The UK has joined a growing list of countries using their export credit agencies (ECAs) to gain an advantage in the global tussle over the supply of critical minerals.

UK chancellor Rachel Reeves announced that companies supplying critical minerals to UK exporters will be eligible to apply for a special credit guarantee from UK Export Finance (UKEF), helping them access financing from commercial lenders.

The product is targeting overseas sponsors of mining, processing, manufacturing and recycling projects which have a “long-term offtake contract” with a UK buyer, with UKEF noting it is likely to benefit projects in countries such as Australia, which have large deposits of critical minerals.

Western nations are scrambling to build supply chains for critical minerals, used in emerging technology including electric vehicles, solar panels and wind turbines, partly due to China’s dominance in their extraction and processing.

“There is intense global competition for critical minerals like lithium, tin and cobalt which are essential for industrial growth, British industries and our journey towards net-zero,” says business and trade secretary Jonathan Reynolds.

“As the energy transition pushes demand to new highs, this financing offer will help UK companies to get a seat at the table, build international partnerships and secure their critical mineral needs.”

In September a group of countries, including the G7 and European Union, said they planned to work together to mobilise private financing for critical minerals, including through co-operation between ECAs.

ECAs in countries such as Australia, South Korea and the US have also flagged possible support for several early-stage critical minerals projects.

UKEF says it expects to “work with other ECAs and public financial institutions to finance eligible projects and support investment into new supply routes”.

Kirsty Benham, chief executive officer of industry group the Critical Minerals Association, says in comments provided by UKEF that the initiative “supports UK manufacturers and supply chain security”.

“The offer demonstrates the importance of critical minerals to UK government and showcases the UK’s strengths as a serious buyer of these strategically important materials,” she adds.