[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
H.R. 2011, ``NATIONAL STRATEGIC AND CRITICAL MINERALS POLICY ACT''
AND H.R. 1314, ``RESOURCE ASSESSMENT OF RARE EARTHS ACT OF 2011''
=======================================================================
LEGISLATIVE HEARING
before the
SUBCOMMITTEE ON ENERGY AND
MINERAL RESOURCES
of the
COMMITTEE ON NATURAL RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
Friday, June 3, 2011
__________
Serial No. 112-39
__________
Printed for the use of the Committee on Natural Resources
Available via the World Wide Web: http://www.fdsys.gov
or
Committee address: http://naturalresources.house.gov
_____
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COMMITTEE ON NATURAL RESOURCES
DOC HASTINGS, WA, Chairman
EDWARD J. MARKEY, MA, Ranking Democrat Member
Don Young, AK Dale E. Kildee, MI
John J. Duncan, Jr., TN Peter A. DeFazio, OR
Louie Gohmert, TX Eni F.H. Faleomavaega, AS
Rob Bishop, UT Frank Pallone, Jr., NJ
Doug Lamborn, CO Grace F. Napolitano, CA
Robert J. Wittman, VA Rush D. Holt, NJ
Paul C. Broun, GA Raul M. Grijalva, AZ
John Fleming, LA Madeleine Z. Bordallo, GU
Mike Coffman, CO Jim Costa, CA
Tom McClintock, CA Dan Boren, OK
Glenn Thompson, PA Gregorio Kilili Camacho Sablan,
Jeff Denham, CA CNMI
Dan Benishek, MI Martin Heinrich, NM
David Rivera, FL Ben Ray Lujan, NM
Jeff Duncan, SC John P. Sarbanes, MD
Scott R. Tipton, CO Betty Sutton, OH
Paul A. Gosar, AZ Niki Tsongas, MA
Raul R. Labrador, ID Pedro R. Pierluisi, PR
Kristi L. Noem, SD John Garamendi, CA
Steve Southerland II, FL Colleen W. Hanabusa, HI
Bill Flores, TX Vacancy
Andy Harris, MD
Jeffrey M. Landry, LA
Charles J. ``Chuck'' Fleischmann,
TN
Jon Runyan, NJ
Bill Johnson, OH
Todd Young, Chief of Staff
Lisa Pittman, Chief Counsel
Jeffrey Duncan, Democrat Staff Director
David Watkins, Democrat Chief Counsel
------
SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES
DOUG LAMBORN, CO, Chairman
RUSH D. HOLT, NJ, Ranking Democrat Member
Louie Gohmert, TX Peter A. DeFazio, OR
Paul C. Broun, GA Madeleine Z. Bordallo, GU
John Fleming, LA Jim Costa, CA
Mike Coffman, CO Dan Boren, OK
Glenn Thompson, PA Gregorio Kilili Camacho Sablan,
Dan Benishek, MI CNMI
David Rivera, FL Martin Heinrich, NM
Jeff Duncan, SC John P. Sarbanes, MD
Paul A. Gosar, AZ Betty Sutton, OH
Bill Flores, TX Niki Tsongas, MA
Jeffrey M. Landry, LA Vacancy
Charles J. ``Chuck'' Fleischmann, Edward J. Markey, MA, ex officio
TN
Bill Johnson, OH
Doc Hastings, WA, ex officio
------
CONTENTS
----------
Page
Hearing held on Friday, June 3, 2011............................. 1
Statement of Members:
Hastings, Hon. Doc, a Representative in Congress from the
State of Washington........................................ 6
Prepared statement of.................................... 7
Holt, Hon. Rush D., a Representative in Congress from the
State of New Jersey........................................ 4
Prepared statement of.................................... 5
Lamborn, Hon. Doug, a Representative in Congress from the
State of Colorado.......................................... 1
Prepared statement of.................................... 3
Markey, Hon. Edward J., a Representative in Congress from the
State of Massachusetts..................................... 8
Prepared statement of.................................... 9
Statement of Witnesses:
Doebrich, Jeff L., Acting Mineral Resources Program
Coordinator, U.S. Geological Survey, U.S. Department of the
Interior................................................... 10
Prepared statement on H.R. 1314.......................... 12
Prepared statement on H.R. 2011.......................... 13
Duclos, Steven, Chief Scientist and Manager-Materials
Sustainability, General Electric, on behalf of National
Association of Manufacturers............................... 19
Prepared statement of.................................... 21
Engdahl, James B., President and Chief Executive Officer,
Great Western Minerals Group............................... 23
Prepared statement on H.R. 2011 and H.R. 1314............ 25
Sullivan, Dan, Commissioner, Alaska Department of Natural
Resources.................................................. 14
Prepared statement on H.R. 2011 and H.R. 1314............ 16
LEGISLATIVE HEARING ON H.R. 2011, ``NATIONAL STRATEGIC AND CRITICAL
MINERALS POLICY ACT'' AND H.R. 1314, ``RESOURCE ASSESSMENT OF RARE
EARTHS ACT OF 2011''
----------
Friday, June 3, 2011
U.S. House of Representatives
Subcommittee on Energy and Mineral Resources
Committee on Natural Resources
Washington, D.C.
----------
The Subcommittee met, pursuant to call, at 10:00 a.m. in
Room 1324, Longworth House Office Building, Hon. Doug Lamborn,
[Chairman of the Subcommittee] presiding.
Present: Representatives Lamborn, Thompson, Flores, Johnson
of Ohio, Hastings (ex officio), Holt, and Markey (ex officio).
Also present: Representative Johnson of Georgia.
STATEMENT OF HON. DOUG LAMBORN, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF COLORADO
Mr. Lamborn. The Committee will come to order. The Chairman
notes the presence of a quorum, which under Committee Rule 3[e]
is two Members. The Subcommittee on Energy and Mineral
Resources is meeting today for an oversight hearing to hear
testimony on H.R. 2011, National Strategic and Critical
Minerals Policy Act and H.R. 1314, Resource Assessment of Rare
Earths Act of 2011.
Under Committee Rule 4[f], opening statements are limited
to the Chairman and Ranking Member of the Subcommittee.
However, I intend to recognize full Committee Chairman Hastings
and Ranking Member Markey for opening statements, if they wish
to make one. In addition, I ask unanimous consent to include
any other Member's opening statement in the hearing record if
submitted to the clerk by close of business today. Hearing no
objection, so ordered.
I also ask unanimous consent that the gentleman from
Georgia, Mr. Johnson, who is not a member of the Natural
Resources Committee, but is involved in the legislation we will
be hearing today, be allowed to join us on the dais and ask
questions during this hearing. Without objection, so ordered.
Now I recognize myself for five minutes.
We are here today to focus on our nation's strategic and
critical minerals policy. For too long our national minerals
policy has been neglected. Today, as new energy development is
increasingly dependent on minerals that are less available, and
in some cases the object of a pure monopoly, we can no longer
afford to leave our domestic mineral needs on the back burner.
This is not the last hearing that this Committee will hold
to consider minerals issues or legislation. There are currently
more than a half dozen bills that impact mining and minerals
issues pending before the Subcommittee, and I expect that
before this Congress is over we will see more bills introduced,
considered, and likely passed by this Committee.
America is desperate for jobs. This is even clearer today
as we learn that job creation has plummeted in the face of
rising energy prices. May job creation was only 54,000 jobs,
pushing our unemployment rate back up. Americans everywhere are
desperate to get our economy running again and building a
stronger foundation of domestic mineral supply can be an
important aspect of rebuilding our economy.
Mining jobs pay better and have better benefits than nearly
any other rural community job. The Congressional Research
Service has repeatedly reported to the Committee that mining
jobs are the top paying, non-supervisory positions in the
country. Aren't these the sort of jobs that we want Americans
to have? Yet more domestic mining isn't just about the jobs in
the mines. There are thousands of geologists, biologists, and
environmental engineers. It is about the tens of thousands of
jobs in the industries that support our miners from the
Caterpillar factories in Illinois to Red Wing Boots in
Minnesota, from St. Pierre Chains in Worcester, Massachusetts
to Airflow Catalyst Systems in Rochester, New York.
Americans everywhere benefit from more domestic mining. The
two bills we are going to examine today call for reports from
the Department of the Interior to give us a better
understanding of resources. However, these two bills could not
be more different in their approaches. In many ways, they
represent the fundamental difference that appears too often
between those of us on this Committee.
H.R. 2011, the National Strategic and Critical Minerals
Policy Act will provide essential facts to help us strengthen
and improve our national mineral policy. Specifically, the bill
reiterates existing national mineral policy goals; directs the
Secretary of the Interior to coordinate a governmentwide
assessment of the nation's mineral resources, and availability
to meet current and future strategic and critical mineral
needs; requires the Secretary of the Interior to evaluate
factors impacting domestic mineral development, including
workforce, access, permitting, and duplicative regulatory
requirements; and identifies areas for improvement.
It directs the Interior Department to assemble the report
within six months, requires an annual progress report,
beginning one year after the date of enactment of the Act for
the following two years, outlining the progress made in
reaching the policy goals described in the bill and
accomplishes this goal with an authorization of $1 billion over
a two-year period.
H.R. 1314, the Resource Assessment of Rare Earths Act of
2011 directs the USGS, in cooperation with other foreign
geological surveys, to conduct a three-year comprehensive
international assessment of only rare earth elements, and it
does call for a three-year report at a cost of $10 million. So
there are elements in contrast between the two bills.
America is totally dependent on rare earth minerals today.
We are losing manufacturing, domestic jobs, and weakening our
economy every day because we don't have the supplies of
critical minerals necessary to develop our new technologies
here at home. Congress can and must act. Before the Committee
today, we have two approaches representing the responses of
Congress to these challenges. As the author of one of these
bills, I hope this hearing will help the American people
clearly judge the options before us in Congress and the plans
and policies that are put forward to solve the challenges
facing America.
I also want to recognize another Member from Colorado, my
friend and colleague, Representative Mike Coffman, who has been
working on the more narrow, but vital issue of rare earth
metals. He has some legislation already filed which has some
meritorious provisions in it that I can certainly support.
Developing our nation's mineral resources is not only an
integral part of an all-of-the-above energy plan, but it will
create long-term family wage jobs, stimulate our economy, and
reduce our foreign dependence on mineral resources.
Actually, before I recognize the Ranking Member, I want to
thank the witnesses for being here. You will be introduced
shortly. I appreciate your time and your availability for
questions from the members of the Subcommittee.
I now recognize Ranking Member Holt of New Jersey for five
minutes for his opening statement.
[The prepared statement of Mr. Lamborn follows:]
Statement of The Honorable Doug Lamborn, Chairman,
Subcommittee on Energy and Mineral Resources
We are here today to focus on our Nation's Strategic and Critical
Minerals Policy. For too long, our national mineral policy has been
neglected. Today, as new energy development is increasingly dependent
on minerals that are less available, and in some cases the object of a
pure monopoly, we can no longer afford to leave our domestic mineral
needs on the back burner.
This is not the last hearing that this Committee will hold to
consider minerals issues or legislation. There are currently more than
a half dozen bills that impact mining and minerals issues pending
before the Subcommittee, including a broader rare earth bill by my
colleague from Colorado, Mr. Coffman, and I expect that before this
Congress is over we will see more bills introduced, considered, and
likely passed by this Committee.
America is desperate for jobs. This is even clearer today as we
learn that job creation has plummeted in the face or rising energy
prices. May job creation was only 54,000 jobs, pushing our unemployment
rate back up. American's everywhere are desperate to get our economy
running again and building a stronger foundation of domestic mineral
supply can be an important aspect of rebuilding our economy. Mining
jobs pay better and have better benefits then nearly any other rural
community job. The Congressional Research Service has repeatedly
reported to the Committee that mining jobs are the top paying
nonsupervisory positions in the country. Aren't these the sort of jobs
that we want American's to have
Yet more domestic mining isn't just about the jobs in the mines,
its thousands of geologists, biologists, and environmental engineers,
it is about the tens of thousands of jobs in the industries that
support our miners. From the Caterpillar factories in Illinois to Red
Wing Boots in Minnesota, from St. Pierre Chains in Wooster, MA to
Airflow Catalyst Systems in Rochester, NY. American's everywhere
benefit from more domestic mining.
The two bills we are going to examine today call for reports from
the Department of the Interior to give us a better understanding of
resources.
However, these two bills could not be more different in their
approaches. In many ways, they represent the fundamental difference
that appears so often between those of us on this Committee.
H.R. 2011 the ``National Strategic and Critical Minerals Policy
Act'' will provide essential facts to help us strengthen and improve
our national mineral policy:
Specifically, the bill:
Reiterates existing National Mineral Policy goals;
Directs the Secretary of the Interior to coordinate a
government wide assessment of the Nation's mineral resources
and availability to meet current and future strategic and
critical mineral needs.
Requires the Secretary of the Interior to evaluate
factors impacting domestic mineral development, including
workforce, access, permitting and duplicative regulatory
requirements as well as identify areas for improvement.
Directs the Interior Department to assemble the
report within six months.
Requires an annual progress report, beginning one
year after the date of enactment of the Act for the following
two years, outlining the progress made in reaching the policy
goals described in the bill.
And accomplishes this goal with an authorization of
$1 million over a two year period.
H.R. 1314 the ``Resource Assessment of Rare Earths Act of 2011''
directs the United States Geological Survey (USGS), in cooperation with
other foreign geological surveys, to conduct a three-year,
comprehensive international assessment of only rare earth elements. But
it does all this while calling for a report to Congress in 3 years at a
cost of $10 million.
America is totally dependent on rare earth minerals today. We are
losing manufacturing, domestic jobs, and weakening our economy every
day because we don't have the supplies of critical minerals necessary
to develop our new technologies here at home.
Congress can and must act, and before the Committee today we have
two approaches representing the responses of Congress to these
challenges. As the author of one of these bills, I hope this hearing
will help the American people clearly judge the options before us in
Congress and the plans and policies that are put forward to solve the
challenges facing America.
Developing our Nation's mineral resources is not only an integral
part of an all-of-the-above energy plan but it will create long-term
family wage jobs, stimulate our economy and reduce our foreign
dependence on mineral resources.
