[Senate Hearing 115-183]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 115-183

THE UNITED STATES' INCREASING DEPENDENCE ON FOREIGN SOURCES OF MINERALS 
AND OPPORTUNITIES TO REBUILD AND IMPROVE THE SUPPLY CHAIN IN THE UNITED 
                                 STATES

=======================================================================

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 28, 2017
                               __________










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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                    LISA MURKOWSKI, Alaska, Chairman
JOHN BARRASSO, Wyoming               MARIA CANTWELL, Washington
JAMES E. RISCH, Idaho                RON WYDEN, Oregon
MIKE LEE, Utah                       BERNARD SANDERS, Vermont
JEFF FLAKE, Arizona                  DEBBIE STABENOW, Michigan
STEVE DAINES, Montana                AL FRANKEN, Minnesota
CORY GARDNER, Colorado               JOE MANCHIN III, West Virginia
LAMAR ALEXANDER, Tennessee           MARTIN HEINRICH, New Mexico
JOHN HOEVEN, North Dakota            MAZIE K. HIRONO, Hawaii
BILL CASSIDY, Louisiana              ANGUS S. KING, JR., Maine
ROB PORTMAN, Ohio                    TAMMY DUCKWORTH, Illinois
LUTHER STRANGE, Alabama              CATHERINE CORTEZ MASTO, Nevada
                      Colin Hayes, Staff Director
                Patrick J. McCormick III, Chief Counsel
                Annie Hoefler, Professional Staff Member
                   Severin Wiggenhorn, Senior Counsel
           Angela Becker-Dippmann, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
           Spencer Gray, Democratic Professional Staff Member
        Melanie Stansbury, Democratic Professional Staff Member
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
                            C O N T E N T S

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                           OPENING STATEMENTS

                                                                   Page
Murkowski, Hon. Lisa, Chairman and a U.S. Senator from Alaska....     1
Cortez Masto, Hon. Catherine, a U.S. Senator from Nevada.........     3

                               WITNESSES

Hitzman, Dr. Murray, Associate Director-Energy and Minerals, U.S. 
  Geological Survey, U.S. Department of the Interior.............     4
Barrios, Alf, Chief Executive, Rio Tinto Aluminum................    12
Hinde, Dr. Chris, Director, Reports, S&P Global Market 
  Intelligence...................................................    21
MacGillivray, Randy, Vice President Project Development, Ucore 
  Rare Metals, Inc...............................................    25
Cosgriff, Vice Admiral Kevin J., USN (Retired), President and 
  CEO, National Electrical Manufacturers Association.............    30
Eggert, Dr. Roderick G., Viola Vestal Coulter Foundation Chair in 
  Mineral Economics, Division of Economics and Business, Colorado 
  School of Mines................................................    36

          ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

Barrios, Alf:
    Opening Statement............................................    12
    Written Testimony............................................    14
    Responses to Questions for the Record........................    74
Cortez Masto, Hon. Catherine:
    Opening Statement............................................     3
Cosgriff, Vice Admiral Kevin J.:
    Opening Statement............................................    30
    Written Testimony............................................    32
    Responses to Questions for the Record........................    86
Eggert, Dr. Roderick G.:
    Opening Statement............................................    36
    Written Testimony............................................    38
    Responses to Questions for the Record........................    88
Hinde, Dr. Chris:
    Opening Statement............................................    21
    Written Testimony............................................    23
    Responses to Questions for the Record........................    76
Hitzman, Dr. Murray:
    Opening Statement............................................     4
    Written Testimony............................................     6
    Responses to Questions for the Record........................    68
MacGillivray, Randy:
    Opening Statement............................................    25
    Written Testimony............................................    27
    Responses to Questions for the Record........................    81
(The) Minerals Science and Information Coalition:
    Statement for the Record.....................................    94
Murkowski, Hon. Lisa:
    Opening Statement............................................     1

 
THE UNITED STATES' INCREASING DEPENDENCE ON FOREIGN SOURCES OF MINERALS 
AND OPPORTUNITIES TO REBUILD AND IMPROVE THE SUPPLY CHAIN IN THE UNITED 
                                 STATES

                              ----------                              


                        TUESDAY, MARCH 28, 2017

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:00 a.m. in 
Room SD-366, Dirksen Senate Office Building, Hon. Lisa 
Murkowski, Chairman of the Committee, presiding.

  OPENING STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR FROM 
                             ALASKA

    Chairman. Good morning. The Committee will come to order.
    I understand Senator Cantwell will be coming later, but 
Senator Cortez Masto will be subbing in this morning. We 
appreciate that a great deal.
    We are here today to receive testimony on the United 
States' foreign mineral dependence. It will probably come as no 
surprise to anyone here that, I believe, this is a significant 
and a growing threat to our nation. Resolving it and restoring 
our mineral security is a priority for me and many members of 
this Committee.
    Our starting point is to recognize that minerals are 
important because they are the building blocks of our modern 
society, from the smallest computer chips to the tallest 
skyscrapers and just about everything in-between.
    Minerals are fundamental to fracking, MRI machines, and jet 
engines. The homes that we live in, the food we eat, the cars 
we drive, and the computers we use, all depend on minerals. 
Almost every product in our nation is made from, or uses, 
minerals, yet more and more these minerals are now being 
produced somewhere else.
    According to the U.S. Geological Survey (USGS), we imported 
at least 50 percent of our supply of 50 different minerals, 
including 100 percent of our supply of 20 of them, just last 
year in 2016. That is a major increase from our foreign 
dependence levels in 1978 when this data was first collected, 
and it suggests that we are on the verge of replacing our 
dependence on foreign oil with an equally, if not even more 
damaging, dependence on foreign minerals.
    Rare earth elements are perhaps the best-known example. 
With the Mountain Pass Mine in California now closed, we once 
again import 100 percent of our supply of rare earths, exposing 
us to potential supply shortages and price volatility while 
reducing our international leverage and attractiveness for 
manufacturing. It is the same story with graphite, palladium, 
indium, manganese, niobium and many others.
    When you look at the list of what it is that we import, 
where we import it from, and what it is used for, it quickly 
becomes clear that we have a problem on our hands. Our foreign 
mineral dependence is a threat to our ability to create jobs in 
this country. It limits our growth, our competitiveness, and 
our national security. It may seem abstract right now for some 
who are not responsible for managing a supply chain, but there 
will come a day when it will become real for all of us when we 
simply cannot acquire a mineral or when the market for a 
mineral changes so dramatically that entire industries are 
affected.
    Some agencies have begun to wake up to the threats posed by 
our foreign mineral dependence, but on the whole, the Federal 
Government is not paying anywhere near enough attention. 
Executive agencies are not as focused or as coordinated as they 
need to be, and they do not have the direction or authority 
that they need to make lasting progress to restore our mineral 
security.
    That is why, for the past three Congresses, I have 
introduced legislation to improve our nation's mineral security 
along with members from both sides of our Committee. Last 
Congress we included our work in our broad, bipartisan energy 
bill which both the Committee and the Senate overwhelmingly 
approved.
    As we examine policy options in this new Congress, I remain 
convinced that our ideas on minerals are on the right track and 
they are as timely as ever.
    I continue to believe that we should have a mechanism to 
track which minerals are critical in use and susceptible to 
supply disruption. When a mineral is listed as critical, we 
should survey our lands to determine the extent of our resource 
base.
    When it comes to permitting delays for new mines, our 
nation is among the worst in the world, so fixing our broken 
system is one of the single most important steps we can take.
    We should also promote research into alternatives, 
efficiency, and recycling options, especially for minerals that 
we do not have in significant abundance.
    We should build out our minerals forecasting capability to 
provide a better understanding of mineral-related trends and 
early warnings when problems do arise.
    And we need to pay attention to workforce issues so that 
smart kids are taught by qualified professionals and can go on 
to find success in environmentally-responsible mining 
operations.
    This Congress offers a perfect opportunity to finally bring 
our minerals policies into the 21st century and to begin to 
restore our nation's mineral security. Today we start that 
effort by focusing on the importance of minerals, the threats 
posed by our rising foreign dependence, and a discussion of the 
solutions that are within our reach. So I look forward to 
hearing from each member of the panel this morning.
    I will now turn to Senator Cortez Masto and welcome her for 
her comments.

