining in the UK unprofitable. The company received a £5 million grant from the UK government in 2022, but Atherley said it was “nowhere near enough.”

He compared the situation with the United States, where the government has provided over $500 million in funding and soft loans to similar projects, such as the one developed by MP Materials in California.

Pensana now plans to work with ReElement Technologies, a US-based refiner, to create a sustainable rare earth supply chain. It also intends to list its shares on the Nasdaq, a move expected to attract global investors.

Despite the setback, Atherley said he remains optimistic about the UK’s role in clean energy. His other venture, Tees Valley Lithium, continues to develop a lithium refinery in Northeast England to support the electric vehicle and battery industries.

The loss of the Saltend project, however, underscores growing concerns about the UK’s slow progress in securing critical minerals, as global competition for clean energy materials intensifies.