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).
The Industrial Strategy rightly classes construction, cement, concrete and asphalt as foundational industries, but MPA has expressed disappointment that this recognition has not 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. 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.
The Industrial Strategy also marks a continuation of successive governments’ piecemeal approach to raw materials. While 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.
On electricity costs, the Industrial Strategy recognises the issue of high industrial electricity costs in the UK compared to 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. 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%. These changes will need to be made without delay in order to be maximally effective.
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 MPA, if applied correctly, these measures could help tackle unnecessary cost, delay, and uncertainty for businesses in our sector and across the economy.
Dr Diana Casey, Executive Director, Energy and Climate Change at MPA comments: “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 realising the Industrial Strategy, making sure that they can be produced here in the UK and protecting good, well-paid jobs for our communities. 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, Planning, Mineral Resources & Marine Aggregates at MPA says:
“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.”
ENDS
About the Mineral Products Association:
The Mineral Products Association (MPA) is the trade association for the aggregates, asphalt, cement, concrete, dimension stone, lime, mortar and industrial sand industries. MPA is the sectoral voice for mineral products, covering 100% of UK cement and lime production, 90% of GB aggregates production, 95% of asphalt and over 60% of ready-mixed concrete and precast concrete production. In 2021, the industry supplied £22 billion worth of materials and services to the Economy. It is also the largest supplier to the construction industry, which had annual output valued at £178 billion. Industry production represents the largest flow of materials in the UK economy and is also one of the largest manufacturing sectors.
For media enquiries, contact Robert McIlveen at: Robert.McIlveen@mineralproducts.org ; tel: 07394 568782