  STATEMENT OF HON. CATHERINE CORTEZ MASTO, U.S. SENATOR FROM 
                             NEVADA

    Senator Cortez Masto. Thank you.
    I want to thank Madam Chair Murkowski and Ranking Member 
Cantwell for bringing together this hearing that is incredibly 
salient to our interest in not only rebuilding our mining 
industry but in retooling our economy for a high-tech world.
    The United States is at a critical stage of innovation. The 
technologies that we all use demand a steady supply of critical 
minerals, minerals that are primarily imported with an 
increasing global demand.
    When our dependence on foreign minerals increases and we 
are 100 percent import reliant for 20 minerals, including 8 
identified as critical, it is absolutely necessary to 
prioritize the security of our supply chain.
    We have the opportunity, right now, to seize on mineral 
supply independence as we have in the energy sector with fuel. 
Our country has the supplies, workforce, technology and 
government programs to rebuild our domestic supply, but they 
require investment.
    Not only does improving our supplies ensure our mining 
industry's success, but it will also improve our economy, other 
important industries and resilience to global competition.
    Mining companies provide thousands of good jobs for 
residents in Nevada, pay millions of dollars in tax revenues 
and help support other parts of our state's economy.
    Additionally, mining companies like Barrick and Newmont not 
only employ thousands of Nevadans but also prioritize digital 
improvements that increase efficiency, transparency and 
corporate sustainability. The ripple effect of an expanded 
domestic mining industry includes technology companies, 
research institutions, energy systems and the military.
    Technology minerals are absolutely critical for many of the 
technologies that are part of our everyday lives and stand to 
improve our energy systems from our cell phones, to solar 
panels and battery storage. Leveraging our resources is a real 
opportunity which, if done responsibly, continues the charge of 
my state and the country into a great age of innovation and 
resiliency in a competitive global market.
    But know that there are challenges that we must address. I 
am eager to hear from our esteemed experts who will inform us 
about the challenges they face or the solutions they believe 
will move us forward. I know that investments in technologies, 
research, education and a trained workforce and improving the 
permitting review process, all are priorities moving forward as 
our country increases its domestic supply of critical minerals 
and the innovation dependent upon those resources.
    Thank you very much for joining us today.
    Chairman. Thank you, Senator.
    We will now turn to our witnesses. Thank you. I appreciate 
not only your input this morning but what you have done in the 
various sectors and spaces that you operate. Your leadership is 
greatly appreciated.
    We are going to start off this morning with Dr. Murray 
Hitzman, who is the Associate Director for Energy and Minerals 
at the U.S. Geological Survey. Welcome to you, Mr. Hitzman.
    He will be followed by Mr. Alf Barrios, who is the Chief 
Executive of Rio Tinto Aluminum. Welcome.
    Dr. Chris Hinde is the Director of Reports, Metals and 
Mining at S&P Global Market Intelligence. We thank him for 
being here.
    Next is a friend of mine, Mr. Randy MacGillivray, who is 
the Vice President of Project Development at Ucore Rare Metals, 
Incorporated. Welcome.
    We are joined by Vice Admiral Kevin Cosgriff, U.S. Navy 
Retired. He is the President and CEO of the National Electric 
Manufacturers Association (NEMA). We appreciate you being here.
    Rounding out the panel is Dr. Roderick Eggert, who is the 
Viola Vestal Coulter Foundation Chair in Mineral Economics at 
the Division of Economics and Business at the Colorado School 
of Mines. We appreciate your contributions this morning.
    Dr. Hitzman, we will ask you to lead off the panel. I would 
ask each of you to limit your comments to five minutes. Your 
full testimony will be incorporated as part of the record, and 
we will hold our questions until each of you has spoken. I look 
forward to your input this morning.
    Dr. Hitzman, welcome.

STATEMENT OF DR. MURRAY HITZMAN, ASSOCIATE DIRECTOR-ENERGY AND 
   MINERALS, U.S. GEOLOGICAL SURVEY, U.S. DEPARTMENT OF THE 
                            INTERIOR

    Dr. Hitzman. Good morning, Chairman Murkowski, and thanks 
to the members of the Committee. Thank you for the opportunity 
to be here to testify about the nation's foreign mineral 
dependence.
    The U.S. Geological Survey is responsible for conducting 
research and collecting data on a wide variety of mineral 
resources. The USGS collects, analyzes and disseminates 
information on current production and consumption of 84 mineral 
commodities, both domestically and internationally for 180 
countries. These data include information on domestic 
production and use, import sources, world production capacity, 
and recycling. These mineral data are published annually in the 
Mineral Commodities Summaries.
    Global demand for mineral commodities is on the rise, and 
the United States is increasingly reliant on foreign sources 
for raw processed mineral materials. In 2016, our studies show 
that imports made up more than one-half of the U.S. apparent 
consumption of 50 non-fuel mineral commodities valued at $32.3 
billion. The United States was 100 percent reliant for 20 of 
these mineral commodities, including 8 identified as critical. 
This is an increase from 2015 when the country was more than 50 
percent dependent on 47 non-fuel mineral commodities and 100 
percent reliant on 19.
    The list of mineral commodities for which the United States 
is 100 percent import reliant includes both well-known and 
obscure commodities. Elements that the U.S. depends on from 
foreign sources include the rare-earth element, Europium, which 
is essential for getting a bright red color out of a TV screen 
and metal oxides that are responsible for some popular 
automobile paint colors.
    The metal oxides are an example of the effect of supply 
disruptions. For several months after the 2011 Japanese 
earthquake and tsunami, American vehicle manufacturers were 
unable to supply customers with popular red and black sports 
cars and trucks due to the unavailability of a critical mineral 
ingredient.
    In 2015, the USGS, in cooperation with the Department of 
Energy, developed a screening tool to identify critical 
minerals of concern for economic and national security and to 
stay ahead of technology changes and geopolitical unrest. This 
criticality tool accounts for several variables in identifying 
critical minerals, including how vulnerable the supply chain is 
to disruption, how much production growth is expected for the 
material and market dynamics. These studies allow the users to 
rank minerals from lower to higher potential criticality. The 
resultant rankings are being used today by the Defense 
Logistics Agency.
    An accurate assessment of the nation's mineral resources 
must include not only the resources available in the ground but 
also those that become available through recycling. Metal 
supply consists of primary material from a mining operation and 
secondary material which is composed of new and old scrap. 
Although recycling is a significant source of some non-fuel 
mineral resources such as aluminum, technical difficulties with 
recycling mean that for other mineral commodities such as the 
rare earths, recycling is extremely challenging.
    In addition to providing information on mineral production 
and consumption, the USGS also produces data that aids in 
assessing the mineral potential of the nation. For example, the 
USGS recently released a study on critical minerals in Alaska.
    To help source minerals domestically, the USGS undertakes 
both geologic mapping and the production of regional-scale 
geophysical maps that help define areas favorable for mineral 
exploration.
    Currently only about one-third of the United States has 
been mapped at the detailed scales required for mineral 
exploration. Other countries, such as Canada and Australia, 
have undertaken such geological and geophysical surveys and 
have reported that investments of $1 by the government have 
resulted in further investments of over $5 by the private 
sector.
    The Department, through the USGS, stands ready to fulfill 
its role as the federal provider of unbiased research on known 
mineral resources, assessment of undiscovered mineral 
resources, data to aid mineral exploration by the private 
sector and information on domestic and global production and 
consumption of mineral resources for use in global critical 
mineral supply chain analysis.
    Thank you for the opportunity to testify. I'm very happy to 
answer any questions.
    [The prepared statement of Dr. Hitzman follows:]
    
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Chairman. Thank you, Dr. Hitzman.
    I believe that other members of the Committee have received 
the USGS report on the Alaska assessment which I found was very 
helpful with the maps, thank you.
    Mr. Barrios, welcome.

