Subsidised energy costs to make onshore production of key minerals more viable.

British battery metal refiners and electric car gigafactories are being handed cheap power deals by the Government as part of a battle to cut the West’s dependence on China. 

Companies will get the energy relief from next month with the aim being to boost domestic production of key minerals needed for wind turbines, electric cars and defence technologies, officials and executives say.

China has an iron grip on global refining, handling about 70pc of the world’s cobalt, 70pc of nickel, 60pc of battery-grade lithium and as much as 90pc for some rare earth elements. The Telegraph has the story.

But ministers want at least some of this production to be “onshored” in the UK in future, amid broader western fears that Beijing could threaten supplies during a geopolitical crisis. 

With high electricity costs seen as a major barrier, however, insiders said the new measures are designed to make Britain more competitive internationally. Officials also want to deter so-called carbon leakage, where goods are made abroad using more polluting processes and then simply imported here. 

It is understood that critical mineral refiners and battery factories are among those set to benefit from the relief, with the promise of the subsidies helping to seal significant investments.

One source familiar with the schemes said: “Helping to level the playing field on energy costs, and the added advantage of supplying green power for these new industries, really does start to shift the balance.”

One businessman behind two refinery operators in the North East said the subsidies had helped to ensure his development were viable.

Paul Atherley, chairman of Tees Valley Lithium and Pensana, which are building plants in Teesside and Humberside respectively, said the changes will cut the price his companies pay for energy from a quarterly average of 19 pence per kilowatt hour (kWh) to “single digits” in September.

Mr Atherley said: “The Government is keenly aware that they’re in competitive situations for locating these plants. 

“The competition is coming from Europe, North America, Saudi Arabia – people are offering incentives – but the UK is doing a good job in trying to keep and attract businesses like ours.

“There are two big incentives: one is freeports for chemical parks at Humber and Teesside, and the second is these power deals.”

The battery factory planned by Jaguar Land Rover’s parent in Somerset is also likely to qualify for support, it is understood.

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