I look forward to hearing from our witnesses today.
______
STATEMENT OF HON. RUSH D. HOLT, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF NEW JERSEY
Mr. Holt. Thank you, Chairman Lamborn and thank you for
continuing this important series of hearings.
Last week the Committee began exploring challenges that we
face with regard to critical and strategic materials, and I am
pleased that we are moving forward to look at some specific
legislation, including yours, to address them.
This is about the building blocks of our high-tech economy
from hybrid vehicles to smart phones to missile guidance
systems. A nation that wishes to compete in the modern world
and to provide the highest quality of life for its citizens
must have a reliable stream of critical materials and minerals.
I have joined with Representative Johnson, who I am pleased
is with us today, and Ranking Member Markey in cosponsoring one
of the bills under discussion today, the Resource Assessment of
Rare Earths Act, or what goes by the acronym the RARE Act. Our
understanding of rare earths and other critical mineral
deposits is still young and not highly developed, as I
understand it, especially compared to what we know about oil
and gas and other things that seem to preoccupy us.
Developing alternatives to Chinese rare earth supplies
begins with increasing our understanding of what resources are
available, where they are located, how they can be recovered
economically, which specific minerals we will need to meet
future industrial demand, what tradeoffs there are, and what
substitutions are available. I believe that the RARE Act does
take the right approach to finding these answers. I also concur
with some of the objectives in Mr. Lamborn's bill, the National
Strategic and Critical Minerals Policy Act.
Identifying overlapping or redundant requirements in the
permitting process certainly could be helpful in developing
critical minerals more expeditiously. I also appreciate the
attention the bill gives to Federal human resources. Recruiting
and retaining skilled scientists in the Federal workforce is
very important and it is a difficult challenge, especially with
many government branches expecting increasing numbers of
retirements in the coming years.
A couple of concerns, however, with this legislation.
Outside of the title, I don't see any focus on strategic and
critical minerals. There are 133 non-fuel minerals on which the
U.S. Geological Survey keeps statistics. This long list
includes clay, crushed stone, granite, sand and gravel, scrap
iron, et cetera. This bill would ask the Bureau of Land
Management to perform an assessment of all of those non-fuel
minerals on U.S. public lands and that is a vast undertaking. I
imagine that assessment alone would require more money and time
than the bill authorizes altogether. Yet, that is one of only
seven issues that the bill tasks to the Department of the
Interior for addressing.
Whether it is appropriate or not, these are lean budget
times and I do think we need to focus government resources on
the areas of greatest need. In my view, the greatest needs are
with rare earth minerals, or at least with some rare earth
minerals, and a select few other critical minerals like those
identified by the National Research Council, which we heard
about in a hearing a week ago.
So I hope to see the scope of this bill better directed. We
clearly have an opportunity with some of the ideas in both of
these bills to improve our understanding of critical and
strategic mineral resources as well as to give our domestic
industry a leg up in building a stronger supply chain.
I look forward to hearing from our witnesses. I am pleased
to see that the Chairman believes in recycling and has recycled
one of our witnesses from a day ago and I look forward to the
testimony. Thank you, Mr. Chairman.
[The prepared statement of Mr. Holt follows:]
Statement of The Honorable Rush D. Holt, Ranking Member,
Subcommittee on Energy and Mineral Resources
Thank you Chairman Lamborn for calling this important legislative
hearing today.
Last week, the committee began exploring the challenges we face
with regard to critical and strategic minerals. I am pleased that we
are moving forward to consider specific legislative proposals to
address them.
This issue is all about the building blocks of the high-tech
economy. From hybrid vehicles to iPhones to missile guidance systems, a
nation that wishes to compete in high-tech, value-added manufacturing
in the 21st Century must have a reliable source of critical minerals. I
have joined Ranking Member Markey and Representative Johnson in co-
sponsoring one of the bills under discussion today, the Resource
Assessment of Rare Earths Act or RARE Act.
Our understanding of rare earth and other critical mineral deposits
is still young, especially compared to what we know about oil and gas
resources and other minerals like copper and gold. Developing
alternatives to Chinese rare earth supplies begins with increasing our
understanding of what resources are available, where they are located
in economically minable concentrations, and which specific minerals we
will need to meet future industrial demand. I believe the RARE Act
takes the right approach in trying to find those answers.
I also concur with some of the objectives of the other bill under
consideration today, the National Strategic and Critical Minerals
Policy Act. Identifying overlapping or redundant requirements in the
permitting process could be helpful in developing critical minerals
more expeditiously. I also appreciate the attention the bill gives to
federal human resources. Recruiting and retaining skilled scientists in
the federal workforce is very important, especially with many
government branches expecting increasing numbers of retirements in the
coming years.
I do have concerns about this bill, however. Outside of the title,
I do not see any focus on strategic and critical minerals. There are
133 non-fuel minerals on which the U.S. Geological Survey keeps
statistics, including clay, crushed stone, granite, sand and gravel,
and scrap iron. This bill would ask the Bureau of Land Management to
perform an assessment of all of those non-fuel minerals on U.S. public
lands. That is a vast undertaking. I imagine that assessment alone
would require more money and time than the bill authorizes. Yet that is
only one of the 7 issues that the bill tasks the Interior Department
with addressing. Whether it is appropriate or not, these are lean
budget times, and I do think we need to focus government resources on
the areas of greatest need. And in my view, the greatest needs are with
rare earth minerals and a select few other critical minerals like those
identified by the National Research Council, which we heard about in
the hearing last week. So I would hope to see the scope of this bill
narrowed.
We clearly have an opportunity with some of the ideas in these
bills to broaden our understanding of critical and strategic mineral
resources as well as give our domestic industry a leg up in building
stronger supply chains that are less vulnerable to supply disruptions.
I look forward to hearing from the witnesses on the best path
forward in doing that. Thank you.
______
Mr. Lamborn. By the gentleman from Alaska only making one
trip here, there is a smaller carbon footprint.
Now I am honored to recognize the Chairman of the full
Natural Resources Committee, Doc Hastings of Washington, for
five minutes for his opening statement.
STATEMENT OF HON. DOC HASTINGS, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF WASHINGTON
Mr. Hastings. Thank you very much, Mr. Chairman. Thank you
for holding this hearing and thank you once again for the
courtesy of allowing me to participate.
Too often the importance of our mineral resources gets
overlooked. We all understand the need for fuel and
electricity, but many Americans don't recognize or appreciate
the need for minerals. Minerals are not only the building
blocks of the earth, but are indispensable to our health,
economy, technology, renewable energy, national defense, and
quality of life.
From cars to shampoos, computers to telephones, there is
likely not a moment in the day that we don't use a product that
is made from minerals. Even renewable and alternative energy is
dependent on minerals. Wind turbines, for example, are made
from zinc. Solar panels require silicone and titanium, and
nuclear energy is made from uranium. This is why minerals are
so vital to achieving an all-of-the-above energy plan in
creating new jobs.
We have vast mineral resources here in the United States,
including critical rare earth elements. The USGS recently
released a report that revealed that 13 million metric tons of
rare earth elements are known within deposits within 14 states.
However, it makes no difference what our domestic supplies are
if we are unable to harness and mine those minerals.
As is the case with many of our resources, unfortunately,
we are failing to adequately produce minerals here at home, in
part, due to permitting delays and bureaucratic obstacles. As a
result, we are increasingly dependent on foreign nations for
our critical and essential mineral needs.
As the Chairman just noted, China holds 97 percent of
critical rare earth elements and their threat of tightening the
supplies puts our economic and national security in jeopardy.
The United States cannot remain economically competitive if we
continue to be left to the mercy of foreign countries for our
critical minerals. The United States cannot remain economically
competitive if we continue to send American jobs overseas.
H.R. 2011, authored by Chairman Lamborn, the National
Strategic and Critical Minerals Policy Act of 2011, lays the
groundwork for a fundamental change in the United States'
mineral policy. The bill would require a governmentwide survey
of our national mineral resources and assess our nation's
ability to meet our own strategic and critical mineral needs.
The bill also requires the Secretary of the Interior to
identify factors that are hindering domestic mineral
development, such as the lack of access and redundant
regulatory requirements, and outlines areas for the improvement
in those areas.
So I believe this bill is an important first step toward
increasing our domestic mineral production, creating by
inference good paying American jobs, and reducing our
dependence on foreign minerals, and as a result strengthen our
national security.
So with that, Mr. Chairman, thank you for your courtesy and
I yield back my time.
[The prepared statement of Mr. Hastings follows:]
Statement of The Honorable Doc Hastings, Chairman,
House Committee on Natural Resources, on H.R. 2011 and H.R. 1314
Thank you, Subcommittee Chairman Lamborn for holding this
legislative hearing today.
Too often, the importance of our mineral resources gets overlooked.
We all understand our need for fuel and electricity, but many Americans
don't fully recognize or appreciate the need for minerals.
Minerals are not only the building blocks of the wealth, but are
the indispensible to our health, economy, technology, renewable energy,
national defense and quality of life.
From shampoos to cars, computers and telephones, there is likely
not a moment in the day when we don't use a product that is made from
minerals.
Even renewable and alternative energy is dependent on minerals.
Wind turbines are made with zinc, solar panels require silicon and
titanium, and nuclear energy is made from uranium. This is why minerals
are vital to achieving an all-of-the-above energy plan and creating new
American jobs.
We have vast mineral resources here in the United States, including
critical rare earth elements. The USGS released a report last year
revealing 13 million metric tons of rare earth elements within known
deposits in 14 states. However, it makes no difference what our
domestic supplies are if we're unable to harness and mine those
minerals.
As is the case with many of our resources, we are failing to
adequately produce minerals here at home, in part, due to permitting
delays and bureaucratic obstacles. As a result, we are increasingly
dependent on foreign nations for our critical and essential mineral
needs.
China holds 97% of critical rare earth elements, and their threat
of tightening supplies puts our economic and natural security in
jeopardy.
The United States cannot remain economically competitive if we
continue to be left to the mercy of foreign countries for their
critical minerals.
And the United States cannot remain economical competitive if we
continue to send American jobs overseas.
H.R. 2011, the National Strategic and Critical Minerals Policy Act
of 2011, lays the groundwork for a fundamental change in the United
States' mineral policy.
The bill would require a government-wide survey of our national
minerals resources and assess our Nation's ability to meet our own
strategic and critical mineral needs.
The bill also requires the Secretary of the Interior to identify
factors that are hindering domestic mineral development, such as lack
of access and redundant regulatory requirements and outline areas for
improvement.
I believe this bill is an important first step towards increasing
our domestic mineral production, create good-paying American jobs,
reducing our dependence on foreign minerals and strengthening our
national security.
______
Mr. Lamborn. Thank you. I now want to recognize the full
Natural Resources Committee Ranking Member, Ed Markey of
Massachusetts for five minutes for his opening statement.
STATEMENT OF HON. EDWARD MARKEY, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF MASSACHUSETTS
Mr. Markey. Thank you, Mr. Chairman very much.
Rare earths are a group of 17 elements with unique
properties that are becoming extremely important for high-tech
manufacturing. Yet, I imagine that besides our resident
scientist, Mr. Holt, most of us couldn't name a single rare
earth element. But rather than trying to remember names like
terbium or erbium or dysprosium or neodymium let us just call
them all ``importium'' because that's what we are doing.
[Laughter.]
Mr. Markey. We are importing them because we haven't done
the research. We are importing them because we haven't invested
in domestic supply chains. All these materials that are vital
to the defense sector and vital to high-growth industries like
clean energy, we have to import all of them from China. This is
not a wise strategy, and I sense that we are coming around to a
bipartisan agreement on that.
The Natural Resources Committee, with our jurisdiction over
the United States Geological Survey, has a very important role
to play in developing solutions to the critical minerals
challenge. That is why Mr. Holt and I have worked very closely
with Mr. Johnson of Georgia in crafting H.R. 1314, the Resource
Assessment of Rare Earths Act of 2011, or the RARE Act. I am
pleased the Subcommittee is holding this hearing today to take
a closer look at it.
The RARE Act tasks the USGS with conducting a focused,
global assessment of rare earth mineral resources and potential
supply sources in coordination with other national geological
surveys. Since the prevalence of different rare earth elements
can vary greatly, depending on the deposit, the USGS assessment
would identify and quantify supplies of each rare earth element
individually. It would also identify other potential issues
relating to the full supply chain of rare earth mining and
processing to produce end use products.
Importantly, the legislation requires the USGS to evaluate
other critical minerals beyond rare earths as well as the
likelihood and impacts of any potential supply restrictions.
The long-term success of American manufacturing depends on
maintaining an edge and producing high-tech, innovation-
oriented goods. Without a reliable supply of the key ingredient
like rare earth minerals, these industries and workers will be
vulnerable to the predatory trade practices of China.
I believe that the research called for under the RARE Act
will dramatically enhance our understanding of critical mineral
reserves and help establish reliable supplies of critical
minerals for U.S. industry. That is why the bill has been
endorsed by the U.S. Magnetic Materials Association.
The bill is quite simple. It just requires a reporting
requirement for the U.S. Geological Survey to give us some of
the information we need to better understand the rare earth
mineral resources that we have here in the United States. I do
think that there is a difference between some of the rare earth
minerals that are so critical to America's high-tech leadership
and more prosaic minerals like cooper that are pretty widely
available and don't have the same significance.
So I think by dividing the question we focus in on what has
become a central issue, especially in our relationship with
China. I yield back the balance of my time.
[The prepared statement of Mr. Markey follows:]
Statement of The Honorable Edward J. Markey, Ranking Member,
Committee on Natural Resources
Rare earths are a group of 17 elements with unique properties that
are becoming extremely important for high-tech manufacturing. Yet, I
imagine that besides our resident scientist--Mr. Holt--most of us
couldn't name a single rare earth element!
But rather than trying to remember names like terbium, europium,
dysprosium, or neodymium, we should just call all of them
``importium.'' Because that's what we're doing! We're importing `em
because we haven't done the research. We're importing `em because we
haven't invested in domestic supply chains. All these materials that
are vital to the defense sector and vital to high-growth industries
like clean energy, we have to import all of them from China!