          STATEMENT OF ALF BARRIOS, CHIEF EXECUTIVE, 
                       RIO TINTO ALUMINUM

    Mr. Barrios. Good morning, Chairman Murkowski and members 
of the Committee.
    My name is Alf Barrios. I am the Chief Executive of Rio 
Tinto Aluminum. I sit on the Rio Tinto Executive Committee and 
serve as the company's country sponsor for Canada and the 
United States.
    Rio Tinto has been operating in the U.S. for over 100 
years. Our operations include Kennecott Copper in Salt Lake 
City, Utah; Resolution Copper in Superior, Arizona; and Rio 
Tinto Boron in California.
    The most recent Mineral Commodity Summaries by the U.S. 
Geological Survey should set off alarm bells in the White House 
and Congress. The study, published earlier this year, indicates 
the U.S. is now import-dependent for 50 different metals and 
minerals and 100 percent import-dependent for 20. The trend is 
troubling.
    U.S. mineral dependency is at a record-high, now double 
what it was 20 years ago. During that same timeframe, 
investment in minerals exploration projects has dropped from 20 
percent to seven percent. This drift away from greater self-
sufficiency for the basic building blocks of our economy 
compromises our economic and national security and ignores 
North America's rich reserves of metals and minerals that are 
at the front-end of the manufacturing supply chain. Dependence 
on imported essential materials to meet the needs of key 
domestic industries leaves the U.S. unnecessarily vulnerable to 
disruptions to vital supply chains.
    Of course, no country, not even the United States, is 
blessed with top tier deposits of every essential mineral. 
Enhancing the U.S.' ability to access its own resources does 
not mean we should raise barriers to imported materials. 
Nowhere are the mutual benefits of trade more apparent than the 
integrated supply chains in North America where imports from 
Canada make U.S. manufacturers more competitive and vice versa.
    We have a real opportunity to realize the full potential of 
the domestic mining industry. Clearly demands for minerals is 
increasing as global population expands and minerals are used 
in a greater range of applications, particularly associated 
with the deployment of new technologies.
    The manufacturing sector has expressed heightened concerns 
about securing access to the minerals they need when they need 
them. According to a survey of 400 manufacturing executives, 
more than 90 percent are concerned about supply disruptions, 
citing geopolitics and increasing global demand as the most 
pressing factors. In addition, 80 percent of U.S. manufacturing 
leaders recognize the importance of sourcing domestic minerals 
and metals, noting strengthened national security as reasons 
for doing so.
    An outdated, inefficient permitting system presents a major 
barrier to the domestic mining sector's ability to perform to 
its full potential and supply more of our infrastructure needs. 
The U.S. has one of the longest permitting processes in the 
world for mining projects. In the U.S., necessary government 
authorizations now take approximately seven to ten years to 
secure, placing the U.S. at a competitive disadvantage in 
attracting investment for mineral development. By comparison, 
permitting in Australia and Canada, which have similar 
environmental standards and practices as the U.S., takes 
between two and three years.
    Authorities, ranging from the National Academy of Sciences 
to the Departments of Energy and Defense to international 
mining consulting firms, have identified permitting delays as 
among the most significant risk and impediments to mining 
projects in the United States. Most recently, the U.S. 
Government Accountability Office linked the need to streamline 
the mine permitting process to mitigate supply risks.
    To address supply chain vulnerability and import 
dependence, President Trump and Congress should continue to 
examine ways to improve permitting of new U.S. mines and 
smelters. The mining industry strongly supports efforts in the 
House and Senate to address the mine permitting process 
including S. 145, the National Strategic and Critical Minerals 
Production Act. The bill provides for efficient, timely, and 
thorough permit reviews and incorporates best practices for 
coordination between state and federal agencies.
    We also appreciate the efforts by Chairman Murkowski last 
Congress to move forward the American Mineral Security Act. Her 
legislation, cosponsored by many on this Committee, was a step 
forward in bringing the U.S. in line with its global peers who 
are preparing to meet the 21st century challenges of mineral 
supply chain reliability and security.
    I would like to conclude by reemphasizing the important 
role the mining industry has in supporting U.S. manufacturing 
and infrastructure development, but also by acknowledging that 
Rio Tinto understands responsibility extends far beyond.
    We must lead by example when it comes to community 
engagement, reclamation and pioneering technology innovation. 
For example, on Lake Chelan in north-central Washington State, 
we have been working to rehabilitate the old copper mine which 
we obtained through a large acquisition in 2008. Despite never 
commercially benefiting from the mine, Rio Tinto has brought 
its global expertise to the project and has spent hundreds of 
millions of dollars to rehabilitate Holden Village.
    Thank you for the opportunity to testify today. I 
appreciate the Committee's leadership on this very important 
issue.
    [The prepared statement of Mr. Barrios follows:]
    
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
        Chairman. Thank you, sir.
    Let's go to Dr. Hinde. Welcome.

       STATEMENT OF DR. CHRIS HINDE, DIRECTOR, REPORTS, 
                 S&P GLOBAL MARKET INTELLIGENCE

    Dr. Hinde. Chair and Members of the Committee, good morning 
and thank you for inviting me to present to this Committee.
    My written testimony can be summarized in six parts.
    First, if I may, what authority can I bring to bear? I've 
been writing about the mining industry for 30 years at S&P 
Global Market Intelligence, as the world's largest database of 
exploration and mining activity.
    Second, a comment about the supply/demand scene in the USA. 
S&P Global has conducted two relevant studies within the past 
three years. In September 2014, we argued that a healthy, local 
exploration and mining sector is important for the American 
economy. And in mid-2015, we quantified the impact of 
permitting delays on mine development in the USA.
    The second of these reports identified the destruction of 
value of the results from even short delays in the permitting 
process whilst the first reports demonstrated a clear mismatch 
in the USA between consumption and the local supply of required 
metals and minerals.
    This country is still the world's largest economy and per 
capita metals consumption in the USA is far in excess of the 
citizens of other countries. In contrast, the USA ranks as only 
the seventh largest mining nation by value of production. This 
shortfall is especially regrettable because manufacturing 
activity is returning to the USA. This move is driven by 
manufacturers' desire to reduce the risks in their supply 
chains and a consumer's increasing concerns regarding corporate 
accountability. We found that the USA miners are highly 
efficient and generally apply best practices with regard to 
productivity, sustainability, and safety.
    Third, mining is a very uncertain business with geology and 
mineral endowment being extremely difficult to assess, and its 
companies being price takers rather than having the luxury of 
being able to set the price of their products. Because of this 
extra risk, the industry acquires financial returns that are in 
excess of most of business activities.
    The fourth of my six points is the USA offers some key 
advantages to miners including a stable political and economic 
environment, but most companies with comparable mineral 
resources and similar environmental standards offer a much more 
certain permitting process. Like companies and industries the 
world over, mining executives simply seek certainty in the 
legal and fiscal processes that they face.
    As one of my colleagues just mentioned, it takes, on 
average, seven to ten years to secure the permits needed for 
mines to reach production in the USA. In contrast and with very 
similar overall requirements, Canada and Australia are managing 
their average permitting periods of barely two years.
    In the USA, many agencies and stakeholders are involved 
with a requirement for multiple permits and rather undefined 
goals for indigenous groups, the general public, and non-
governmental organizations. Rigorous permitting is, of course, 
necessary and is to a similar standard to our knowledge in the 
USA, Canada, and Australia; however, the permitting process is 
much better defined in Canada and Australia with a shorter 
timeline for the various agencies to respond.
    Fifth, a quick note on the global scene. In our corporate 
exploration strategies we report, we identified $7.2 billion of 
global, non-ferrous exploration last year. That's not including 
iron ore and coal exploration. Only $500 million of this was 
spent here on exploration compared with very nearly $900 
million in Australia and close to $1 billion in Canada. Indeed, 
the USA exploration expenditure has fallen from the record $1.7 
billion spent on exploration locally in 2012. So current 
exploration is running at a third of the record level.
    Finally, an observation from a foreigner. The USA remains 
highly prospective from a geological point of view. 
Unfortunately, the country's existing permitting system 
presents a formidable barrier to the development of its own 
mineral wealth. This has left the USA unnecessarily dependent 
on local mines, whose remaining life is declining or on foreign 
sources of metals and mineral resources.
    Your country and its mining industry would benefit from a 
more streamlined permitting process, ideally, something similar 
to those already being applied by the world's leading mining 
nations.
    Thank you.
    [The prepared statement of Dr. Hinde follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Chairman. Thank you, Doctor.
    Mr. MacGillivray, welcome.

