MPA: Industrial Strategy positive but devil is in the detail
Mineral Products Association rues missed opportunity to take a more strategic approach to mineral supply
GOVERNMENT proposals to reduce industrial energy costs are vital to protect the competitiveness of UK producers, but the Industrial Strategy is a missed opportunity to take a more strategic approach to the UK’s domestic mineral supply, according to the Mineral Products Association (MPA).
Whilst the Industrial Strategy rightly classes construction, cement, concrete and asphalt as foundational industries, the MPA has expressed disappointment that this recognition has not been extended to their domestic supply chains, such as the essential aggregates needed for new homes, factories, laboratories, and energy and defence infrastructure, or the industrial minerals which are key to supporting manufacturing activity. It says there are significant challenges that need to be addressed in these industries that risk holding back the Government’s own ambitions for economic growth if left unaddressed, and this is a missed opportunity to tackle them.
According to the MPA, the Industrial Strategy also marks a continuation of successive governments’ piecemeal approach to raw materials. Whilst the Government has pledged to update its strategy for selected critical minerals, it has failed to commit to a comprehensive strategy for all essential domestic minerals. This includes construction aggregates and industrial minerals, which make up the vast majority of UK mineral extraction by volume, and underpin every major economic activity, from infrastructure to manufacturing. Without a strategic approach to secure long-term access to these resources, growing demand over the next decade could drive up costs, stall the delivery of national priorities – from housing and the energy transition, to defence and climate resilience – and ultimately constrain UK economic growth, says the MPA.
On electricity costs, the Industrial Strategy recognizes the issue of high industrial electricity costs in the UK compared with those faced by competitors in other advanced economies. Such high costs have impacted on the competitiveness of cement and lime producers and led to an increase in imports, particularly of cement. The MPA welcomes the commitment in the strategy to a series of positive measures to correct this, including increasing the Network Charging Compensation scheme from 60% to 90%, but says these changes will need to be made without delay in order to be maximally effective.
The MPA also welcomes the Government’s continued commitment to regulatory reform, including further efforts to improve regulator performance, streamline duties for regulators, and apply lessons from Defra’s Corry review across the regulatory landscape. According to the MPA, if applied correctly, these measures could help tackle unnecessary cost, delay, and uncertainty for businesses in the mineral products sector and across the economy.
Dr Diana Casey, executive director for energy and climate change at the MPA, commented: ‘The MPA has been calling for many years for action on energy costs, so it’s good news that the Government has decided to act to make UK industrial electricity prices more competitive. This is important if we are to ensure a secure supply of foundational materials, like cement and concrete, that are vital to realizing the Industrial Strategy, making sure that they can be produced here in the UK and protecting good, well-paid jobs for our communities.’
She continued: ‘It puts into action the Chancellor’s recent words – ‘where things are made, and who makes them, matters’. However, there are still some questions about how the proposed measures will apply in practice. It’s what we want to hear on energy prices but the proof will be in the delivery.’
Mark Russell, executive director of planning, mineral resources and marine aggregates at the MPA, added: ‘The Government has though, once again missed an opportunity to take a strategic view of the UK’s domestic mineral supply. Aggregates and industrial minerals are essential to delivering ministers’ ambitions – they must stop taking the supply of these materials for granted and start planning for their long-term security.’