This is not a wise strategy, and I sense that we're coming around
to bi-partisan agreement on that.
The Natural Resources Committee, with our jurisdiction over the
United States Geological Survey, has a very important role to play in
developing solutions to the critical mineral challenge.
That is why I have worked very closely with Mr. Johnson of Georgia
in crafting H.R. 1314, the ``Resource Assessment of Rare Earths Act of
2011'' or RARE Act. I am pleased the Subcommittee is holding this
hearing today to take a closer look at it.
The RARE Act tasks the USGS with conducting a focused global
assessment of rare earth mineral resources and potential supply sources
in coordination with other national geological surveys. Since the
prevalence of different rare earth elements can vary greatly depending
on the deposit, the USGS assessment would identify and quantify
supplies of each rare earth element individually.
It would also identify other potential issues relating to the full
supply chain of rare earth mining and processing to produce end-use
products. Importantly, the legislation requires the USGS to evaluate
other critical minerals beyond rare earths, as well as the likelihood
and impacts of any potential supply restrictions.
The long-term success of American manufacturing depends on
maintaining an edge in producing high-tech, innovation-oriented goods.
Without a reliable supply of the key ingredients, like rare earth
minerals, these industries and workers will be vulnerable to the
predatory trade practices of China.
I believe that the research called for under the RARE Act will
dramatically enhance our understanding of critical mineral reserves,
and help establish reliable supplies of critical minerals for U.S.
industry. That is why the bill has been endorsed by the U.S. Magnetic
Materials Association. That is why the bill was included in the
Democratic ``Make It in America'' legislative package. And that is why
I am proud to join Mr. Johnson in sponsoring it.
I thank the Chairman for calling this hearing and I look forward to
hearing the views of our witnesses here today.
______
Mr. Lamborn. Thank you.
Now I would like to introduce the witnesses who are already
seated. We have four today. Jeff L. Doebrich, Mineral Resources
Program Coordinator [Acting] for the U.S. Geological Survey,
Department of the Interior accompanied today by Marcilynn
Burke, Deputy Director of the Bureau of Land Management. The
Honorable Dan Sullivan, Commissioner of the Alaska Department
of Natural Resources, Steve Duclos, Chief Scientist and Manager
of Minerals Sustainability for General Electric on behalf of
the National Association of Manufacturers, and James B.
Engdahl, President and CEO of Great Western Mineral Group..
Thank you all for being here. Like all of our witnesses,
your full testimony will appear in the hearing record, so I ask
you to keep your oral statements to five minutes as outlined in
the invitation letter to you.
Our microphones are not automatic, so you have to push the
button when you start your testimony. The lights are structured
so that after four minutes, the yellow light will come on, and
after five minutes the red light comes on.
Mr. Doebrich, you may begin.
STATEMENT OF JEFF L. DOEBRICH, MINERAL RESOURCES PROGRAM
COORDINATOR, ACTING, U.S. GEOLOGICAL SURVEY, U.S. DEPARTMENT OF
THE INTERIOR
Mr. Doebrich. Good morning, Mr. Chairman and members of the
Subcommittee. Thank you for the opportunity to appear before
you today.
In my opening statement, I will briefly discuss both of
these important bills. I would like to introduce Marcilynn
Burke, Deputy Director, Bureau of Land Management who is here
to respond to any questions on the BLM-related provisions of
H.R. 2011.
H.R. 2011 requires the Secretary of the Interior, through
the BLM and the USGS, to assess the capability of the United
States to meet the demands for minerals essential to
manufacturing competitiveness and economic and national
security. It requires the Secretary to assess the non-fossil
fuel potential of lands under the jurisdiction of the BLM and
the U.S. Forest Service and to identify anticipated mineral
requirements, current sources of these minerals, implications
of shortages, timelines for mineral development projects on
public lands, and the cost of litigation as well as an
assessment of the Federal workforce and its ability to meet the
challenges of the critical minerals issue.
H.R. 2011 requires far-reaching analysis of data spanning
the jurisdictions of the Departments of the Interior,
Agriculture, Defense, Commerce, and Justice as well as the
Office of Personnel Management. The administrative time and
cost of this work would likely exceed the 180 days and $1
million authorized by the legislation.
H.R. 2011 identifies some important goals and we appreciate
the opportunity to work with the Committee and the other
affected agencies to take into account these resource
considerations. We also would like to work with the Committee
on language clarifying the minerals under consideration.
H.R. 1314, the Resource Assessment of Rare Earths Act,
outlines a reasonable approach to properly assess the global
endowment of rare earth resources to identify potential future
supplies and to better understand future potential sources
needed for U.S. industry. The Department of the Interior
supports the goals of H.R. 1314, although we note that the
activities called for are within the scope of existing
Department of the Interior authorities.
The USGS is responsible for conducting research and
collecting data on a wide variety of non-fuel mineral
resources, including rare earths. We conduct research to
understand the geologic processes that concentrated known
mineral resources at specific localities in the Earth's crust,
and to estimate quantities, qualities, and areas of
undiscovered mineral resources.
We collect, analyze, and disseminate data information on
current production and consumption for about 100 mineral
commodities, both domestically and internationally. This full
spectrum of mineral resource science allows for a comprehensive
understanding of the complete life cycle of mineral resources
and materials--resource formation, discovery, production,
consumption, use, recycling and reuse. It allows for an
understanding of environmental issues of concern throughout the
life cycle.
Global demand for rare earths is estimated to be increasing
at a rate of about 8 percent per year due to increasing
applications and consumer products--computers, automobiles,
aircraft, and other advanced technology products. Production of
rare earths is currently highly concentrated in China, which is
restricting its exports of rare earth element raw materials.
The ability of the rest of the world to replace supply from
China depends on the quality of known global rare earth element
resources and the degree to which those resources have been
explored and evaluated. The USGS has recently completed an
inventory of known domestic rare earth reserves and resources.
This study reviews current U.S. consumption and imports of rare
earths, current knowledge of domestic resources, and
possibilities for future domestic production. The report also
includes an overview of known global rare earth resources and
discusses the reliability of alternative foreign sources.
The USGS stands ready to fulfill its role as the sole
Federal provider of unbiased mineral resource research on known
rare earth resources, assessment of undiscovered rare earth
resources, and information on domestic and global production
and consumption for use in analyzing the global supply chain.
Thank you, Mr. Chairman, for the opportunity to present the
views of the Department. I will be happy to answer any
questions you or the other Members may have.
[The prepared statement of Mr. Doebrich follows:]
Statement of Jeff L. Doebrich, Acting Mineral Resources Program
Coordinator, U.S. Geological Survey, U.S. Department of the Interior,
on H.R. 1314
Good morning, Mr. Chairman and Members of the Subcommittee. Thank
you for the opportunity to appear before you today to discuss H.R.
1314, directing the Secretary of the Interior, acting through the
Director of the U.S. Geological Survey (USGS), to conduct a global
assessment of rare earth element resources. The Department of the
Interior supports the goals of this bill, although we note that the
activities called for in H.R. 1314 are within the scope of existing
Department of the Interior authorities.
The USGS is responsible for conducting research and collecting data
on a wide variety of nonfuel mineral resources, including rare earths
(RE). Research is conducted to understand the geologic processes that
concentrated known mineral resources at specific localities in the
Earth's crust and to estimate (or assess) quantities, qualities, and
areas of undiscovered mineral resources, or potential future supply.
USGS scientists also conduct research on the interactions of mineral
resources with the environment, both natural and as a result of
resource extraction, to better predict the degree of impact that
resource development may have on human and ecosystem health. USGS
mineral commodity specialists collect, analyze, and disseminate data
and information that document current production and consumption for
about 100 mineral commodities, both domestically and internationally
for 180 countries. This full spectrum of mineral resource science
allows for a comprehensive understanding of the complete life cycle of
mineral resources and materials--resource formation, discovery,
production, consumption, use, recycling, and reuse--and allows for an
understanding of environmental issues of concern throughout the life
cycle.
Global demand for RE is estimated to be increasing at a rate of
about 8 percent per year due to increasing applications in consumer
products, computers, automobiles, aircraft, and other advanced
technology products. Much of this demand growth is driven by new
technologies that increase energy efficiency and decrease reliance on
fossil fuels. Production of RE is currently highly concentrated in
China, which is restricting its exports of rare-earth-element raw
materials; China currently produces 97 percent of the world's rare
earths, although 20 years ago the United States was the world's leading
rare-earths producer. The ability of the rest of the world to replace
supply from China depends on the quality of known global rare earth
element resources and the degree to which those resources have been
explored and evaluated.
To begin the process of understanding potential sources of RE
supply, the USGS has recently completed an inventory of known domestic
RE reserves and resources (Long and others, 2010). This study restates
basic geologic facts about RE relevant to assessing domestic security
of supply and reviews current U.S. consumption and imports of RE,
current knowledge of domestic resources, and possibilities for future
domestic production. The report also includes an overview of known
global RE resources and discusses the reliability of alternative
foreign sources of RE.
The logical next steps are to (1) update a global inventory of rare
earth resources published by the USGS in 2002 (Orris and Grauch, 2002),
(2) review principal RE deposits outside of China and evaluate their
geologic, economic, and development potential, and (3) conduct a global
assessment of undiscovered RE resources. H.R. 1314, the RARE Act of
2011, outlines a reasonable approach to properly assess the global
endowment of RE resources, to identify potential future supplies of RE
resources, and to better understand future potential sources of RE
needed for United States industry..
The USGS maintains a workforce of geoscientists (geologists,
geochemist, geophysicists, and resource specialists) with expertise in
critical minerals and materials, including RE. The USGS continuously
collects, analyzes, and disseminates data and information on domestic
and global RE reserves and resources, production, consumption, and use.
This information is published annually in the USGS Mineral Commodity
Summaries (USGS, 2011) and includes a description of current events,
trends, and issues related to RE supply and demand.
The USGS stands ready to fulfill its role as the sole federal
provider of unbiased mineral resource research on known RE resources,
assessment of undiscovered RE resources, and information on domestic
and global production and consumption of RE resources for use in global
RE supply chain analysis. We note, however, that the activities called
for in H.R. 1314 are already authorized by existing authorities. Any
study conducted to fulfill the objectives of the bill will require
substantial resources and would need to compete with other
Administration priorities.
Thank you, Mr. Chairman, for the opportunity to present the views
of the Department on H.R. 1314. I will be happy to answer any questions
you or the other Members may have.
References Cited
Long, K.R., Van Gosen, B.S., Foley, N.K., and Cordier, Daniel, 2010,
The principal rare earth elements deposits of the United
States--A summary of domestic deposits and a global
perspective: U.S. Geological Survey Scientific Investigations
Report 2010-5220, 96 p. Available at http://pubs.usgs.gov/sir/
2010/5220/
Orris, G.J., and Rauch, R.I., 2002, Rare earth element mines, deposits,
and occurrences: U.S. Geological Survey Open-File Report 2002-
0189, 174 p. Available at http://pubs.usgs.gov/of/2002/of02-
189/
USGS, 2011, Mineral Commodity Summaries 2011, p. 128-129 http://
minerals.usgs.gov/minerals/pubs/commodity/rare_earths/mcs-2011-
raree.pdf)
______
Statement submitted for the record by the U.S. Department of the
Interior on H.R. 2011, National Strategic and Critical Minerals Act of
2011
Thank you for inviting the Department of the Interior to testify on
H.R. 2011, the National Strategic and Critical Minerals Act of 2011.
The Department recognizes the need for a coherent policy concerning
minerals essential to manufacturing, economic well-being and security,
and economic competitiveness. Because H.R. 2011 was just introduced on
May 26, 2011, the Department has not had time to conduct an in-depth
analysis of the proposal, but we appreciate the opportunity to provide
testimony at this time. Consequently, we offer a more general
discussion of this important issue at this time and look forward to
working further with the Committee on H.R. 2011.
Background
The Department of the Interior is our nation's largest landowner
with jurisdiction over 20 percent of the land mass of the United States
and 1.75 billion acres of the Outer Continental Shelf. The BLM
administers over 245 million surface acres of public land-more than any
other Federal agency in the United States. Most of this land is located
in the 12 Western states, including Alaska. The BLM also manages 700
million acres of sub-surface mineral estate throughout the nation. The
public lands produce commodities that are key to the Nation's economy,
and can help provide economic stability and growth for local and
regional communities.
The development of energy and mineral resources are among the
multiple uses for which the BLM manages lands and resources for the
benefit of the public. The BLM manages mineral development under a
number of different authorities including the Federal Land Policy and
Management Act, the Mineral Leasing Act, the Materials Act of 1947, and
the General Mining Act of 1872. Each of these authorities along with
BLM regulations and guidance provide a legal framework for the
development of minerals.
The Administration supports the development of federally owned
natural resources in an environmentally protective manner that ensures
a fair return to the taxpayer. Therefore, the 2012 Budget includes a
proposal to improve the return to taxpayers by instituting a leasing
process under the Mineral Leasing Act of 1920 for new leases on certain
minerals (gold, silver, lead, zinc, copper, uranium, and molybdenum)
currently covered by the General Mining Law of 1872. The Budget also
includes a proposal to reduce the environmental impacts of coal and
hardrock mining by dedicating and prioritizing funds to reclaim
abandoned mines on Federal and non-Federal lands.
The USGS is responsible for conducting research and collecting data
on a wide variety of nonfuel mineral resources, including rare earths
(RE). Research is conducted to understand the geologic processes that
concentrated known mineral resources at specific localities in the
Earth's crust and to estimate (or assess) quantities, qualities, and
areas of undiscovered mineral resources, or potential future supply.
USGS scientists also conduct research on the interactions of mineral
resources with the environment, both natural and as a result of
resource extraction, to better predict the degree of impact that
resource development may have on human and ecosystem health. USGS
mineral commodity specialists collect, analyze, and disseminate data
and information that document current production and consumption for
about 100 mineral commodities, both domestically and internationally
for 180 countries. This full spectrum of mineral resource science
allows for a comprehensive understanding of the complete life cycle of
mineral resources and materials--resource formation, discovery,
production, consumption, use, recycling, and reuse--and allows for an
understanding of environmental issues of concern throughout the life
cycle.