    STATEMENT OF RANDY MACGILLIVRAY, VICE PRESIDENT PROJECT 
              DEVELOPMENT, UCORE RARE METALS, INC.

    Mr. MacGillivray. Madam Chair Murkowski, Acting Ranking 
Member Cortez Masto, and distinguished Members of the 
Committee, I would first like to thank you for the invitation 
to testify before you today. It's a great honor to testify 
before the United States Senate and I hope to provide you with 
some valuable information regarding the state of the industrial 
base for the production of strategic and critical materials in 
the United States from the perspective of a domestic miner.
    I presently serve as the Vice President of Project 
Development for Ucore Rare Metals, a junior mining company with 
a rare-earth element project located in Southeast Alaska. Ucore 
is currently developing its Bokan-Dotson Ridge Rare Earth 
Project which presents the opportunity for near-term recovery 
of crucial, heavy, rare earth elements. Located in Alaska, the 
project would give the U.S., the world's leading consumer of 
rare earth elements, strategic access to a domestic supply.
    The issue of foreign mineral dependence is not new, but its 
importance cannot be overstated. At present, the People's 
Republic of China dominates the production of numerous metals, 
including rare earth elements, which are essential for the 
proper function of everything from smartphones in our pockets, 
to advanced weapons systems used by the modern warfighter. In 
fact, China exhibits a near monopoly on the production of these 
materials introducing a dangerous risk into our supply chains.
    Meanwhile, the U.S. has no operating producer of rare earth 
elements after the highly-publicized bankruptcy and closure of 
the only domestic rare earth mine in 2015. To date, the sole 
mitigation strategy adopted by the U.S. has been to stockpile 
small reserves of materials deemed to be critical and to 
promote substitution and recycling efforts, an inadequate 
approach given the criticality of these materials. Without a 
U.S. supply base, should the Chinese ever decide to curtail the 
supply of these materials to the U.S., we would be left without 
access, endangering both our domestic economy and our military.
    Furthermore, Chinese production of these materials often 
relies on outdated and environmentally destructive mining and 
processing practices. The solvent extraction separation process 
used extensively by the Chinese to recover rare earths has a 
low selectivity for individual elements, necessitating the use 
of numerous separation stages using highly corrosive chemicals 
and generating vast amounts of toxic and radioactive waste for 
which very little care is taken in disposal.
    To witness firsthand the toll that Chinese rare earth 
production is having on the environment, one need not look 
farther than the artificial lake located in China's Inner 
Mongolia region where black chemical sludge, a byproduct of 
solvent extraction, stains the landscape. This embrace of 
environmental pollution on behalf of the Chinese, in 
combination with the lack of worker protections, allows the 
Chinese to manipulate the market and effectively control global 
prices. Chinese producers have willingly undercut the rare-
earth price driving foreign competition out of the market while 
the Chinese government has refused to address illegal mining 
and trading operations which have led to greater supply, lower 
prices, and further consolidation of rare earth production in 
China.
    In light of the current situation and American dependence 
on these materials, the need for domestic sources and 
production is paramount to ensuring our national security; 
however, Chinese market manipulation over the past decade and 
notable failed domestic projects have left capital markets 
unwilling to fund critical material projects. Domestic mining 
and separation firms, with advancements in environmentally 
friendly technologies, would benefit from support to bridge the 
divide between operating on a pilot scale and full 
commercialization of the new technology.
    The technologies to secure American independence in the 
critical materials markets exist, but government needs to be 
the key to unlocking the door for a domestic supply of critical 
materials for energy and defense applications.
    Congress has previously been supportive of the domestic 
mining sector as seen by the introduction of legislation last 
Congress by the Madam Chair which would have promoted the 
development of green technology to meet the nation's demand for 
critical materials. Ucore remains fully committed to solving 
the critical materials issues facing our country and working 
toward solutions developed in coordination with Congress to 
alleviate our dependence on foreign nations for these 
materials.
    Thank you.
    [The prepared statement of Mr. MacGillivray follows:]
    
    
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    Chairman. Thank you, Mr. MacGillivray.
    Vice Admiral Cosgriff, welcome.

  STATEMENT OF VICE ADMIRAL KEVIN J. COSGRIFF, USN (RETIRED), 
     PRESIDENT AND CEO, NATIONAL ELECTRICAL MANUFACTURERS 
                          ASSOCIATION

    Admiral Cosgriff. Thank you, Madam Chairman. Members of the 
Committee, we appreciate the opportunity for the National 
Electrical Manufacturers Association to appear here today on 
this important subject.
    To put that into context, that's some 350 member companies 
in the electro industry, as we like to call it, and also 
importantly the medical imaging industry. Industry-wide that's 
some 400,000 American jobs with 7,000 facilities in every state 
of the Union. It's approximately $114 billion a year in 
production and $50 billion in exports.
    As you might expect, NEMA supports policies that provide 
greater assurance to our companies of stable, continuous, and 
affordable inputs for their domestic manufacturing. Challenging 
supply conditions and price volatility in those inputs can be a 
significant concern to U.S. companies in multiple sectors, 
including our own. When we speak to our members, supply chain 
risk management is very much on their minds every day.
    While some of our companies source raw materials, many are 
one or more steps away from that and purchase processed or 
semi-processed material that's more ready for the manufacturing 
effort. But one way or another, every one of our companies is 
dependent on reliable access to raw materials.
    In the area of rare earths, the supply crisis several years 
ago has eased due to multiple factors, including some changes 
in technology and also the market that has been commented on, 
including in China. But U.S. firms still remain largely 
dependent on shipments from China for rare earths.
    Foreign sourcing of lithium, not a rare earth, but 
nonetheless an important element, is significant as well, 
although not absolute.
    We're also hearing from our members about the state of the 
U.S. aluminum industry, and factors that are leading to 
occasional constrained conditions. A number of our 
manufacturers of electrical wire and cable report that previous 
suppliers have either gone out of business or are otherwise 
operating at reduced capacity.
    Copper, as you might expect, is another key metal, and 
about one-third of the total used is from overseas.
    In the area of medical imaging there is a metal substance 
of essential importance, specifically Molybdenum-99, I'll call 
it Moly 99, and its parent is the parent isotope of Technetium-
99m, call that Tech 99, is used in approximately 40,000 
diagnostic procedures a day. Tech 99 has a very short half-life 
and therefore must be produced on a continuous basis. The U.S. 
consumes about half of the world's Moly 99 and has no domestic 
source. Canada, which used to supply the U.S. with half of our 
needs, ceased routine production last year.
    In 2012, Congress enacted S. 99, the American Medical 
Isotopes Production Act as part of the Defense Authorization 
bill. We commend this Committee for its work on S. 99, and we 
encourage its oversight responsibilities to monitor 
implementation of this law so that patients can get the right 
scan at the right time.
    Returning to the bigger picture, we support a federal role 
in minerals policy, including research and development, as well 
as minerals information and analysis. It's important to add 
that a balanced mineral policy is an important support to 
domestic manufacturing and employment.
    Despite many efforts to date, many manufacturers' 
dependence on foreign sources of critical minerals, including 
rare earths and other raw materials, remains a concern. 
Companies manage this risk by diversifying supplies and, if 
possible, holding more inventory, both of which can impact 
operating costs and therefore, competitiveness. Having access 
to more secure, price competitive supplies closer to home, 
domestic as well as the other NAFTA countries, or Western 
Hemisphere, more broadly, is desirable.
    At the end of the day, the issue we are discussing is about 
whether the U.S. electro and medical imaging companies can 
manufacture what they need to manufacture here at home. Clearly 
this involves access to minerals, related information, and a 
regulatory environment that helps them compete globally.
    Thank you again for this opportunity and I look forward to 
any questions you may have.
    [The prepared statement of Admiral Cosgriff follows:]
    
    
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    [G    
    Chairman. Thank you very much for your testimony.
    Finally, Dr. Eggert, welcome.

