Britain’s hopes of becoming a critical minerals superpower have been dealt a severe blow after one of its leading companies abandoned its plans to build a rare earths refinery near Hull.

Pensana had pledged to build a £250m refinery on the banks of the Humber, to process rare earths that would have then been used to make magnets for electric cars and wind turbines.

The plant promised to create 126 jobs and was due to receive millions of pounds of government funding.

However, Sky News has learnt that Pensana has decided to scrap the Hull plant and will instead move its refining operations to the US.

Pensana’s chairman, Paul Atherley, said the company had taken the decision after the Trump administration committed to buying rare earths from an American mine, Mountain Pass, at a guaranteed price – something no government in Europe had done.

“That’s repriced the market – and Washington is looking to do more of these deals, moving at an absolute rate of knots,” he said.

“Europe and the UK have been talking about critical minerals for ages. But when the Americans do it, they go big and hard, and make it happen. We don’t; we mostly just talk about it.”

The decision comes at a crucial juncture in critical minerals and geopolitics. China produces roughly 90% of all finished rare earth metals – exotic elements essential for the manufacture of many technology, energy and military products.

Last week, Beijing imposed restrictions on the exports of rare earths, prompting Donald Trump to threaten further 100% tariffs on China.

Pensana had been seen as Britain’s answer to the periodic panics about the availability of rare earths. The site at Saltend Chemicals Park was chosen by the government to launch its critical minerals strategy in 2022.

Visiting for the official groundbreaking, the then business and energy secretary Kwasi Kwarteng said: “This incredible facility will be the only one of its kind in Europe and will help secure the resilience of Britain’s supplies into the future.”

He pledged a government grant to support the scheme. That grant was never received because Pensana never built its plant.

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Mr Atherley said he is optimistic about another project he’s involved with, to bring lithium refining to Teesside through another company, Tees Valley Lithium.

But, he said, rare earth processing is far more complex, energy-intensive and expensive, making it unviable in the UK, for the time being.

The decision is a further blow for Britain’s chemicals industry, which has faced a series of closures in recent months, including that of Vivergo, a biofuels refiner based in the same chemicals park where Pensana planned to locate its refinery.

Producers warn that Britain’s record energy costs – higher than most other leading economies – are stifling its economy and triggering an outflow of businesses.

The mastermind of a £5bn Chinese investment fraud was found with a device containing £67m of cryptocurrency in a secret pocket of her jogging bottoms when she was arrested after years on the run, a court has heard.

Prosecutors are setting up a compensation scheme after Yadi Zhang, 47, conned around 128,000 Chinese investors into fraudulent wealth schemes between 2014 and 2017.

Zhang, who is also known as Zhimin Qian, admitted money laundering charges after police discovered more than 61,000 Bitcoin, now worth more than £5bn, in digital wallets, in the UK’s biggest ever cryptocurrency seizure.

She arrived in the UK on a false St Kitts and Nevis passport in September 2017 before coming to the attention of police after trying to buy some of London’s most expensive properties.

Zhang vanished after police raided her £5m six-bedroom rented house near Hampstead Heath in north London in 2018, but was finally arrested in York last year.

In written legal arguments, Martin Evans KC representing the Director of Public Prosecutions Stephen Parkinson, said a ledger and passwords were found in a purpose-made concealed pocket in the jogging bottoms she was wearing.

She revealed the access code for two wallets during interviews in prison, leading investigators to cryptocurrency worth around £67m.

The stash has been added to the £5bn Bitcoin hoard, which has reportedly been earmarked by Chancellor Rachel Reeves to help plug the hole in the public finances.

The fortune is at the centre of a High Court battle between the UK government and thousands of Chinese victims, who want to recover their investment and say it should reflect the huge rise in the value of Bitcoin.

Law firm Fieldfisher, which is representing around 1,000 victims, said some have lost their life savings and many are old and vulnerable.

The court heard the DPP is also setting up a compensation scheme for the victims not represented in court, although no further details have been given.

The judge, Mr Justice Turner, will make orders on the case at a later date.

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Zhang pleaded guilty to charges of possessing criminal property and transferring criminal property on or before the 23 April 2024 last month and is in custody awaiting sentencing in November.

Jian Wen, 43, was jailed for six years and eight months last year after being found guilty of one count of money laundering between October 2017 and January 2022 relating to 150 Bitcoin, now worth around £12.5m.