H.R. 2011
H.R. 2011 requires the Secretary of the Interior--through the BLM
and the USGS--to assess the capability of the United States to meet the
demands for minerals essential to manufacturing competitiveness and
economic and national security. It requires the Secretary to produce a
report to Congress that includes an assessment of the non-fossil-fuel
mineral potential of lands under the jurisdiction of the BLM and the
U.S. Forest Service within 180 days of enactment. The report also must
identify anticipated mineral requirements, current sources of these
minerals, implications of shortages, timelines for mineral development
projects on public lands, and the cost of litigation. In addition, the
report must include an assessment of the Federal workforce and its
ability to meet the challenges of the critical minerals issue.
H.R. 2011 requires far-reaching analysis of data spanning the
jurisdictions of the Departments of the Interior, Agriculture, Defense,
Commerce, and Justice as well as the Office of Personnel Management. As
introduced, H.R. 2011 would entail much more than the development of a
report, likely requiring the development and implementation of data
tracking systems and a commitment of staff resources to gather, input,
analyze, and update the data. The administrative time and cost of this
work would likely exceed the 180 days and $1 million authorized by the
legislation. H.R. 2011 identifies some important goals, and we
appreciate the opportunity to work with the Committee and the other
affected agencies to take into account these resource considerations.
We also would like to work with the Committee on language clarifying
the minerals under consideration.
Conclusion
Thank you for the opportunity to testify here today and I would be
glad to take your questions.
______
Mr. Lamborn. Thank you so much.
I would like to hear now from Commissioner Sullivan.
STATEMENT OF HON. DAN SULLIVAN, COMMISSIONER, ALASKA DEPARTMENT
OF NATURAL RESOURCES
Mr. Sullivan. Good morning and thank you, Mr. Chairman.
Representative Holt, thank you as well for the opportunity to
testify before the Committee again. I have never been referred
to as a recycled witness, but I think I will take the
compliment. So thank you for that.
Mr. Holt. We are happy to have you.
Mr. Sullivan. OK.
Mr. Holt. You are a good witness.
Mr. Sullivan. My name is Dan Sullivan. I am the Alaska
Commissioner of the Department of Natural Resources. DNR
manages one of the largest portfolios of oil, gas, minerals,
renewable land and water in the world. I am also a former
Attorney General of the State of Alaska and a former U.S.
Assistant Secretary of State with responsibilities over global
energy, economic and finance issues.
Mr. Chairman, I have submitted extensive written testimony,
including this pamphlet from the Department of Natural
Resources. Hopefully, you have had the opportunity to see this
and we hope that the Committee finds this useful.
In many ways, my testimony this morning will cover themes
that are similar to my testimony yesterday on oil- and gas-
related issues in Alaska.
First, our country faces significant security challenges
due to our lack of production and processing of certain
strategic minerals, including rare earth elements. Second,
Alaska can and should be an important component of a national
policy to address our strategic vulnerabilities. Why? Because
we have world-class deposits of many of these minerals. Pages
2, 3 and 7 of my written testimony, and the table in the
pamphlet, summarize resource estimates of Alaska's critical
strategic minerals. We rank in the top ten in the world with
regard to many of these minerals in terms of our reserves.
Third, Alaska is undertaking a comprehensive strategy to
more fully assess, produce, and hopefully process these
minerals. Alaska Governor Sean Parnell highlighted this in his
State of the State speech this last January and our efforts
include a statewide assessment of rare earths and other
strategic minerals, which we have already begun significant
infrastructure investments and significant permitting reform.
Fourth, we are doing this while maintaining very strong
protections for our environment, which is a hallmark of
responsible resource development in Alaska. Fifth and finally,
we are seeking a partnership with the Federal Government to
support and enhance our efforts. On this last point, from
Alaska's view, we are off to a constructive start. Governor
Parnell has written President Obama and Secretary Chu on the
importance of working together on these issues. I and other
state officials in Alaska have had productive discussions with
White House officials and other Administration officials.
But time is of the essence. Working together, we need to
take concerted action on a number of fronts. First, we would
welcome additional support on our statewide assessment. The
State of Alaska and the USGS have a long history of working
very well together and we would welcome additional support,
input, and coordination on our statewide assessment efforts.
Second, and this is critical, Mr. Chairman, we must reform
our Federal permitting system, which ranks at the bottom of
major mining economies for timely processing. Permitting a
major mine project in the U.S. takes on average seven to ten
years. In Australia, that number is about one to two years. In
Alaska, we had a particularly egregious case with the
Kensington Gold Mine, which took almost 20 years to permit.
Third, we need access to highly perspective Federal lands,
once they are viewed as such, that are currently off limits to
mining. Fourth, we must work to incentivize additional research
and processing capability within the United States. Simply
mining minerals in the U.S. only to have them processed
overseas still leaves our country vulnerable and foregoes
important value-added economic benefits.
The bills that are the subject of today's hearing, the RARE
Act of 2011 and the Critical Minerals Policy Act as well as
Senator Mikulski's Senate bill 1113, all focus in one form or
another on these issues, which is why the State of Alaska
supports these bills. But we once again stress the urgency of
the situation and need for coordinated action.
Thank you. I look forward to your questions.
[The prepared statement of Mr. Sullivan follows:]
Statement of The Honorable Dan Sullivan, Commissioner,
Department of Natural Resources, State of Alaska
I. Introduction: America's Strategic Mineral Challenge
Chairman Lamborn, Ranking Member Holt, and members of the House
Subcommittee on Energy and Mineral Resources, on behalf of Governor
Sean Parnell, the State of Alaska welcomes this opportunity to testify
about issues of such importance to Alaska and our country. We are eager
to share with the U.S. Congress and the Obama Administration that
Alaska has the potential to deliver domestic sources of strategic
minerals to the nation. More specifically, we want to demonstrate to
this committee and the rest of your colleagues in Congress the vital
role Alaska can play in enhancing America's long-term security,
expanding American employment, and growing the economy by delivering
domestically produced and processed strategic minerals to the U.S.
marketplace.
Today's testimony includes a pamphlet from the State of Alaska on
an overview on rare earth elements and Alaska's significant potential
regarding these and other strategic minerals.
Biographical Information
Before getting into substantive matters, I would like to briefly
mention my professional background as it pertains to this testimony. I
have been serving as commissioner of the Alaska Department of Natural
Resources (DNR), a state agency of over 1,100 personnel, since December
2010. Under the Alaska Constitution, my primary responsibility as the
DNR commissioner is to maximize the development of the state's
resources in a manner that furthers the public interest. DNR manages
one of the largest portfolios of oil, gas, minerals, renewable, land,
and water resources in the world, including approximately 100 million
acres of uplands, 60 million acres of tidelands, shore lands, and
submerged lands, and 40,000 miles of coastline.
Prior to my appointment as DNR commissioner, I served as the Alaska
Attorney General and as the U.S. Assistant Secretary of State for
Economic, Energy, and Business Affairs under Secretary of State
Condoleezza Rice. I am also a United States Marine, having served on
active duty and in the reserves as an infantry officer since 1993.
II. Alaska is a Storehouse of America's Strategic Mineral Wealth
Alaska also has much to offer the nation in the effort to secure a
stable domestic supply of minerals. In 2010, the value of Alaska's
total mineral ore exports was $1.3 billion, with exports to China,
Japan, Canada, Korea, and Spain. Over $200 million was spent by
companies exploring in Alaska. This production is the tip of the
iceberg; estimates of Alaska's mineral wealth potential are staggering:
Coal: 17% of the world's coal; 2nd most in the world
Copper: 6% of the world's copper; 3rd most in the
world
Lead: 2% of the world's lead; 6th most in the world
Gold: 3% of the world's gold; 7th most in the world
Zinc: 3% of the world's zinc; 8th most in the world
Silver: 2% of the world's silver; 8th most in the
world
Rare earth elements: over 150 occurrences
Despite this enormous resource potential, Alaska is the most under-
explored region for mineral deposits in North America, and is
considered highly prospective with regard to strategic and critical
minerals, including Rare Earth Elements (REEs) needed for domestic use.
III. Alaska is Well Positioned to Meet the Nation's Strategic Mineral
Challenges
Strategic minerals, such as Rare Earth Elements, are becoming
increasingly critical to our nation's economic well-being and security.
China possesses an estimated 48% of the world's proven resources of
REEs and is the dominant global supplier with nearly 97% of the world's
production. Recent curtailment of REE exports from China and reliance
on the Chinese industry for processing and manufacturing critical REE-
reliant products has heightened awareness of the fragility of the
supply-demand chain for REEs worldwide. Given China's virtual control
of the market, it is clearly in our nation's best interest to establish
a stable domestic supply of REEs.
Alaska can become a new, stable source of REEs for the nation.
Alaska is by far the most under-explored U.S. state for mineral
deposits and is considered highly prospective with regard to strategic
and critical minerals needed for domestic use. Our vast land base is
thought to contain at least 70 known areas with documented potential to
host REE deposits and over 40 million acres of high mineral potential
lands.
Alaska contains one of the most significant REE prospects in the
U.S.: the Bokan Mountain/Dotson Ridge property. The property is
currently ranked 15th in North America for total tonnage of contained
rare earth metal oxides. But unlike other U.S. deposits, Bokan Mountain
is enriched in yttrium, dysprosium, and critical Heavy REEs, which are
essential for the production of permanent magnets in some of our
country's most important industries and products.
IV. The State of Alaska is Taking a Leadership Role in Facilitating
Domestic Production of Strategic Minerals
In Alaska Governor Sean Parnell's State of the State Address in
January 2011, he stated:
If we want our economy to become even more dynamic, we must
also look to our untapped resources. [R]are earth minerals are
of increasing importance in the world economy. These rare earth
elements are used in almost every piece of electronic equipment
you can think of; flat screen TVs, iPods, cell phones, aircraft
radar systems, and much, much more. Today, our Pacific Rim
neighbor, China, controls 97 percent of the world market for
these rare earth elements. Recently, China imposed trade quotas
and increased tariffs on these precious commodities. And, China
announced it is substantially reducing access to these rare
earth elements. These policies will cost Americans more of our
hard-earned money and jeopardize national security. We cannot
afford to rely on foreign sources to meet our nation's demand.
And you know what; there may be no reason to. Alaska is a
storehouse of rare earth minerals. Let's explore them. That's
why this year we should work together to fund a strategic
assessment of these minerals to determine, once again, how
Alaska can help meet America's needs.
As the Governor's remarks indicate, the State of Alaska is focused
on advancing Alaska's capacity to develop our strategic minerals for
the nation's benefit. We are undertaking the following interrelated
actions:
First, the state is undertaking a statewide assessment of REEs and
other strategic minerals potential to better understand the extent of
REE resources in Alaska. The state will gather data and improve
industry access to these data to encourage and facilitate private-
sector investment in Alaska's REE exploration and development. The
Alaska state legislature recently appropriated, pursuant to Governor
Parnell's request, $500,000 to begin a statewide survey of state,
federal, and native lands. We have already begun Phase I of this
strategic minerals assessment.
Second, the state is providing support for the development of known
or highly prospective REE and other strategic mineral occurrences
throughout Alaska by exploring potential infrastructure improvements
that could spur development, such as roads, port facilities, and power
sources. The state legislature recently appropriated approximately $75
million in bonding authority for infrastructure projects that will
advance mining development and roughly $1.5 million for studies to
construct a road to the highly prospective Ambler mining district.
State economic development agencies also are actively engaged with the
private sector on developing long-term financing for important
resource-related infrastructure projects.
Third, the state is improving the structure and efficiency of its
permitting process in order to expedite mineral development, including
development of REEs and other strategic minerals. The state has gone to
great lengths to improve its permitting process for mineral
development. The state's large project permitting team is viewed as a
model for signal point of contact coordination for efficient
permitting. Nevertheless, there are still many permitting challenges,
especially with the interplay between state, federal, and local
regulatory processes. The state is therefore taking an aggressive
approach to working with all levels of government to further refine and
streamline permitting. The Governor's budget request of more than $4
million for permitting reform was recently approved by the state
legislature.
Fourth, the state is deepening its partnership and cooperation with
stakeholders, including the federal government, local governments,
Native corporations, and other potential new entrants to encourage
domestic exploration, development, and processing of REEs and other
strategic minerals. Improving these relationships is imperative for the
country, not just Alaska. In Alaska, REEs are likely to be found on
state, federal, and private (Native) lands, thus establishing a strong
partnership with these entities will be critical to the initiative's
success. The state is planning with the University of Alaska an
important conference that will bring together all stakeholders to
discuss REEs and strategic minerals.
Finally, the state needs to attract new investment and needs new
markets for its abundant mineral resources. To achieve this goal, the
state is promoting its mineral resource wealth to the rest of the
country and overseas markets by discussing, for example, our resource
base, our favorable fiscal structure, our robust environmental
protections, and how we partner with industry to assist in the
exploration and development of strategic mineral resources.
V. Alaska Supports Federal Efforts to Enhance Domestic Development of
Strategic Minerals
The federal government will play a critical role in the development
and processing of strategic minerals in Alaska and other states. The
State of Alaska has been seeking a close working relationship with the
federal government on these issues. In particular, Governor Parnell has
recently sent letters to President Obama and Secretary Chu to
strengthen the state's partnership with the federal government to
facilitate the development of REEs and strategic materials in Alaska.
In his letters, the Governor made the following requests:
that the Administration direct the United States
Geological Survey partner with the state to conduct an
inventory of federal lands in Alaska
that the Administration improve federal permitting by
having high ranking mangers from federal agencies with decision
making authority coordinate early and often with each other,
permit applicants, and state agencies
that the Administration use the University of
Alaska's Arctic Region Supercomputing Center for REE research
and development
that Congress review the merits of amending existing
federal statutes to allow the Department of Energy to provide
loan guarantees, grants, and tax credits for the general mining
and processing of REEs.