   STATEMENT OF DR. RODERICK G. EGGERT, VIOLA VESTAL COULTER 
 FOUNDATION CHAIR IN MINERAL ECONOMICS, DIVISION OF ECONOMICS 
             AND BUSINESS, COLORADO SCHOOL OF MINES

    Dr. Eggert. Thank you. Good morning.
    I have three key points in my testimony. First, government 
plays an essential role in fostering domestic supply chains of 
raw materials through research and education which, in turn, 
are important determinants of innovation. Second, both 
recycling and new mines will be important in meeting future raw 
material challenges. And third, I would suggest that it is 
risky imports rather than import dependence itself that is the 
problem, and in turn, risky imports are but one aspect of the 
larger issue of supply chain risks and long term resource 
availability.
    Now consider research, education, and recycling in turn and 
starting with research.
    Two aspects of research, I believe, are especially worthy 
of government involvement. First, early stage research and 
development which the private sector acting alone is likely to 
underinvest in from the perspective of society as a whole 
because its benefits are risky, far in the future and difficult 
for private companies to fully capture. Second, activities 
aimed at facilitating the transition, the conversion of new 
knowledge to commercial products and applications insights from 
basic research often languish because of insufficient 
communication between basic researchers and commercial 
developers of new technology.
    More narrowly, and with respect to extracting and 
recovering materials from both mineral deposits and wastes, I 
believe there are two grand research challenges. The first is 
chemical separations. The challenge of separating one element 
from another in a mineral deposit or in a waste material. The 
second, resource efficiency, optimizing the recovery of 
multiple elements from the same mineral deposit or from the 
same waste product.
    Turning to education. Part of the issue with education in 
this area is basic science, technology, engineering and math, 
but part of it is discipline specific. The dearth of resource 
discipline graduates in fields like economic geology, mineral 
processing, extractive metallurgy and even material science and 
engineering is highlighted by a 2013 National Research Council 
study.
    With respect to recycling for the major metals, iron and 
steel, aluminum, copper, lead, zinc, there are already well-
established recycling industries and recycling already plays an 
important role in the supply chain.
    For minor metals, however, very little recycling occurs. 
Many, and I'm thinking about many of the so-called high-tech, 
specialty, or critical minerals and metals that are used in 
small quantities and yet provide essential properties or 
functionality to modern engineered materials, things like 
lithium and cobalt in batteries, neodymium and dysprosium in 
magnets, gallium and indium in electronics in flat-panel 
displays, and a variety of other applications.
    Both research challenges apply here, chemical separations 
and resource efficiency, when it comes to improving and 
enhancing recycling of and recovery of minor metals from waste 
products.
    With respect to recycling end-of-life products, as opposed 
to manufacturing wastes, demand for metals, almost certainly, 
will grow because of population growth, economic development, 
the lifting of many of the poorest people around the world out 
of poverty, and the improvement of their material well-being. 
Recycling by itself will not be able to meet this new demand 
because the quantities available for recycling today reflect 
the level of demand in the past. This is not to minimize the 
importance of enhanced recycling but rather to be cautious 
about the ultimate role of recycling in meeting our supply 
chain challenges.
    So, as I began, government plays an essential role in 
fostering domestic supply chains of raw materials through 
research and education.
    Thank you very much.
    [The prepared statement of Dr. Eggert follows:]
    