Her trial heard that Wen, who previously worked in a Chinese takeaway, was not involved in the alleged fraud but acted as a “front person” to help disguise the source of the money.

The court heard how the two women travelled the world, spending tens of thousands of pounds on designer clothes, jewellery and shoes.

Seng Hok Ling, 47, is said to have replaced Wen as Zhang’s “butler”, organising helpers and booking Airbnbs, including in Scotland, for the fugitive while she was on the run.

Police found Zhang after carrying out surveillance of Ling and seized assets including encrypted devices, cash, gold and cryptocurrency.

Ling, a Malaysian national from Matlock in Derbyshire, pleaded guilty at Southwark Crown Court to entering into a money laundering arrangement with Zhang on or before 23 April 2024 and will be sentenced alongside her.

Prosecutors said Zhang masterminded a scam in China, before converting the money into cryptocurrency to get it out of the country.

The Government has vowed to pursue a company linked to Baroness Michelle Mone for millions of pounds paid for defective PPE at the height of the COVID pandemic after a High Court deadline passed without repayment.

Earlier this month, the High Court ruled that PPE Medpro, a company founded by Baroness Mone’s husband Doug Barrowman and promoted in government by the Tory peer, was in breach of contract and gave it two weeks to repay the £122m plus interest of £23m.

In a statement, the Health Secretary Wes Streeting said: “At a time of national crisis, PPE Medpro sold the previous government substandard kit and pocketed taxpayers’ hard-earned cash.

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“PPE Medpro has failed to meet the deadline to pay – they still owe us over £145m, with interest now accruing daily.”

It is understood that is being charged at a rate of 8%.

“We will pursue PPE Medpro with everything we’ve got to get these funds back where they belong – in our NHS,” Mr Streeting concluded.

Earlier a spokesman for Mr Barrowman and the consortium behind the company said the government had not responded to an offer from PPE Medpro to discuss a settlement.

“Very disappointingly, the government has made no effort to respond or seek to enter into discussions,” he said.

During the trial PPE Medpro offered to pay £23m to settle the case but was rejected by the Department of Health and Social Care.

While Mr Barrowman has described himself as the “ultimate beneficial owner” of PPE Medpro, and says £29m of profit from the deal was paid into a trust benefitting his family including Baroness Mone and her children, he was never a director and the couple are not personally liable for the money.

PPE Medpro filed for insolvency the day before Mrs Justice Cockerill’s finding of breach of contract was published, and the company’s most recent accounts show assets of just £666,000.

Court-appointed administrators will now be responsible for recovering as much money as possible on behalf of creditors, principally the DHSC.

With PPE Medpro in administration and potentially limited avenues to recover funds, there is a risk that the government may recover nothing while incurring further legal expenses.

In June 2020, PPE Medpro won contracts worth a total of £203m to provide 210m masks and 25m surgical gowns after Baroness Mone contacted ministers including Michael Gove on the company’s behalf.

While the £81m mask contract was fulfilled the gowns were rejected for failing sterility standards, and in 2022 the DHSC sued. Earlier this month Mrs Justice Cockerill ruled that PPE Medpro was in breach of contract and liable to repay the full amount.

Mr Barrowman has previously named several other companies as part of the gown supply including two registered in the UK, and last week his spokesman said there was a “strong case” for the administrator to pursue them for the money.

One of the companies named has denied any connection to PPE Medpro and two others have not responded to requests for comment.

Insolvency experts say that administrators and creditors, in this case the government, may have some recourse to pursue individuals and entities beyond the liable company, but any process is likely to be lengthy and expensive.

Julie Palmer, a partner at Begbies Traynor, told Sky News: “The administrators will want to look at what’s happened to what look like significant profits made on these contracts.

“If I was looking at this I would want to establish the exact timeline, at what point were the profits taken out.

“They may also want to consider whether there is a claim for wrongful trading, because that effectively pierces the corporate veil of protection of a limited company, and can allow proceedings against company officers personally.

“The net of a director can also be expanded to shadow directors, people sitting in the background quite clearly with a degree of control of the management of the company, in which case some claims may rest against them.”

A spokesman for Forvis Mazars, one of the joint administrators of PPE Medpro, did not comment other than to confirm the firm’s appointment.