Alaska therefore supports federal legislation that will increase
domestic production and processing of strategic minerals. The State of
Alaska appreciates the opportunity to provide comment on the Critical
Minerals Policy Act of 2011 and the Rare Earths Act of 2011 and
endorses the underlying principles of these Acts. The state supports
these bills, and Senator Murkowski's Senate Bill 1113, which seek to
promote a stable supply of minerals to maintain our nation's economic
well-being, security, and manufacturing, industrial, and technological
capabilities.
Increase Federal Mineral Assessments
The state supports the Critical Minerals Policy Act of 2011 and the
Rare Earths Act of 2011 requirement that the Department of the Interior
conduct a comprehensive assessment of the nation's strategic minerals.
Federal assessment of mineral commodities on federally managed land has
been significantly reduced to date and no complete resource assessment
of federal lands in Alaska has been completed. For example, the BLM
disbanded their solid minerals group in Alaska in 2007 despite the fact
that Alaska has 40 million acres of high mineral potential state and
private land.
Nonetheless, the State of Alaska lacks sufficient information to
fully assess the mineral potential in most areas of Alaska, which is
why the state is preparing a first-level study of our 70 known areas of
REEs. The state has already spent over $10 million on mineral
assessment work on some of these lands, including 10.6 million acres of
high resolution geophysics and 5.2 million acres of geologic mapping,
and as noted above will be spending another $500,000 on a new
assessment of REEs. Any federal assistance to further this effort will
advance the country's ability to develop a secure and domestic supply
of strategic minerals.
Enhance Access to Federal Lands
Even preliminary assessments in Alaska indicate that many of
Alaska's strategic mineral resources will be found on federal lands.
Indeed, Bokan Mountain is one prospect on federal lands. Therefore, it
is important to increase the availability of access to federal lands
for mineral development when assessments of such lands indicate high
prospectivity.
In addition, as a part of the assessment, the federal government
should review why these lands were withdrawn and provide a
determination of whether the withdrawal is still appropriate. This is
particularly important in Alaska because approximately 165.4 million
acres of the total 215 million federally owned acres in Alaska have
been withdrawn from mineral entry (or 82%).
Undertake Federal Permitting Reform
The state also applauds the Critical Minerals Policy Act of 2011
call for the federal government to improve coordination efforts among
federal agencies and to ``minimize duplication, needless paperwork, and
delays in the administration of Federal and State laws and regulations,
and issuance of permits and authorizations necessary to explore,
develop, and produce minerals and construct and operate mineral-related
facilities.''
Changes to the permitting system are particularly needed because
the U.S. has received low rankings for difficult permitting of mineral
development. The federal mine permitting system in the United States
ranks as least efficient or timely among 25 mining countries, requiring
an average time frame of seven to ten years to deliver a permit. This
compares to Australia where permits are often issued in one to two
years. A particularly egregious example of federal permitting delays is
the Kensington Gold Mine in Southeast Alaska, which took almost 20
years to permit. The State of Alaska successfully intervened in
litigation to help secure the necessary permits for this mine. The
Kensington Mine is now in operation, producing significant quantities
of gold, and employing hundreds of Alaskans.
Alaska has gone to great lengths to make its permitting system one
of the most robust and efficient in the nation, but we can only improve
so much without similar improvements the federal side. We have
initiated measures to reform and streamline our permitting process, and
continue to seek improvements and efficiencies, and we are partnering
with new entrants to encourage private sector exploration, including at
the Bokan Mountain REE deposit.
For these reasons, the state encourages federal efforts at
permitting reform because permitting uncertainty and delay are stifling
development. The State of Alaska has developed a coordinated permitting
system that has evolved and worked well over the last 20 years. Our
system ensures that all state agencies are working well together
throughout the lengthy and complex permitting processes for all large
resource development projects in the state. The federal agencies have
no analogous system. We therefore recommend that the federal agencies
adopt a coordination model similar to Alaska's. A strong federal
coordinator would not only ensure that the federal agencies are working
well together during permitting, but would help establish an
experienced permitting team within the federal agencies. Strong
coordination would also help the federal agencies develop new
procedures that could make permitting more efficient, such as better
synchronization between the EIS process and ACOE 404 permitting.
Establish Incentives for Domestic Processing and Research
Even if the United States increases domestic production of
strategic minerals and REEs, we still lack a sufficient industrial base
for processing these minerals. For example, if U.S. REE production were
to begin next year, the processing of these minerals would have to take
place in China. Thus, it is critical to develop domestic processing
capability in conjunction with the production of strategic minerals and
REEs.
Domestic processing capabilities will go hand-in-hand with a
renewed effort expanding America's research capability. The Department
of Energy's world-class laboratories could expand their focus on the
development and domestic processing of these strategic minerals in
partnership with universities and the private sector. Given how
vulnerable we are to a shortage of these minerals and critical
importance to our national security and economy, a renewed federal
research effort on strategic minerals and REEs is appropriate.
______
Mr. Lamborn. Thank you. Mr. Duclos.
STATEMENT OF STEVEN DUCLOS, CHIEF SCIENTIST AND MANAGER,
MATERIALS SUSTAINABILITY, GENERAL ELECTRIC, TESTIFYING ON
BEHALF OF NATIONAL ASSOCIATION OF MANUFACTURERS
Mr. Duclos. Chairman Lamborn, Ranking Member Holt, and
members of the Subcommittee, thank you for the opportunity to
testify before you today about rare earth and critical
minerals.
My name is Steven Duclos, and as Chief Scientist and
Manager of Material Sustainability at GE Global Research, it is
my job to identify ways that our businesses can manage our
minerals in a sustainable way. GE is a board member of the
National Association of Manufacturers, NAM, and I am pleased to
testify on their behalf today.
The NAM is the nation's largest manufacturing trade
association, representing manufacturers in every industrial
sector and in all 50 states. Manufacturing has a presence in
every congressional district, providing good, high-paying jobs.
The United States manufacturing economy produces 1.6 trillion
in value each year or 11.2 percent of GDP. It employs nearly 12
million Americans.
Minerals play a fundamental role in manufacturing.
Manufacturers use critical minerals such as the rare earths to
produce many products. As an example, GE uses at least 70 of
the first 83 elements on the Periodic Table, including rare
earth minerals in production of energy efficient florescent
lighting, in permanent magnets for our most advanced wind
turbines, in compressor motors for our oil and gas business, in
medical imaging technologies, and in coatings for aircraft
engines and power generation turbines.
Chairman Lamborn, I commend you for convening this hearing
today to discuss the issue of rare earth and other critical
minerals. I would like to share with you the NAM's policy in
regards to rare earths minerals and outline a series of
recommendations for how the Federal Government can strengthen
its support for industry in this area. The NAM's core policy is
that U.S. manufacturers require access to basic inputs in the
manufacturing process in order to become and remain competitive
in the global economy.
Foremost, the NAM believes that any solution to the
critical minerals issue needs to be comprehensive and take into
consideration the following multiple efforts that are necessary
to resolve the shortage of these minerals. First, the Federal
Government should play a vital role in strengthening the
domestic rare earths minerals supply chain. Such a domestic
supply chain can make U.S. manufacturers stronger and more
competitive. For example, manufacturers are supportive of
legislation that allow for the reopening of mines and
processing plants in the United States. We believe that this is
a great first step.
Second, there needs to be support of a workforce that can
carry out this mining and processing. A legislative effort
should include workforce assessment, curriculum development,
and worker training. Without this workforce, the U.S. will not
be able to mine these minerals in a safe and environmentally
sound manner.
Third, comprehensive legislation needs to address the issue
of technology development, particularly for the heavy rare
earth elements. These elements currently are not mined in
sufficient quantities domestically to meet growing demands. In
those cases where affordable alternative materials may be
available, an important solution for these heavy rare earths is
to provide manufacturers incentives to develop technologies
that either reduce or eliminate the use of these elements.
The Federal Government can help by enabling public/private
collaborations that provide the materials understanding and
resources to develop these technologies. This also includes
voluntary development of manufacturing technologies that more
efficiently use these materials.
Fourth, is the development of recycling technologies that
extract these elements from both end-of-life products and
manufacturing yield loss. This includes developing technologies
that assure the parks and systems that contain these minerals
have as long a life as possible.
Mr. Chairman, these are the basic principals, which we the
NAM believe are necessary to address the shortage of rare earth
minerals and other critical elements. However, it is imperative
to note that each element is different and some problems are
easier to solve than others. Typically, a unique solution will
be needed for each element and each use of that element.
Therefore, comprehensive legislation must also take into
consideration and propose solutions that are applicable to
real-life manufacturing and system design.
In regards to H.R. 1314 and H.R. 2011, Chairman Lamborn and
Congressman Johnson, we thank you for your efforts in
introducing these measures. We believe that it is important to
have legislation by Congress that mandates a comprehensive
approach that takes into account domestic mining and processing
of these minerals, strengthening of the workforce, government
incentives for creating alternative manufacturing and materials
technologies, and recycling of these materials so that we can
truly address the current issues with rare earth minerals.
I thank you for the opportunity to describe the NAM's
policy on rare earth and critical materials. I look forward to
your questions.
[The prepared statement of Mr. Duclos follows:]
Statement of Dr. Steve Duclos, Chief Scientist and Manager of Material
Sustainability, General Electric Global Research, on behalf of the
National Association of Manufacturers, on H.R. 2011 and H.R. 1314
Chairman Lamborn, Ranking Member Holt and members of the
Subcommittee on Energy and Mineral Resources, thank you for the
opportunity to testify before you today about rare earth and critical
minerals.
My name is Dr. Steven Duclos, and I am the Chief Scientist and
Manager of Material Sustainability at General Electric Global Research.
At GE, we have more than 35,000 scientists and engineers working in the
U.S. and around the globe, with extensive expertise in materials
development, system design, and manufacturing. As Chief Scientist and
Manager of Material Sustainability at GE Global Research, it's my job
to understand the latest trends in materials and to help identify and
support new R&D projects with our businesses to manage our needs in a
sustainable way.
GE is a diversified global infrastructure, finance, and media
company that provides a wide array of products to meet the world's
essential needs. From energy and water to transportation and
healthcare, we are driving advanced technology and product solutions in
key industries central to providing a cleaner, more sustainable future
for our nation and the world.
GE is also a board member of the National Association of
Manufacturers (NAM) and is pleased to testify on their behalf today.
The NAM is the nation's largest manufacturing trade association,
representing manufacturers in every industrial sector and in all 50
states. Manufacturing has a presence in every single congressional
district providing good, high-paying jobs. The United States is the
world's manufacturing economy. It produces $1.6 trillion in value each
year or 11.2 percent of GDP, and employs nearly 12 million Americans
working directly in manufacturing.
Manufacturers use minerals, in some cases, rare earth minerals, to
create a number of products. For instance, GE uses the following rare
earth minerals in production of the following products:
A) GE Lighting utilizes Cerium, Terbium, and Europium in
synthesizing efficient phosphors for fluorescent lamp products,
which are critical in the Department of Energy's transition
from inefficient incandescent lamps.
B) GE Energy uses Neodymium, Samarium, Dysprosium, and Terbium
in permanent magnets for compact and efficient generators in
GE's most advanced 2.5 MW wind turbines.
C) GE also uses permanent magnets in technology prototypes for
traction motors for our hybrid locomotives, high-speed motors
and generators for aviation applications, high speed motors for
turbo-expanders, high power density motors for PHEVs and EVs,
ultra high-efficiency industrial motors, as well as compressor
motors for GE Oil and Gas business.
D) GE Healthcare uses rare earth materials for scintillators
in both Computed Tomography (CT scan) and Positron Emission
Tomography (PET scan) health imaging technologies.
E) GE Aviation uses small quantities of rare earth permanent
magnet materials for defense technologies in guidance systems.
F) Small amounts of rare earths are used in materials and
coatings in aircraft engines and power generation turbines.
Minerals play an essential part in manufacturing. As an example, GE
uses at least 70 of the first 83 elements listed in the Periodic Table
of Elements. GE also spends $40 billion annually on materials, with 10%
devoted to direct purchase of metals and alloys. Because materials are
so fundamental to everything manufacturers do, we are constantly
watching, evaluating and anticipating supply changes with respect to
materials that are vital to the manufacturing process.
Chairman Lamborn, I commend you for convening this hearing today to
discuss the issue of rare earth and other critical minerals. What I
would like to do now is to share with you the NAM's policy in regards
to rare earth minerals, as well as outline a series of recommendations
for how the federal government can strengthen its support of the
industry in this area.
The NAM's core policy is that U.S. manufacturers require access to
basic inputs to the manufacturing process in order to become and remain
competitive in the global economy. The NAM opposes government policies
and practices that unfairly limit the availability and raise the cost
of such inputs, thereby reducing the competitiveness of U.S.
manufacturers. With that said, the NAM believes that first and
foremost, any solution needs to be comprehensive and to take into
consideration the multiple efforts that are necessary to resolve the
shortage of these minerals in the manufacturing supply chain.
As you know, the United States was at one point a global leader in
providing rare earth minerals. However, as the mining and processing of
these minerals were economically intensive, U.S. mining and processing
has ceased. However, over the past years demand for some of these
minerals has continued to increase. Current mining and processing will
not be able to keep up with this demand. In addition, a shortage of
these minerals can increase the cost of energy for manufacturers as
they are used in refining petroleum as well as in renewable energy
products. Therefore, the U.S. should resume its mining and processing
of these minerals.
Strengthening Domestic Supply Chain and Workforce
First, the federal government should play a vital role in
strengthening the domestic rare earth minerals supply chain. By
strengthening our domestic supplies we will have a more diversified
supply chain for these minerals and this will help make U.S.
manufacturers stronger and more competitive. Manufacturers are
supportive of legislation that increases domestic supply. For example,
legislation that re-opens mines and processing plants in the United
States would be an excellent first step.
Second, there needs to be support for a workforce that can carry
out mining and processing. Therefore, a legislative effort should
include workforce assessment, curriculum development and worker
training. This is a vital element for re-opening mining and processing
of any critical minerals, including rare earth minerals. Without the
necessary workforce, the U.S. will not be able to mine these minerals
in a safe and environmentally sound manner. Therefore, in order to
truly secure manufacturers' access to these vital minerals, the U.S.
needs to provide a domestic source of mining and processing of these
minerals.