    
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        Chairman. Thank you, Dr. Eggert.
    Thank you all. We have heard very interesting comments this 
morning.
    I am going to begin with just a general question to 
whomever may want to jump in or multiples of you. This is the 
fourth hearing we have had in this Committee on the issue of 
mineral security.
    A couple of you have testified before the Committee before. 
We have heard from USGS before. Three of you have flown in from 
other countries. You are clearly paying attention to the 
situation here in the United States. Other countries are paying 
attention to this issue. I think, most notably, China.
    But here we are, and the information that you have given me 
this morning is that instead of lessening our dependence, we 
are actually increasing our dependence. We have increased it 
from just last year. We are not making headway on this issue.
    It is a little bit frustrating, maybe because I feel like I 
am a voice in the wilderness sometimes here on these issues, 
but I have been trying to raise the issue, raise the profile, 
speak to what it means when we are more vulnerable or relying 
more on risky imports, to use the terminology that was given 
here today. What are we doing wrong here?
    This smartphone that you all have in your pockets, that you 
are using to take pictures, it does not happen without these 
critical minerals. Those of you that flew here would never have 
been able to arrive had we not had these.
    So much of this is education, education, education. I think 
it, kind of, fits with my view of how many people, how many in 
this country, view energy in general. There is this immaculate 
conception theory of energy. It just happens.
    I am starting to think that same view holds true when it 
comes to how we are able to operate as a society. We do not 
make the connection to where our minerals fit in. What can we 
be doing more to make this connection?
    Dr. Hitzman, you mentioned the fact that to this point in 
time only one-third of the United States has been mapped. We 
clearly have some room to grow there.
    But from the perspective of educating, whether it is our 
manufacturers, who are part of that supply chain so I think 
they get it. But do we, as a society, get it?
    It is one thing when you mentioned that we are impacted by 
the ability to get a red car or a black car because the Chinese 
acted and cutoff those rare earths there. I don't think people 
get too alarmed about the fact that they might not be able to 
get the color of their choice. But when they view that this is 
a security threat, that changes the discussion, one would 
think.
    I am kind of throwing this out there for general 
discussion. What are we? Where are we failing to connect with 
Americans, not only John Q. Public out there, but folks in the 
White House as well? How do we raise this up beyond just this 
Committee?
    I welcome anyone to comment. Dr. Hinde?
    Dr. Hinde. I'd love to say I had an answer, but as I----
    Chairman. I was hoping for it.
    Dr. Hinde. I've been writing about this issue for 30 years. 
In fact, I launched an environmental magazine about 15 years 
ago to address these very issues.
    I mean, it stems, of course, to state the blindingly 
obvious, from a mistrust of the industry. I can't speak for 
here, but certainly in Europe, we were pretty bad miners in the 
last century and we were awful the century before that. Even 
the Romans didn't mine terribly responsibly.
    So throughout Europe we've got historical baggage. We've 
got some pretty shocking lignite, remains of lignite, mines. 
And so, most Europeans certainly grow up with a dislike, 
inherent dislike, of the mining industry.
    I'm a mining engineer, but neither of my sons went into 
mining, both went into accountancy. We have a serious issue 
facing the industry because at the school level, it's not 
understood.
    I think it's probably more serious than even you've painted 
it in that it's not just the link between metals and what we 
use. That should be doable. I mean, the popular, certainly in 
North America and Europe, should understand these things. They 
might choose not to notice.
    The more serious thing is just not getting mining. They're 
quite happy for it not to be in their backyard. They want 
someone else to do the hard yards and make the metal. As we've 
elucidated here, that isn't a very clever strategy for the 
future in terms of security of supply.
    But if you can have your products and someone else does the 
digging, that looks preferable to most people at the moment. 
So, that's not an answer to how to solve it, but it's clearly 
got to start at the school level, that responsible mining is a 
way forward. It just has to be done environmentally in a 
friendly manner which we are now doing.
    Chairman. Yes, I appreciate that.
    Mr. Barrios?
    Mr. Barrios. I would say also in terms of storytelling and 
comparing to other countries. If we compare the permitting 
process in the U.S. versus Canada, we can clearly see that in 
terms of scope and depth, the permitting process in Canada is 
very similar to the process in the U.S., the consultation 
process, the amount of rigor and discipline that goes into the 
process.
    I think talking about how the people are doing it and 
trying to address the issues that are becoming obstacles, to be 
able to be as effective as other countries in allowing mining 
projects to progress at an acceptable speed. And I think the 
timeline, what I mentioned before, is critical.
    If you look at the process in Canada, clearly the timeline 
is very different. A number of colleagues mentioned it. I mean, 
it's truly about being rigorous and disciplined with the amount 
of time that one is assigning for these permitting processes to 
take place. And it is important for companies like ourselves 
and other mining companies. If there is one thing which we're 
looking for is certainty. Clearly, that lack of certainty in 
the timeline does impact our ability to be able to put forward 
projects in the U.S. and make them as competitive as projects 
in other parts of the world.
    Chairman. Well, I appreciate that. I have, kind of, thrown 
it out to all of you. My time has expired, but if we want to 
come back to visit at the end of the hearing, if any of you 
have additional comments you want to add to that, I would 
welcome that.
    Senator Cortez Masto?
    Senator Cortez Masto. Thank you, Madam Chair.
    Let me follow up on this discussion on permitting because, 
as a new member to the Committee and somebody who is from a 
state that grew up with mining in our state, this is something 
I have constantly heard is the permitting process impeding, 
really, the movement forward when it comes to mining. I 
constantly hear it, but I don't hear specifics. Now I am sure 
our Chairwoman or Ranking Member and many others are focused on 
this.
    Can you give me an idea, when we are talking about a 
permitting process that has taken seven to ten years, what is 
it, specifically, that we can do at the federal level to 
streamline it or are there duplicative processes that I have 
heard from Dr. Hinde as well? What is it, specifically, that we 
can focus on to cut that time down to address what I have heard 
today from all of you?
    Dr. Hinde. I don't pretend to be an expert on USA 
permitting but we've, obviously, done quite a lot of surveys 
asking other people's opinions, but there were two primary 
differences.
    In Canada and Australia, for example, and certainly at the 
federal level there, they're also not coordinated. It's at the 
state level the difference comes in. Broadly speaking at the 
state level in Australia and Canada, one agency takes the lead. 
They set the goals, they set the timeframes and other agencies 
link to them. And in that way, they try and avoid overlapping 
requirements. The total requirements are no more rigorous. 
They're very similar, but what they do is they set the 
benchmark for other people to do and generally speaking, they 
hit the time tables.
    The second thing that is different is that in both those 
countries it is the mining company that does the environmental 
impact statement (EIS). They obviously use third parties. They 
use consultancies that, I think, can be relied upon, but the 
company pays for it and organizes it and does the timeframe. Of 
course, it's in their interest to drive it. If it's left as it 
is here with an agency to set the environmental impact 
statement, there isn't quite the same urgency. Clearly, the 
agency needs to monitor and make sure that EIS has been done, 
done adequately. More often than not, it's done by an 
international consultancy company, whoever it is that's tasked 
them with the requirement.
    Senator Cortez Masto. Thank you.
    Mr. Barrios, I am curious, any specific thoughts on how we 
can streamline it or concerns?
    Mr. Barrios. I think, similarly, I mean, when we look at it 
from a Canadian perspective, that my colleague mentioned as 
well, but I would really highlight if one looks at Canada the 
standards are very similar.
    It's about the timelines. It's about making sure the roles 
and responsibilities of each agency and the timeline base 
targets are agreed and published at the start of the 
application process so we all know what the timelines are and 
those are adhered to. And that, really, is one of the key 
elements that is making a difference in the permitting process 
where we're finding that in two to three years you can obtain 
them in Canada. It's been lengthening here in the U.S. from 
five to seven, now to seven to ten. And this really is hurting 
investment.
    Senator Cortez Masto. Thank you.
    Dr. Hinde. Can I, sorry?
    Senator Cortez Masto. Please.
    Dr. Hinde. Can I just add to that?
    The one thing I forgot to mention that we did find in our 
survey of a year and a half ago, was that here, unlike in 
Canada and Australia, sometimes the same requirement can be 
repeated over rather than sit down in the beginning and hear 
from the various interested parties what is it you need to test 
or check and put it together in one document and do it in one 
go.
    The mining companies here, to a certain extent, are asked 
to do one particular environmental impact assessment and then 
perhaps six months later someone else chips in and it's oh, I 
would like to do something slightly different and they do it 
again.
    Far better, clearly, to get it all done in one go, even if 
it's more rigorous at that point and takes longer. It's 
parallel permitting as opposed to in series.
    Senator Cortez Masto. Thank you.
    I know my time is running short, but Dr. Eggert, I am 
curious, your thoughts on this?
    As you well know, besides a school like yours, Nevada also 
has a College of Mines. I know that approximately 70 percent of 
mining engineers will retire within the next decade. And 
because fewer and fewer students are enrolling in mining 
engineering programs, we will not be able to replace them at an 
adequate pace.
    What recommendations do you have to increase enrollment of 
students in these programs so that we do have a robust 
workforce?
    Dr. Eggert. I think one of the key actions that would help 
improve enrollments in mining engineering, mineral processing 
