Storing more critical minerals within the UK could lead to 7.7 m sq ft of warehouse demand by 2035.
Critical minerals power almost every part of modern life, from lithium for batteries in smartphones and copper for renewable energy to cobalt for building jet engines and batteries for military drones. Recently announced rare earth export controls have highlighted the vulnerabilities of UK mineral supply chains. As a result, government is increasingly exploring strategic stockpiling to protect domestic industries from potential supply disruptions.
The UK Government’s Vision 2035: Critical Minerals Strategy sets out the intention for the UK to produce 10% of its needs domestically, identifying strategic stockpiling to establish resilience, while ensuring that the rest of our mineral needs are met by diversifying imports. Strategic stockpiling refers to the deliberate build-up of reserves to protect against supply chain disruption and ensure continuous supply, including using specialist storage facilities positioned between ports, mining operations and final manufacturing users. The sector in the UK is already working towards these objectives, but there will be further additional demand for warehousing, handling and transport services.
Many critical minerals are typically stored in foil-lined bags, steel drums or vacuum-sealed containers - usually stacked on pallets that can hold a tonne of minerals. Others, however, are stored in large drums outside of traditional buildings, which can utilise yard space and outdoor storage sites. When dealing with hazardous chemicals, UK Warehousing Association (UKWA) and Health and Safety Executive (HSE) guidance details that warehouses require extra spacing for aisles, fire safety spacing and segregation, meaning 40-50% effective utilisation. This translates to around 5 sq ft per tonne of minerals.
The Government’s technical annex provides demand estimates (in tonnes) for a range of key critical minerals to 2035. Combining this with the intention of producing 10% of the country’s need domestically, it’s projected that, by 2027, 1.8 million sq ft of warehouse space will be required to meet demand, increasing to 3.9 million sq ft and 7.7 million sq ft in 2030 and 2035, respectively.
Against a total UK warehouse inventory of 3.6 billion sq ft, the increase in demand isn’t expected to have a material impact at a national level. However, markets that are well placed to take advantage of this shift due to existing mining and recycling operations, such as Cornwall, Devon, Durham and the Scottish Central Highlands, may see an outsized demand benefit. Indeed, an extra 7.7 million sq ft of demand in Devon and Cornwall would mean inventory needs to rise by 15%; with vacancy rates in such markets remaining low due to a lack of development, occupiers may struggle to find suitable accommodation.
Several warehousing challenges must be overcome before storing critical minerals. These include controlling temperatures for those minerals that have sensitivity to humidity, minimising contact with air and moisture for those with high reactivity, and the hazardousness of handling minerals for distribution. Each of these challenges will require additional operational costs to ensure minerals are stored correctly.
Strengthening critical mineral security is essential in protecting the UK economy. Strategic stockpiling could create an entirely new category of logistics demand, supporting port-centric development and regional supply chain hubs in markets connected to the UK’s mining, recycling and manufacturing sectors.