Alternative Technologies
Furthermore, comprehensive legislation needs to address the issue
of heavy rare earth elements. These elements cannot currently be mined
in sufficient abundance domestically to meet manufacturers' growing
demands. An important solution for the shortage of these heavy rare
earth minerals, in those particular cases where affordable alternative
materials may be available, is to provide manufacturers incentives to
develop technology that either reduces or eliminates the use of these
elements. This includes the voluntary development of manufacturing
technologies that more efficiently use these materials.
While there are cases where the properties imparted by the element
are uniquely suitable to a particular application, there are examples
where a manufacturer is able to invent alternative materials or use
already existing alternate materials to minimize mineral shortage
risks. Manufacturers may be able to overcome the shortage of these
minerals by using alternatives that will provide them more flexibility
in designing their products. However, pursuing this path is not easy
and presents significant challenges that need to be addressed. As such,
the federal government can help by enabling public-private
collaborations that provide both the materials understanding and the
resources to attempt higher risk approaches. Both are required to
increase manufacturers' chances of success in minimizing the use of
those heavy rare earth elements.
Recycling Efforts
Another approach to minimizing the use of at-risk elements over the
long term is to develop recycling technologies that extract these
elements from both end-of-life products and manufacturing yield loss.
This includes developing technologies that assure that parts and
systems that contain these minerals have as long a life as possible.
For instance, designing a product that can be serviced will reduce the
need for replacing parts that will use additional materials. The basic
understanding of those practices and designs that limit the life of
products can be critical to extending the useful life of parts,
particularly those exposed to extreme conditions. It is these parts
that tend to be made of the most sophisticated materials, oftentimes
containing scarce raw materials.
Mr. Chairman, these are the basic principles which we, the NAM,
believe are necessary to address the shortage of rare earth minerals
and other critical elements. However, it is imperative to note that
each element is different and some problems are easier to solve than
others--typically a unique solution will be needed for each element and
each use of that element. Therefore, a comprehensive legislation must
also take into consideration the varying degrees of manufacturing, and
propose solutions that are applicable to real-life manufacturing and
system design.
Comments on H.R. 1314 and H.R. 2011
In regards to H.R. 2011 and H.R. 1314, we thank you for your
efforts in introducing these measures. As per my testimony today,
manufacturers rely on these minerals for the creation of a number of
products and sources of energy. Therefore, we welcome Congressional
actions that not just draw attention to the issue, but attempt to
resolve it was well.
We believe that it is important to have some form of legislation by
Congress that mandates a solution that is comprehensive and
incorporates those solutions highlighted above. It is only through a
comprehensive solution that takes into account: (1) the domestic mining
and processing of these minerals; (2) strengthening of the workforce;
(3) government incentives for creating alternative manufacturing and
materials technologies; and (4) recycling of these minerals that we can
truly address this current problem with rare earth minerals.
______
Mr. Lamborn. Thank you. Mr. Engdahl.
STATEMENT OF JAMES B. ENGDAHL, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, GREAT WESTERN MINERALS GROUP
Mr. Engdahl. Chairman Lamborn, Ranking Member Holt,
distinguished members of the Subcommittee, thank you for the
opportunity to testify today. As President and CEO of the Great
Western Minerals Group, I am pleased to participate in this
important legislative hearing on H.R. 2011 and H.R. 1314.
These bills offer important elements of a comprehensive
solution to challenges in developing a complete, reliable, and
competitive rare earth supply chain in the United States. I am
particularly pleased to present both an international
perspective related to Great Western's rare earth projects and
a domestic perspective related to Formation Metals' Idaho
Cobalt Project.
The Great Western Minerals Group is a rare earths processor
pursuing a vertically integrated business model. Focused
primarily on the permanent magnet industry, GWMG owns two rare
earth alloy manufacturing companies, Great Western Technologies
in Troy, Michigan and Less Common Metals in Birkenhead,
England. In addition to permanent magnet alloys, these
manufacturers can produce a variety of specialty alloys for the
battery, automotive, aerospace, defense, and clean energy
industries.
As part of our vertical integration, we also hold interests
in several rare earth exploration and development properties in
the United States, Canada, and South Africa. I am also a member
of the Board of Directors of Formation Metals, a company
currently developing the United States' only primary cobalt
project in Idaho.
As highlighted in the legislation under discussion today,
an understanding of availability of critical minerals is a key
starting point for their successful development. With rare
earth projects coming online outside China, including Great
Western Steenkampskraal Mine in South Africa and shortly
thereafter Hoidas Lake in Saskatchewan, Canada, it is like that
the supply of light rare earths, such as lanthanum and cerium
will soon ease current shortages.
However, the prospects for light rare earths such as
neodymium and praseodymium and samarium and production of heavy
rare earths, such as dysprosium and terbium, to name a few are
much less certain. The key point, and one that is addressed by
the legislation before the Committee is that simply lumping all
critical materials or all rare earths into one category is not
helpful in alleviating supply shortages. Instead, a
comprehensive supply demand analysis of the 17 distinct rare
earth elements is needed to more fully inform the market as to
which materials will continue to be in short supply and those
which must be brought online rapidly to avoid downstream supply
disruptions.
Once an ore body for these critical materials is discovered
and proven to be economically viable for extraction, the
lengthy permitting process begins. While many exploration
companies and mining interests are quick to decry the arduous
and often decade-long permitting process, a few of these
company can provide a comprehensive list of the reasons for the
delay. This lack of detailed framework for reform prevent
companies from expediting their applications.
It does, however, appear that one potential issue is the
lack of detailed knowledge of industrial minerals mining and
processing with people in position to make or influence
decisions. As a result, these people make wrong decisions or
don't make one at all, resulting in significant cost delays and
normal delays. We want to be very clear. Great Western Minerals
Group does not support shortcuts that skirt important
environmental and safety protection as it is in no one's best
interest. Rather, we are encouraging a streamlining of the
permitting process by the identification of unnecessary
bureaucracy and inefficiency in the process.
While there are numerous critical materials that the
Committee should consider, the situation in rare earths is one
of the dearest and is in most urgent need of finding and
developing alternative source of supply.
In its legislation, the Committee should not only identify
sources for critical materials, but also strive to ensure that
a full supply chain is developed in the United States to
provide downstream processing and value-added capabilities,
such as separation and metal and alloy manufacturing. This
problem cannot be solved by mining alone. Nevertheless,
solutions are possible.
As a first step, the legislation proposed today makes great
strides in providing a more thorough breakdown of critical
materials by individual elements. These analysis should include
long-term supply/demand comparison and risk assessments related
to elements, prospects for long-term availability and be made
available to people in decision-making positions as it relates
to permitting of exploration and permitting.
The United States can also take near-term steps to solve
challenges, such as its national security concerns, simply by
creating a small inventory for those rare earths in short
supply as required by Representative Coffman. Additionally, the
United States and its allied nations must develop downstream
commercial capabilities to produce metals currently 100 percent
produced in China, and rare earth magnets currently produced
primarily in China. Without these capabilities, there will be
no demand to reestablish a vibrant rare earths economy.
We are hopeful that a bipartisan solution will include the
best elements of both bills in a final piece of legislation by
this Committee. Such legislation would serve as an important
first step in mitigating the rare earth and critical materials
crisis. Thank you again for the opportunity to testify. I look
forward to your questions.
[The prepared statement of Mr. Engdahl follows:]
Statement of Jim Engdahl, President & Chief Executive Officer,
Great Western Minerals Group
Chairman Lamborn, Ranking Member Holt, distinguished Members of the
Subcommittee,
Thank you for the opportunity to testify today. As President &
Chief Executive Officer of the Great Western Minerals Group, I am
pleased to participate in this important legislative hearing on H.R.
2011, the National Strategic and Critical Minerals Policy Act of 2011
and H.R. 1314, the Resource Assessment of Rare Earths Act of 2011.
These bills offer important elements of a much needed comprehensive
solution to challenges in developing a complete, reliable and
competitive rare earth supply-chain in the United States.
Great Western Mineral Group and Formation Metals, Inc.
I am particularly pleased to present both an international
perspective, related to GWMG's rare earth projects, and a domestic
perspective related to Formation Metals' Idaho Cobalt Project.
The Great Western Minerals Group is a rare earth processor pursuing
a vertically integrated business model. Focused primarily on the
permanent magnet industry, GWMG owns two rare earth alloy manufacturing
companies: Great Western Technologies Inc. of Troy, Michigan and Less
Common Metals Limited of Birkenhead, United Kingdom. In addition to
permanent magnet alloys, these manufacturers can produce a variety of
specialty alloys for the battery, automotive, aerospace, defense and
clean energy industries. As part of our vertical integration we also
hold interests in several Rare Earth exploration and development
properties in the United States, Canada and South Africa.
I am also a member of the Board of Directors of Formation Metals, a
company currently developing the United States' only primary cobalt
project in Idaho.
Resource Development
As highlighted in the legislation under discussion today, a solid
understanding of the availability of critical minerals is a key
starting point for their successful development. With rare earth
projects coming online outside China, including GWMG's Steenkampskraal
mine in South Africa and shortly thereafter, Hoidas Lake in
Saskatchewan Canada, it is likely that supply for light rare earths,
such as lanthanum and cerium, will soon ease current shortages.
However, the prospects for light rare earths related to permanent
magnet manufacturing, such as neodymium, and production of heavy rare
earths, such as dysprosium and terbium to name a few, are much less
certain.
The key point--and one that is addressed by the legislation before
the committee--is that simply lumping all ``critical materials'' or all
``rare earths'' into one category is not helpful in alleviating supply
shortages. Instead, a comprehensive supply-demand analysis for the 17
distinct rare earth elements is needed to more fully inform the market
as to which materials will continue to be in short supply and those
which must be brought online rapidly to avoid downstream supply
disruptions. It is necessary to first identify materials that will be
in shortfall, then develop, as rapidly as possible, sources of supply
for those material in shortest supply (such as the heavy rare earths).
Permitting
Once an ore body for these critical materials is discovered and
proven to be economically viable for extraction, the lengthy permitting
process begins. While many exploration companies and mining interests
are quick to decry the arduous and often decade long permitting
process, few of these companies can provide a comprehensive list of the
reasons for the delay. This lack of a detailed framework for reform
prevents companies from expediting their applications. It is our hope
that this hearing and the legislation under considerations will be a
catalyst for both industry and government in identifying specific
roadblocks and systematically eliminating them.
We want to be very clear, GWMG does not support shortcuts that
skirt important environmental and safety protections, as these are in
no one's best interest; rather, we are encouraging a streamlining of
the permitting process by the identification of unnecessary bureaucracy
and inefficiency in the process.
Rare Earth Supply Chain Development
While there are numerous critical materials that the committee
should consider, the situation in rare earths is one of the direst and
is in most urgent need of finding and developing alternative sources of
supply.
In its legislation, the committee should not only identify sources
for critical materials, but also strive to ensure that a full supply
chain is developed in the United States to provide downstream
processing and value-added capabilities such as separation, and metal
and alloy manufacturing. This problem cannot be solved by mining alone.
There are many challenges facing our industry. For example, much of
the solvent extraction expertise required to convert ore to separated
oxides is no longer resident in the United States, and is found today
primarily in China.
Also, even with recognition of the need in the United States for
supply of rare earths and other critical materials, without domestic
demand for downstream, value-added products, it is inevitable that
industry development in the United States will be limited. Quite
simply, companies cannot invest in value added manufacturing capability
without the demand to justify it.
Solutions
Nevertheless, solutions are possible.
As a first step, the legislation proposed today makes great strides
in providing a more thorough breakdown of critical materials by
individual elements. These analyses should include long-term, supply-
demand comparisons and risk assessments related to the elements'
prospects for long-term availability.
The United States can also take near term steps to solve challenges
such as its national security concerns simply by creating a small
inventory of those rare earths in short supply as required by
Representative Coffman in an amendment to the FY12 National Defense
Authorization Act.
Additionally, the United States and its ally nations must develop
downstream commercial capabilities to produce metal, currently 100%
produced in China, and rare earth magnets, currently produced primarily
in China. Without such capabilities, there will be no demand to
reestablish a vibrant rare earth sector in the United States. These
holes in the supply-chain might very well lead to the United States'
status as nothing more than an exporter of raw materials to nations
such as China and Japan, which would transform those rare earth oxides
into more specialized materials--materials that we would then have to
import to support military and energy technologies in this country.
Conclusion
We are hopeful that a bi-partisan solution will include the best
elements of both bills in a final piece of legislation passed by this
committee. Such legislation would serve as an important first step in
mitigating the rare earth and critical materials crisis. By taking this
first legislative step, and then moving on to additional legislation
such as the comprehensive Coffman RESTART bill to address issues such
as manufacturing and national security challenges, the United States
Congress can demonstrate important leadership in the global community
regarding the ever more important issues surrounding the United States'
precious natural resources.
Thank you again for the opportunity to testify. I look forward to
your questions.
______
Mr. Lamborn. Thanks to you and to all of our witnesses for
your testimony. I will begin the questioning.
Mr. Doebrich, the Energy Policy Acts of 2000 and 2005 had
provisions requiring that DOI and the USGS inventory the
onshore Federal estate to determine what the oil and natural
gas resources were and what impediments there were for access
to these resources. These ranged from statutory to
administrative withdrawals and lease stipulations to protect
game and threatened and endangered species, and these are known
as the EPCA studies.
Interior owns that database. How difficult would it be to
utilize the computer program designed to accomplish the EPA
studies, and how difficult would it be, in other words, more
specifically to add another data layer to that program that
includes solid minerals?
Mr. Doebrich. With regards to the computer program you are
referring to, I am assuming this is the one used by the EIA?
That is unknown at this point. That would require from our
standpoint a better understanding of what the capabilities of
that computer software is before I think I could answer that
fully. But I would be happy to get back to you on that.
Mr. Lamborn. Please do. If the EPCA studies--the data
programming--were to be utilized by expansion, our
understanding is that that program allows for adding data
layers. That is part of why we wanted the ambitious six-month
requirement for completion of this study, thinking that that
would be feasible. So please get back to us on that.
