UK Minerals Exporters to Get Financial Support from the Budget

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(Bloomberg) — UK companies that import essential minerals will be given a major financial boost in Chancellor Rachel Reeves’ Budget next week, in a bid to strengthen British industries and reduce their reliance on China.

Exporters of lithium, graphite and cobalt to be used in production in the UK will be given access to UK Export Finance, a national body that often helps British traders and their buyers with finance and insurance, people familiar with the matter said. They will only be eligible for support if they have long-term contracts with UK exporters, a move that would benefit the defence, aerospace, electric vehicle and renewable energy industries, they said, asking not to be named while discussing the measures to be announced in the October 30 budget.

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Western countries in recent years have been intensifying their efforts to obtain access to important minerals that are important for advanced manufacturing but are currently controlled by China. Reeves’ move next week will make it easier for UKEF to secure supplier finance contracts in mineral-rich Commonwealth countries, such as Australia, the people said. Prime Minister Keir Starmer hosted a series of bilateral meetings on trade and economic growth at the Commonwealth heads of government meeting in Samoa this week.

Reeves is preparing to unveil a package of tax rises and further borrowing in Labour’s first budget in 14 years. He wants to raise $40 billion ($52 billion) to help fund party priorities like the National Health Service and fill the funding gap he blames on his Conservative predecessors. Reeves has been discussing changing the debt ratio used to inform the country’s fiscal policy, freeing up around £50 billion of government spending on infrastructure.

While the government did not specify which companies it expects to benefit from the export funds, manufacturers such as aircraft engine maker Rolls Royce Holdings Plc are key users of imported steel, while India’s Tata Motors Ltd. build a battery factory in the southwest. England will need lithium supplies.

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Labor is also counting on attracting an influx of private investment to the UK to fuel the economy and stimulate the growth needed to generate more tax revenue. The government said it had raised $63 billion at its international investment conference earlier this month, although some of it had been previously committed.

On Friday in Samoa, Starmer revealed a further investment of £1 billion in the UK property market by Aware Super, an Australian fund and Delancey Real Estate. AustralianSuper, the country’s largest superannuation fund, is preparing and strengthening its global investment team in London, expecting to manage £250 billion in its London office by 2035, the UK government said in a statement.

Starmer held a business meeting with Australian chief executive Paul Schroder, Bank of America chairman Brian Moynihan and Lloyd’s of London chief John Neal in Samoa on Thursday.

—Courtesy of Mark Burton.

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