[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








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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.]

                                 
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