Mr. Doebrich. If I could elaborate on that, with regards to
2011 and the six-month provision, it is important I think to,
at least from our term to what assessment means, when we use
the term ``assessment,'' which is what is used in the bill, we
mean assessment of undiscovered resources. So first we do an
inventory of known resources and then use that as a foundation
to do an assessment of undiscovered resources. So I would just
ask if, in fact, that is how you are using the term
``assessment'' in the language of the bill?
Mr. Lamborn. We are going to have to discuss that and pin
that down because we are not anticipating sending teams of
prospectors throughout the entire 2.5 billion-acre Federal
estate to redo 113 minerals.
Mr. Doebrich. No, I understand. It is just that when we
talk about assessment then we are talking about the assessment
of undiscovered resources rather than an inventory of what we
know already and so I guess we would like clarification perhaps
on what you mean by ``assessment.''
Mr. Lamborn. Now it is our understanding that you are in
the middle of currently doing an assessment, can you update us
on that?
Mr. Doebrich. We are in the process of preparing for our
new national assessment. In that process over the last two or
three years, we have been updating our databases, our mineral
deposit models and grid and tonnage models that we use in these
assessments. So our intent has been to initiate that assessment
in 2013. We are in the process now also of determining what we
would assess for. The last time we did a national assessment
back in 1995 it was for gold, silver, copper, lead, zinc and
clearly we need to do more than that, given the concerns of
various other critical minerals today.
So that is what we are planning for. We actually are
updating models that provide resources of a variety of critical
minerals, including rare earths. And so our plan all along was
in 2013 to be in a position to initiate that assessment, which
would more or less be a four- or five-year effort.
Mr. Lamborn. We appreciate what you have been doing, but
our hope is to help jumpstart some of that and get things
actually moving. So thank you for that answer.
Mr. Duclos, given the potentially serious problems our
country would face if we have a critical shortage of strategic
minerals, including rare earth metals, but going beyond those
would the National Association of Manufacturers prefer
legislation that calls for a comprehensive study to be finished
in six months or three years?
Mr. Duclos. I would certainly think the faster the better.
In fact, really what manufacturers need is a comprehensive
action here that goes beyond this assessment. It also invests
in solutions. Also investing in the mining and the workforce
and developing of technologies can minimize and recycle these
materials. It has to be comprehensive.
Mr. Lamborn. Thank you.
I would now like to recognize the gentleman from New
Jersey, the Ranking Member.
Mr. Holt. Thank you, Mr. Chairman. We will move right along
because I see votes have begun on the Floor.
There is much to discuss in this issue only some of which
is in the jurisdiction of this Committee. I would like to begin
with just a comment.
Mr. Sullivan, as an Alaskan I am sure you are aware of the
name of Seward. It was Seward's folly to purchase all of Alaska
and its contents for a little over $7 million. We are now
talking about a bill that would assess all of the strategic
mineral resources of the United States with an authorized
amount of I think $1 million. I think we need to return the
word ``investment'' to our vocabulary here and recognize that
it would, indeed, be an investment to provide the kind of
assessment that we need in this area.
A couple of things, Mr. Duclos, in your testimony you
talked about the need to pay attention to the workforce. That
is within the jurisdiction of our Committee, particularly as it
applies to mining schools and so forth. Briefly, what
specifically do you think we need to do? Do we need new
programs, or larger enrollment in existing programs?
Mr. Duclos. Yes, all of the above. The fact is that
currently today there isn't a robust workforce in, for example,
the rare earths, either mining or processing. Inasmuch as that
presents some challenges in terms of making for efficient
processing of these materials, we need to have more folks
involved.
Mr. Holt. If you or NAM, the National Association of
Manufacturers could give us specific recommendations, we would
welcome that.
Mr. Duclos. Certainly. We could do that.
Mr. Holt. I noticed a slight discrepancy between your oral
testimony and your written testimony. You were talking about
the long permitting process. In the written testimony you said
few of the exploration companies can provide a comprehensive
list of the reasons for the delay. In your oral testimony you
said a few of these companies can provide. In your written
testimony I was relieved to hear finally someone say what I
thought you were saying. It gets frustrating around here to
hear complains about the big, bad Department of the Interior
not giving permits because when you ask people to explain what
is the problem the story ends.
So they have no problem with the Lamborn bill taking a look
at this issue, but I would like you to clarify, are you saying
that you cannot put your finger on actual problems in the
permitting process or are you saying you can put your finger on
problems in the permitting process in the big, bad Department
of the Interior.
Mr. Engdahl. I think what I am saying is that you can put
your finger on a few of them. I think there is a little more
than that. I think one of the examples that really comes out is
the Formation Metals Group that developed the Idaho Cobalt
Project mine in Idaho which will go into production here fairly
shortly. That was a 13-year process from discovery to which
will be to production next year.
There were conflicting issues as it related to approvals
through the EPA and through Forestry. What really came out of
it is that the people in those positions making decisions
didn't necessarily understand the full implications and that
goes, I think, beyond cobalt.
It goes more in particularly and would be much more
applicable in the rare earths sector where the knowledge of
what happens downstream after you mined is very critical to
understand what it takes--the cost, et cetera.
At the same time, there were some very, very good things
that happened as it related to the Formation Idaho Cobalt
Project. One program that is in play right now is your
industrial bonds and that, in the eleventh hour, allowed
Formation Metals to get financed. Those industrial bonds are
something that I think should be continued to be looked at and
expanded on, as it relates to very reasonable sources of
financing, without putting residents of the United States at
any financial risk or very little financial risk.
Mr. Holt. We are short on time because of votes on the
Floor, so I thank the Chairman.
Mr. Lamborn. Thank you all for being here. We do have to go
cast a vote. It finishes in roughly six minutes. We are going
to rush over there, vote, and then come straight back. Thee is
only one vote, so it won't take that long while we are over
there. So in roughly 15 to 20 minutes, we will reconvene. I
would ask your indulgence to remain during that time and then
we will finish up our questions. Thank you so much. We will be
in recess.
[Recess]
Mr. Lamborn. Mr. Flores, we will have questions from you.
Mr. Flores. Thank you, Mr. Chairman.
Mr. Sullivan this question is for you. There is a little
bit of variability among some of the testimony, both written
and verbal with respect to the regulatory environment and I
think you have some first-hand experience in terms of dealing
with the EPA in Alaska. I was wondering if you could share
those reflections with us.
Mr. Sullivan. Yes, sir. One of the things that we think----
Mr. Flores. I hate to interrupt you. Could you also talk
about the Department of the Interior as well?
Mr. Sullivan. Sure.
Mr. Flores. Thank you.
Mr. Sullivan. One of the things that actually we were just
discussing, particularly on large mining projects, is that what
we think would be very useful to have within the Federal
Government is a single point of contact that helps shepherd
companies through the permitting process itself. That is
something that in Alaska at DNR we have a group called the
Large Project Mining Group and that is exactly what we do with
all the different state permits on large projects. We have a
single point, an actual state official who coordinates all the
permitting and we think that that system--we have a lot of our
own issues in terms of permitting reform that we are working
on, but we think that that is one area of our permitting that
actually works quite well and has made it more efficient. We
think that a model like that similar with regard to Federal
permitting could be very useful and help to deal with some of
the inefficiencies that we have seen.
As I mentioned, the Kensington Mine example in Alaska was
just a case that--there was also litigation, but it was
problems with regard to Federal agencies overlap, different
interpretations of Federal law and it took almost 20 years.
Mr. Flores. We have heard testimony about how long it takes
in Australia and other developed countries. In your view, what
do you think the optimum time period is for permitting that
still allows the regulators to be satisfied that they have
properly addressed all the environmental issues, safety issues,
so forth versus also being responsive to what we are trying to
do here and that is to restore our rare earths footprint?
Mr. Sullivan. I think, and I would agree 100 percent with
what Mr. Engdahl said. In the permitting, when we advocate for
efficiencies and timeliness and certainty, that does not mean
we are advocating for cutting corners on environmental
regulations or safety. However, seven to ten years, which is as
I mentioned the average in the United States, just makes it too
difficult in terms of permitting certainty. I don't know what
the number in Canada is. I did mention the average time frame
in Australia, which is a country that has also got a strong
record. So I think more along the lines of that time frame, one
to two years, three years maybe max as opposed to seven to ten
I think can bring a lot more certainty and accelerate the
production that I think we all recognize we need.
Mr. Flores. OK.
Mr. Sullivan. There is one other issue, Congressman, if I
may? There are processes sometimes like the EIS and the 404'
under the Clean Water Act a lot of times Federal agencies view
that you have to do one and then you have to do the other. If
there are ways to actually start on those together in parallel,
you could cut down a lot of time.
Mr. Flores. Thank you. Mr. Chairman, I yield back.
Mr. Lamborn. Thank you. Mr. Johnson of Georgia.
Mr. Johnson of Georgia. Thank you, Mr. Chairman. Mr.
Ranking Member, and Subcommittee members for joining us today.
I appreciate the Subcommittee allowing me to join you today.
Mr. Chairman, it is a testament to your statesmanship that
you have placed a bill offered by a Democrat on the table for
discussion today. That bipartisan approach will be necessary if
we are going rise to the level of solving the important
challenges that we face as a nation. So I deeply appreciate the
spirit with which enabled me to come here. I also thank
Congressman Markey and Congressman Holt for their hard work in
helping to develop H.R. 1314, the RARA Act, which jointly
introduced earlier this year.
Mr. Doebrich, H.R. 1314 would direct USGS to conduct a
global assessment of rare earth element resources. Does USGS
support the goals of the bill?
Mr. Doebrich. Yes, sir, we do. We think, as written, the
language represents a reasonable approach to better understand
the global endowment of rare earths development resources.
Mr. Johnson of Georgia. It is a fact, is it not, that 97
percent of rare earth mineral production takes place in China
currently?
Mr. Doebrich. Production. That is correct.
Mr. Johnson of Georgia. China has recently slapped on some
export or has increased export quota and also export tariffs,
which have raised the price of these rare earth goods to the
tune at least 400 percent, are you aware of that?
Mr. Doebrich. Yes, sir.
Mr. Johnson of Georgia. So as the supply dwindles, the
price increases and we are losing control over our ability to
compete in this global economy without these kinds of materials
being available, is that true?
Mr. Doebrich. Yes, sir.
Mr. Johnson of Georgia. Now do you agree that the
completion of a global assessment of rare earth resources is a
logical next step to ensure that the United States understands
adequately where these rare earth elements are located across
the world?
Mr. Doebrich. Yes, we do. I mean the issue is China is a
supply risk issue. When we have commodities being produced from
geographical--the production is geographically concentrated
that present potential a supply risk issue. Other commodities,
for example, copper where production is geographically
disbursed, even though it is a very important commodity for a
lot of things that we manufacture, the supply risk is not there
because it is geographically disbursed. So I think with a
better understanding of rare earth resource potential supply
with potential friendly trading partners, if you will, that
perhaps would put us in a better position to understand where
our future supply may come from.
Mr. Johnson of Georgia. Thank you, Mr. Doebrich.
Mr. Engdahl, from your vantage point in the business of
rare earth element production, do you agree that H.R. 1314
would be an important piece of a broader effort to secure U.S.
supply of rare earth elements?
Mr. Engdahl. Yes, I do. First off, Congressman Holt, I
would just like to clarify the first point. In my written
statement that is correct--you are correct on that. And Mr.
Johnson, I appreciate your leadership on this issue as well.
On your question, yes I do believe it is important to have
a global perspective on this as well to really understand--the
knowledge of any commodity you really have to understand the
global perspective as we are operating in a global industry
right now. And to really have an effective industry within your
own country, you really do need to understand the big picture.
Mr. Johnson of Georgia. It does cost money in order to
develop this information that we need in order to compete in
this century.
Mr. Engdahl. Yes, it does.
Mr. Johnson of Georgia. Ten million dollars over three
years does that sound to be an excessive amount to you to
undertake this global survey?
Mr. Engdahl. I would probably have to think about that a
little bit, but it sounds like it might be in the reasonable
ballpark, but depending how in depth you want to really go as
this industry is changing radically by the day and new sources
are coming through right often.
Mr. Johnson of Georgia. Thank you, Mr. Chairman.
Mr. Lamborn. All right. Thank you.
Next to ask question is Mr. Johnson of Ohio.
Mr. Johnson of Ohio. Thank you Mr. Chairman for holding
this important legislative hearing on how critical and
strategic minerals are essential to our economy, our
livelihood, and in fact our national security. I want to thank
the panel for being with us this morning.
I am proud to be an original cosponsor of H.R. 2011, the
National Strategic and Critical Minerals Policy Act because as
we have heard from the panel's testimony and the witnesses
today these rare earth minerals and components are important
consumer products, but more importantly to defense equipment.
It is clear to me that America doesn't currently have a
rare earths strategy to ensure that America has access to these
important minerals. H.R. 2011 would give us the information
necessary to understand what resources America has and from
there we can develop a plan that allows for a strong domestic
mineral policy that creates American jobs and reduces our
dependence on foreign sources for these rare earth minerals. I
do have a couple of questions.
Mr. Engdahl, in your testimony you briefly mentioned the
need for permitting reform and how Great Western Minerals has
operations overseas. Can you give this Committee an idea of how
the U.S. process compares to other countries where you are
active, based on your experience?
Mr. Engdahl. Yes. We are very familiar with the permitting
process in Canada and South Africa is where we are operating
right now. In Canada, the permitting process is not a whole lot
different than it is in the United States and the average time
to take a mine from exploration to production is very similar
to unfortunately what Mr. Sullivan had mentioned. Seven to ten
years is kind of the expected from discovery right through. So
we have the same issues as it relates to some of the permitting
issues as well.
On the other side, in South Africa my experience there is
somewhat limited as we had already bought an operation that was
virtually fully permitted right through to mine production, as
it was a former existing producing mine. But in South Africa we
understand, and the experience that we have there is that it
will be somewhat less, certainly, than the seven to ten years,
but how much we are not sure. The bureaucracy is still fairly
heavy there as well.