and extractive metallurgy is actual research funding in this 
area that will allow faculty members in these departments to 
hire graduate students.
    Senator Cortez Masto. Thank you.
    Dr. Eggert. I mean the single thing that I would suggest.
    Senator Cortez Masto. Thank you, I appreciate it.
    I know my time is up. Thank you, Madam Chair.
    Chairman. Thank you.
    Senator Daines?
    Senator Daines. Thank you, Madam Chair, for having this 
hearing today. This is very important for my home state of 
Montana.
    I do want to thank the Committee and the witnesses today 
for highlighting the importance of critical materials for the 
United States and the very high hurdles we have to jump over to 
extract them.
    What too many people forget, and the Chair mentioned this 
in her opening comments, is that if the U.S. wants to continue 
to be a leader in high tech, in communications, renewable 
energy, we have to be a leader in critical mineral development. 
Everything from our cell phones, telephone lines and wind 
turbines require these critical minerals.
    In my home state of Montana, mining is a backbone, so much 
so that it is written into our state motto, ``Oro Y Plata,'' 
gold and silver. If you look at the Montana State flag, it says 
Montana on it and then there's Oro Y Plata. Those are the only 
words on it. They are in Spanish. In fact, you will see a 
shovel and a pick axe there next to a plow, going back to the 
very roots and the foundation of our state of agriculture as 
well as mining and natural resources.
    The Still Water Mine in Montana is the only, let me say 
that again, is the only producer in the United States of 
platinum and palladium, the only one.
    We are a major copper producing state as well.
    At the same time, Montana has received awards for our 
first-class reclamation work. Most Montanans are passionate 
about fly fishing and hunting and the outdoors and preserving 
the incredible, pristine environment that we have in Montana. 
And count me in on that.
    At the same time, we must continue to responsibly develop 
our resources so that moms and dads can still stay there, raise 
their children there, and still go to Walmart to buy an elk 
tag, so we do not turn into a land only for the rich and famous 
because we do not have jobs there that working families need to 
have a living wage. These jobs, the mining industries, provide 
that. We are only producing in Montana about one percent of our 
potential, so there is a lot there.
    We can begin to expand our critical mineral production by 
streamlining and speeding up the permitting process that was 
talked about here in your testimonies. The U.S., as was 
mentioned, has one of the longest permitting processes in the 
world. I will give you a couple of examples.
    In Montana, we have the Rock Creek and the Montanore 
projects. They have been in the permitting process, now I heard 
seven to ten years, we would be envious of that kind of result. 
The Montanore and Rock Creek projects have been more than 30 
years in the permitting process, and they are still not up and 
running. Do the quick math. Go back 30 years. Ronald Reagan was 
President. It seems like irony that we now have statues of 
presidents in Statuary Hall that were serving when the 
permitting process began some 30 years ago.
    Here is the impact for families in Montana. The Forest 
Service estimates the Montanore Project would provide full-time 
employment for 450 people. The Rock Creek Mine will provide 
more than 300 full-time jobs. That is $667 million in direct 
payroll over the life of the project, and $175 million in tax 
revenue.
    I can tell you, I spent a lot of time talking to my county 
commissioners back home, and they are struggling to find ways 
here to make ends meet from a tax base viewpoint. The indirect 
economic benefits are even greater than that.
    By the way, these projects are in Lincoln County. It is a 
county in my state that has one of the highest unemployment 
rates. They can benefit greatly from this. I spoke to a couple 
a few years ago from Eureka, Montana, in Lincoln County and 
they said, ``Steve, basically what we have in Lincoln County 
now is poverty with a view.'' We need to change that.
    Mr. Barrios, in your testimony you speak about the length 
and the duplicity of the permitting process. Could you expand 
your suggestions to simplify the process? I know you had 
somewhat a similar question before. Maybe specifically, what 
can this Committee do? What would you recommend to us in terms 
of action we can take here to try to streamline the process?
    Mr. Barrios. I think when you look globally at what are the 
overarching themes that a company like ours looks at when it is 
thinking about investment, it really is around regulatory 
certainty and it's in three areas. The reliable timeline of the 
permitting process, the second thing is creating certainty in 
access to minerals, and the third thing is finally having 
something that is reasonable around financial assurance, 
closure.
    If we look at the timeline, I think that's where we 
emphasize that's one of the critical elements that we need to 
ensure that, similar to what we have in Canada, there are set 
lengths that are adhered to.
    If we look at our Resolution Copper Project in Arizona, we 
started the permitting process in 2013. We've spent so far $1.3 
billion, and we're far from completing the process there. This 
is a mine that will supply, could supply, 25 percent of the 
U.S. copper needs, and create 3,700 jobs. It's quite staggering 
that now in another country like Canada, we would be having 
those permits in our hands and processing--progressing with the 
project. We are still, through the process, trying to obtain 
those permits.
    Senator Daines. Thank you. I am out of time, but it sounds 
like our neighbors to the north may have some examples of, 
perhaps, processes and some parameters that may be helpful for 
us here.
    Thank you.
    Chairman. Thank you, Senator Daines.
    Senator Stabenow.
    Senator Stabenow. Thank you, Madam Chair, and thank you to 
each of you.
    Coming from a state like Michigan, where particularly in 
Northern Michigan in what we call the upper peninsula, which 
has been mineral rich for a century, when watching things 
change there based on mining and having jobs and then not 
having jobs, I certainly understand the economic impact of what 
is being talked about.
    Looking at your testimony I know that you are talking 
significantly about permitting issues and regulatory barriers 
impacting the industry, but I would like to talk for a moment 
about the importance of transportation infrastructure in all of 
this.
    In Northern Michigan in the upper peninsula in Sault Ste. 
Marie we have a lock and dam that is vital to transporting 
mining goods, including iron ore, throughout the Great Lakes 
region and the country. According to the report by the 
Department of Homeland Security, a shutdown of the Sault locks 
would likely result in all North American production of mining 
equipment and automobiles and farming equipment to stop within 
weeks.
    We have a very old infrastructure there, only one of the 
locks is big enough to handle most of the cargo going through 
there. I think we are on borrowed time at the moment with that 
lock.
    Eleven million people would become unemployed if that lock 
shut down, even for a few weeks, and the North American economy 
would enter a severe recession.
    I wonder if each of you might speak to how important it is 
from a mining industry standpoint to have well-functioning 
locks and dams, roads and bridges and rail to operate 
efficiently and compete in the global marketplace? And what 
does our aging infrastructure mean for our ability to move 
minerals and materials where they need to go?
    I guess I will start at the end, yes.
    Dr. Hitzman. Thank you, Senator.
    In terms of the USGS, we're not so much looking at the 
infrastructure, we're looking at where to get the minerals. 
Michigan, most people don't know, was actually the major 
supplier of copper to the world for a number of years.
    Senator Stabenow. Yes, that is right.
    Dr. Hitzman. Clearly in any area of the world or the 
country where we're going to do mining, one of the things that 
the companies look for is sufficient infrastructure to actually 
move materials and then the mine products out. So it's clearly 
a critical part of the equation.
    Senator Stabenow. Mr. Barrios?
    Mr. Barrios. I think, similarly, one has to look project by 
project. It's very difficult to give a general answer. 
Generally it really depends where the resource is and how far 
it is to get it to market. So it is a critical element, and it 
makes a big difference in the evaluation of a project. That's 
usually, the transportation costs, are a significant cost of 
exploration. So it is a very critical, important element. But 
it really depends, resource-by-resource.
    Senator Stabenow. Dr. Hinde?
    Dr. Hinde. Yeah, the important part, I think, of 
infrastructure is to recall that infrastructure is absolutely 
crucial for bulk commodities, such as in your state, Senator. 
Clearly coal, copper and those big, bulk commodities, railway 
lines and infrastructure and ports are absolutely required.
    But of course, half the mining industry, in terms of 
expenditure, is gold and that you can fly out by helicopter. 
It's less required for infrastructure, so it rather depends, as 
my colleague said, on a project-by-project basis.
    The other thing to bear in mind is the USA constantly rates 
right at the top in terms of infrastructure on a world 
perspective. We all know, in this room, that your 
infrastructure is aging and needs work. But on a world 
perspective, it is highly regarded. And so, companies come here 
because of your infrastructure, notwithstanding your problems.
    And so, you know, there are other things that are damaging 
the industry here like permitting rather than infrastructure.
    Senator Stabenow. Well, it is interesting though being in 
China and being in Brazil and other places where they are 
putting large amounts of money into infrastructure. At some 
point, they are going to be ahead of us because we have not 
been doing that.
    Dr. Hinde. Indeed, yeah.
    Senator Stabenow. Yes, so--yes, Mr. MacGillivray?
    Mr. MacGillivray. The only thing I could possibly say is 
that in Alaska we are actually looking for the roads in the 
first place.
    [Laughter.]
    Sort of, roads to resources is our common theme that Madam 
Chair has been a proponent of. So, from our perspective, you 
have a good problem that you are able to readily access your 
resource base.
    Senator Stabenow. Vice Admiral?
    Admiral Cosgriff. If the Chair will indulge me, thank you 
for asking a question about ships.
    Senator Stabenow. Yes.
    Admiral Cosgriff. But if you're going to move something 
like an ore or heavy, dense commodity, then you'll want to move 
it on water. And if you can't get it out on water that flows, 
you'll want it in a pipeline and if it doesn't flow, you'll 
want it on a train and so on down the path.
    At the far end of this process we've received these 
materials largely over road, rail and road, and then when we 