Mr. Johnson of Ohio. Is Canada and South Africa the only
two places where you do business overseas?
Mr. Engdahl. It is the only two places at the moment that
we are in the process of developing and exploring mining
operations. We have other operations in the alloy manufacturing
in England.
Mr. Johnson of Ohio. OK.
Commissioner Sullivan you mentioned how Governor Parnell
recently wrote the President and the Secretary of Energy and
asked the Administration to further coordinate with Alaska so
that we are properly facilitating the development of rare earth
minerals in Alaska. Have you heard back formally or even
informally from the Administration on this request?
Mr. Sullivan. Yes, sir.
Mr. Johnson of Ohio. What is the result?
Mr. Sullivan. This is a little bit different from my
testimony yesterday, but I think in this regard the
conversations we have had have been positive. There is an
interest from the Administration on working with the State of
Alaska. As I mentioned, we are trying to do a lot of things on
our own, but we have had discussions with White House officials
and there is a lot of interest in terms of coordinating and
cooperating. So we are viewing that constructively.
The Governor in his letters to the Secretary and the
President has had a lot of recommendations in terms of where we
can cooperate. We haven't gotten specifics on that yet, but the
initial feedback, as I mentioned has been positive.
Mr. Johnson of Ohio. OK.
For anyone on the panel, Mr. Engdahl you as well, is a
seven- to ten-year permitting process is that acceptable in
your mind in terms of being a leader and going after these rare
earth minerals?
Mr. Engdahl. It is always nice to be able to do it in the
shortest period possible, and whatever that period is without
impacting in a negative way the environment and safety. I think
the opportunity to reduce below seven to ten years is
absolutely there just through improvements in the efficiencies
and without affecting in a negative way the environment and
safety. Really, it comes down to coordination. In our case,
where I am fairly familiar on the Canadian, is the cooperation
between provincial and Federal governments as opposed to state
and Federal governments here. The cooperation between the two
is one of the holes that create a lot of the inefficiencies in
the process.
Mr. Johnson of Ohio. Thank you very much. I yield back, Mr.
Chairman.
Mr. Lamborn. Thank you.
Mr. Thompson of Pennsylvania.
Mr. Thompson. Thank you, Chairman. Thank you gentlemen for
your expertise and your testimony on this very important issue
where obviously access to needed minerals, rare earths--all
minerals I think are extremely important to our country from
many different perspectives--and we have heard about a lot of
different, multiple variables. I want to stay with the
permitting process and so my question is for maybe Mr. Doebrich
or maybe Ms. Burke. I don't know who is most appropriate.
I have heard a lot of numbers, seven to ten years in terms
of Federal permitting. One specific example of a gold mine was
I think Kensington was referenced in someone's testimony for 20
years, is our agencies working to improve the efficiency of
that process? If so, what is the goal and what measures are
being taken to improve the efficiency of that process or is
seven to ten years the most efficient that we will ever get?
Mr. Doebrich. I will have to defer to Ms. Burke here,
please.
Ms. Burke. Good morning and thank you for this opportunity
to clarify some of this information.
It is true that from discovery to production that it takes
seven to nine or ten years. But generally, with respect to
large mines from the beginning of our processing of a plan or
an application, if you will, to our decision averages about
four years.
Mr. Thompson. What kind of variables go into that period of
time?
Ms. Burke. There is the initial review of the plan for
completeness and oftentimes there is some back and forth that
we need to ask for additional information. There is the NEPA
process, which is by far the largest part of that time, which
can take I would say it is a three-year average, but we know it
can take more time than that sometimes.
Then there is the financial guarantee negotiation, if you
will, to determine what kind of bonding is necessary and then
to get to the final approval. So all that is wrapped up into a
four-year average.
Mr. Thompson. Thank you.
Commissioner Sullivan, first of all, congratulations on
frankly based on your testimony Alaska's efforts to really
facilitate domestic production of strategic minerals, seeing
the things that you mentioned, the actions you have taken in
Alaska, the bonding authority, road construction studies and
the permitting, single point of contact.
In your efforts to refine and streamline the permitting
process from a state perspective, are there lessons that you
have learned in your state that you would recommend to this
Committee in terms of considering on a more national
perspective?
Mr. Sullivan. Yes, sir. I think the one that I mentioned
earlier is the single point of contact. And we have this team
in the state and we permit large mines on state land and work
through that. This is a project team that does not just mining,
any major project development in the state. If an industry or
company wants to go through this large project team, they
essentially get an advocate who is the single point of contact
and who coordinates all the permitting within the state
government system. We have been complimented on that working
very well because this person knows the system well and can
help streamline and accelerate what the different agencies
within state government have to do in terms of permitting. We
think a system like that could work in the Federal permitting
process and could be a good model on working through these
efficiencies and making sure different agencies have similar
goals.
Mr. Thompson. Getting back to Ms. Burke, we had a gentleman
in here from another agency. He was talking about how the
Administration is going to fast track environmental assessment
and I believe it was for wind offshore, which I thought was a
brilliant idea, building a very fast track, efficient, NEPA
assessment. I don't know if it was considered that. Has there
been any consideration of that with the agency since it sounds
like the largest part of--and I am not talking about shortcuts
that would threaten the environment in any way, but really just
streamlining the process.
It looks like the Administration is willing to do that for
some alternative energies. Has there been any consideration, as
you described, that this is probably the largest piece of that
permitting time, the extensive permitting time?
Ms. Burke. Yes, you are correct that with respect to
renewable energy that we have a fast track process in that we
have deployed additional resources so that we are able to get
from start to finish more expeditiously.
With respect to mining, we have not employed such a
concept. However, we are working, and I know that it can be
frustrating for the mining companies, for everyone involved, we
are working to be better coordinated across the Federal family
and that involves coordination early at the beginning of the
process so there can be an exchange of information and so we
don't get rather far down the line and then have to back up and
fix some things. So I think my time has expired.
Mr. Thompson. I would just offer that I think the return
investment from mining--we are talking about rare minerals so
we don't want to be dependent on China. The return on
investment by doing that for mining I think would be a much
bigger yield than the return on investment from alternative
energies.
Mr. Lamborn. Thank you.
Now with the agreement of the witnesses, I would like to
have a second round of questions. There is a limited number of
us here, so it should go pretty quickly. Seeing agreement, I
will go ahead and start the second round.
Madame, you just mentioned, if I heard you right, that you
expedite renewable energy projects, but not mining or oil and
gas projects, did I hear you correctly?
Ms. Burke. That is correct. We have a process for
expediting renewable projects.
Mr. Lamborn. Why don't you give the same what I would
consider equitable expedited review to all projects?
Ms. Burke. We have made some decision prioritizing and are
open to discussion about how we should be deploying our
resources, but we have made the decision as an Administration
to make renewable energy one of our priorities.
Mr. Lamborn. So this is just in the last two years or so?
Ms. Burke. Actually, the deployment of resources began
during the last administration, but we have certainly made it a
more robust program during this administration.
Mr. Lamborn. That is something we are going to want to
delve more into. I can guarantee you that.
Mr. Duclos, above and beyond the rare earth minerals, what
other minerals would you consider strategic or critical, or are
there others?
Mr. Duclos. Yes, we have done an assessment based on supply
and price risk as well as criticality to GE, so this is a GE
assessment in terms of what elements are critical. And to be
honest, these are proprietary information because we consider
this analysis. So the process was a quantitative process of
assessing supply and demand risks as well as a quantitative
process of assessing the criticality to our company. So those
things that ended up high on both of those scales are materials
that we are looking at in terms of developing a comprehensive
plan to minimize the risk.
It is based on a procedure that the National Academy has
developed a couple of years ago and actually that the
Department of Energy used for their study that came out in
December on critical elements for green energy. What comes out
of this is the fact that there is a limited set of elements
that you really do need to focus on and we need to do that
analysis so that we can get on with solving the issues. I would
say that these assessments of the supply and demand are a key
part of that. Certainly, as manufacturers that need to do this
analysis that supply and demand risk is pretty much independent
of who you are, OK. It is the impact access that depend on who
you are.
So by having this analysis done, it simplifies our analysis
by a factor of two, roughly. It is something that I think the
Federal Government certainly can helps.
Mr. Lamborn. So it is fair to say without going into
proprietary information that there are elements above and
beyond the rare earths that are potentially critical or
strategic?
Mr. Duclos. Yes, speaking from the standpoint of General
Electric rare earths are definitely high on the list, but there
are others. yes.
Mr. Lamborn. Also for the National Association of
Manufacturers, would the same hold true?
Mr. Duclos. At this point I can only speak for GE.
Mr. Lamborn. But certainly GE. OK. Can this change in the
future as new technologies drive demand for new materials?
Mr. Duclos. Yes. We have been doing these analyses for
years now. We do see elements moving around in this chart of
demand and supply risk versus impact. It does depend on time.
Mr. Lamborn. So looking at the two bills that are in front
of this Committee today, would you prefer a study that focused
only on the rare earths or on the broader spectrum of critical
minerals?
Mr. Duclos. Since there are a few elements that we do
consider critical outside of the rare earths, it should be a
bit broader. However, our focus right now would be on the rare
earths and the NAM's position is that rare earths are clearly
the area that needs to be the focus today.
Mr. Lamborn. OK. Thank you. And is it important to know, as
H.R. 2011 calls for, what part of the nation's mineral
endowment is open for mineral entry and what is not available?
Mr. Duclos. From my standpoint, I guess I am not expert
enough to address that.
Mr. Lamborn. Would any of the other witnesses care to
answer that particular question? Mr. Sullivan?
Mr. Sullivan. Yes, sir. I think it is a very important
question. I think that in my testimony there are very
significant parts of Alaska, which are Federal land, but there
are significant parts of that Federal land that are not open to
mineral exploration. What we would not propose is to say
everything should be open, but when we have done an assessment,
and we are doing our state assessment right now is going to be
both state lands, Federal lands, and native lands.
When we do an assessment and if we find something that has
a lot of potential--and as I mentioned in the testimony we have
72 different occurrences of rare earth elements in Alaska. If
we do see that and it is in a Federal area where it is closed
off to mineral exploration, we believe it would make sense on
the highly prospective areas to carve out an area on those
Federal lands that are currently banned from exploration to
actually make an exception in those areas.
Mr. Lamborn. Thank you all for answering the questions.
Ranking Member Holt.
Mr. Holt. Thank you. Some good exchanges.
Mr. Duclos, I think we will want to, as we look at supplies
of rare earths and critical minerals look at alternatives,
manufacturing tradeoffs and substitutions as well as
opportunities for recycling. I am wondering whether we or
whoever we designate to do this will be able to do a reasonable
job if we don't have the full cooperation of the users, the
manufacturers. Will it be possible to talk about substitutions,
will the manufacturers give full cooperation about what is used
and what might be used instead of it?
Furthermore, I would like you to first answer the question
and maybe others would add to this also of whether recycling is
even feasible, whether small amounts of rare earths that are
used in certain alloys or certain paints or whatever can be
recovered economically, whether that is a reasonable way to go.
If it is, whether proprietary limitations would prevent that
from being part of any initiative that we would start?
Mr. Duclos. Certainly, to address your first question, the
availability of these materials is absolutely critical to
manufacturing. I mean you can't build these products without
them. So manufacturers will be very open in terms of trying to
figure out solutions to this.
Mr. Holt. I mean more open than you would be. You couldn't
even say what non-rare earth materials you would consider
critical. You weren't talking about amounts. You weren't
talking about where they would be used. This is a company that
makes everything from plumbing to jet engines. This is where I
am wondering where we are going to go with this without being
really more restrictive than your company or similar companies
would want us to be.
Mr. Duclos. Yes. So this is actually I think an area where
the Federal Government can play a role. In terms of collecting
this proprietary information from companies so that as GE see
our use of a particular element increasing over the next three
or four years, as we develop technologies and decide to use new
elements this is information that is proprietary because we
can't telegraph to our competitors. However, we would be
willing to share this with the Federal Government that could
then pull in that proprietary information from all of the
manufacturers and help develop and see around the corners of
where we need to be.
Mr. Holt. In the short time that we have because I really
wanted to get to some other things too, is recycling feasible?
Who has looked at that? Mr. Doebrich?
Mr. Doebrich. Yes, my understanding is that recycling in
the strictest sense was not terribly feasible for rare earths.
Actually extracting the rare earths from the manufactured
products would be just as difficult, if not more than what is
required to extract it from the very complex minerals that they
are found in now.
I think where people are talking about recycling is
actually really reuse. For example, magnets, neodymium magnets,
very strong magnets. If there is a 5-gram magnet used in a
discarded product, that 5-gram magnet could be taken out and
used in a new product, or that 5-gram magnet could be
remanufactured into two smaller 2-gram magnets. So that is the
type of reuse as opposed to recycling that I think is what is
feasible in terms of rare earth.
Mr. Holt. Let me get to two quick questions about
permitting. Let me ask Ms. Burke. When we talk about
streamlining the permitting, how many permits are currently
pending, are we talking about ones or twos, or thirties or
forties?
Ms. Burke. Currently, under the Mining Law of 1872, we have
370 pending plans that we are evaluating.
Mr. Holt. On critical minerals I am talking about. I am
sorry. Critical minerals.
Ms. Burke. Critical I don't have the numbers broken down.
Rare earths? None.
Mr. Holt. OK.
And Mr. Engdahl, just a quick question. Is it true, as I
understand, that Canadian companies in international mining
operations must adhere to regulations on safety and environment
that are at least as strict as Canada's.
Mr. Engdahl. That is correct.
Mr. Holt. Is it also not true that some of the largest and
most successful mining companies in the world are headquartered
in Canada?
Mr. Engdahl. That is also correct.
Mr. Holt. All right. Thank you.
Mr. Lamborn. Thank you. I want to thank all of the
witnesses for being here today. This has been illuminating,
very helpful, and we appreciate your comments and your
testimony.
We would like to say that members of the Committee might
have additional questions for you for the record and I would
ask that you respond to those in writing, if you receive those.
And if there is no further business, without objection, the
Subcommittee stands adjourned.
[Whereupon, at 11:30 a.m., the Subcommittee was adjourned.]