finish our jobs as manufacturers, they go out the other side 
on, principally, road and rail.
    This full scope look at our infrastructure is, in our 
opinion, long overdue. It, in and of itself, is an investment 
in real estate or in infrastructure, transportation 
infrastructure, along with other types, like electrical, which 
will pay dividends for this country over the longer run.
    Senator Stabenow. Thank you.
    Dr. Eggert?
    Dr. Eggert. Yes, I agree with what others have said. 
Infrastructure, in general, is important for mining and other 
forms of economic activity. With respect to mining, it's 
especially important, as Dr. Hinde said, for the bulk 
commodities.
    Senator Stabenow. Thank you, Madam Chair.
    Chairman. That is a great question, and it is so key to 
everything.
    As Mr. MacGillivray says, we have got the resources there 
but we do not have any way to get to them or get them out. So 
infrastructure is key and certainly something that this 
Committee has been focused on of late.
    Senator King.
    Senator King. Thank you, Madam Chair.
    Some specific questions.
    First, Mr. MacGillivray, what is the nature of rare earth 
mining? In other words, is it tunnels, pits, mountain top 
removal? What are we talking about here in terms of how it is 
actually, physically, done?
    Mr. MacGillivray. So the nature of the deposits do vary. 
There are proposed projects in the United States that are open 
pit but our project in Southeast Alaska is a vein-hosted 
deposit; therefore, it would be accessed by underground 
methods.
    Senator King. So it varies? It varies according to the 
deposit and where it is?
    Mr. MacGillivray. Based on the geological occurrence.
    Senator King. Are there any special environmental problems 
associated with these particular minerals as compared with coal 
or oil or gas?
    Mr. MacGillivray. No, I don't think there's anything unique 
with rare earth deposits. Maybe there is, you know, some slight 
enrichment in uranium and thorium that has to be considered and 
dealt with appropriately, but by and large they're similar to 
other commodities.
    Senator King. Mr. Hitzman, do we have rare earths, 
significant deposits of rare earths, in the United States if we 
could do the development necessary?
    Dr. Hitzman. I think you're hearing from one of our panel 
members who has one. So that's one, and there are others that 
companies are working on in various parts of the United States, 
Wyoming and of course, the large deposit in Southern California 
that has gone in and out of production. So, the answer is yes, 
we do have deposits.
    Senator King. Is there more, is there potentially more, if 
we had better mapping and geology?
    Dr. Hitzman. Absolutely.
    Senator King. I know the Chinese, for example, are buying 
up mines and resources around the world, not necessarily in 
China, but they are buying properties in Africa and South 
America. Is that, are our mining companies doing something 
similar? Are we looking all over the world for these materials?
    Somebody?
    Dr. Hitzman. I can answer that from USGS.
    Yes, American mining companies are exploring around the 
planet. Just like Rio Tinto which is a major, multi-national 
company working all over the world. Freeport and other 
companies in the United States, Newmont, are also doing the 
same.
    Senator King. Okay. We have talked about the fact that we 
are dependent. I commend the Committee's attention to the chart 
the Committee staff included that is really pretty shocking 
that shows--we are 100 percent dependent on 21 minerals from 
other countries, which is a dangerous place to be, particularly 
when they have strategic value.
    What is the bottleneck? I know you have talked about 
permitting. It sounds like we have a loss of engineers; we have 
financing issues, in part relating to permitting; we have 
permitting; and, we have fundamental geological research. Is 
that a good list of what the obstacles are? Does somebody want 
to echo that?
    Yes, sir?
    Dr. Eggert. Yes, that's a reasonable list. It's, I would 
say, not a single factor, but a combination of several factors.
    With respect to rare earth resources, in particular, there 
are special technical challenges associated with separating the 
rare earth elements from one another.
    Senator King. Does that have to happen at the mine or can 
it be shipped somewhere else with the separating happening 
somewhere else?
    Dr. Eggert. Typically what happens is that the mineral 
resource is concentrated at the mine site and then often, 
initial separation. There are 15 or so rare earth elements and 
the initial separations involve separating them into, 
basically, two or three piles.
    Senator King. Okay.
    Dr. Eggert. And then there are subsequent separations that 
can take place at the mine site or elsewhere.
    Senator King. I want to talk a bit about permitting, and I 
know I am running out of time.
    Quick question. If federal lands are used for one of these 
mines, are there royalties paid to the taxpayers for the 
extraction? Mr. Hitzman?
    Dr. Hitzman. Yes.
    Senator King. Okay, so there are royalties that come back 
for whatever the value is of the mined minerals.
    Obviously, Madam Chair, we have got to talk a lot about 
permitting. I would like to know, specifically, where the 
bottlenecks are in the permitting. And is it a lack of 
deadlines, is it multiple studies, is it multiple agencies?
    In Maine we had these issues and we, in part, solved them 
by having a lead agency where it was a one stop permitting. The 
lead agency would coordinate the studies that were necessary.
    I am getting a lot of nods. Is that a----
    Dr. Hinde. Yeah, that's exactly the issue and that's what 
they essentially do in Canada and Australia, somebody takes the 
lead and organizes all the other interested parties.
    Senator King. I take it that does not happen here? You have 
got to get 27 separate permits.
    Dr. Hinde. It would be, appear to be, the exception rather 
than the rule.
    Senator King. So that is something, Madam Chair, obviously, 
we want to look at.
    My final question is for you, Madam Chair. Are you going to 
reintroduce S. 883, or have you?
    Chairman. From this wonderful hearing I plan on 
reintroducing it if we need to add anything, but the purpose of 
the hearing was designed to help us, kind of, supplement that, 
if necessary. So yes, I am intending to reintroduce S. 883 and 
would welcome the support from other colleagues.
    Senator King. Well I would like to work with you on this 
because, based upon my service on the Armed Services and 
Intelligence Committees, this is a national security issue and 
I think we need to find ways to have a predictable and timely 
permitting process that still adequately protects the 
environment. So I would like to work with you on that.
    Chairman. I appreciate that. Know that I absolutely concur 
in terms of the security perspective. It is something that we 
need to be working on, so I appreciate that.
    Senator Barrasso.
    Senator Barrasso. Thank you, Madam Chairman.
    Dr. Hitzman, soda ash producers in Wyoming, like so many 
others in the minerals industry, face increasing transportation 
costs, as well as intense competition from foreign markets. The 
cost to ship soda ash from rural Wyoming to ports and domestic 
consumers is substantial. So foreign suppliers are able to 
subsidize their production and do not face many of the 
regulatory overheads that the suppliers in the United States 
face.
    In your view, what can Congress do to ensure a strong, 
domestic market so that American producers are able to remain 
competitive?
    Dr. Hitzman. Well, it's, sort of, many different things, 
not one individual thing. One is ensuring that the 
transportation infrastructure exists to help get things to 
market. Ensure that various parts of the tax code work to the 
benefit. That's something that's coming up. And actually, 
ensure that producers have, as other people have said, 
certainly with how the laws are applied to the minerals 
industry.
    Senator Barrasso. Nearly all of you on the panel today have 
suggested in one way or another that the United States should 
reduce our reliance on imported minerals for either economic or 
national security reasons. Senator King just made that 
reference.
    The other side of the coin is improving the ability to 
export raw materials and goods. You know, in Wyoming and in any 
other mineral producing state, our resource industries require 
access to foreign markets and you need to get through ports. It 
is becoming increasingly more difficult for these industries, I 
believe, to gain access to these ports.
    Mr. MacGillivray, to your point, you discussed ongoing 
environmental issues with Chinese production of certain 
minerals that the United States also produces. So in your 
opinion, what steps can Congress take to improve trade pathways 
through coastal ports so that these cleaner, American-made, raw 
materials and goods have access to foreign markets?
    Mr. MacGillivray. So in my answer I'd like to restrict my 
comments to rare earth materials, critical and strategic 
materials.
    As Dr. Eggert correctly identified, the crux of the issue 
with production in the United States is the separation 
technology. It's the sole reason that China dominates the 
monopoly that they do with rare earth production right now 
because they have limited regard for the environment so they 
use a technology called, or a technique called, solvent 
extraction.
    Ucore Rare Metals knew when we were permitting the Bokan-
Dotson Ridge Project that solvent extraction would not be 
permittable in Southeast Alaska, an environmentally sensitive 
area, so we shopped the world for alternative technologies and 
came across a Nobel prize winning technology called molecular 
recognition technology. It's a technology that's not only 
limited to mining, it's also used in the healthcare industry. 
But the basis of it is ligand based, so there are no solvents. 
There are no extreme pollutants from this process. It's very 
innovative and adapted toward this issue.
    So, I guess, a shorter answer here is that, some sort of 
support to help develop rare earth separation in the United 
States will enable us to have domestic supply and then be able 
to export, eventually, materials to other manufacturers 
worldwide.
    Thank you.
    Senator Barrasso. Thank you.
    In your written testimony, Dr. Eggert, you identified the 
need for the government to establish an efficient framework 
that both protects the environment and considers the needs of 
the community where the development occurs, and I agree.
    Dr. Hinde, in your written testimony you mentioned that new 
mines can lose one third of their economic value as a result of 
delays in production, more than 30 percent of the value of a 
mine could be lost because of permitting delays.
    In Wyoming we have one of the biggest reserves of rare 
earth minerals in the world, but companies face decades long 
permitting delays and tens of millions of dollars in up-front 
costs. So, I believe, now is the time that we should create 
some certainty in the job market and in national security.
    Dr. Hinde, Dr. Eggert, can you just talk a little bit about 
how much certainty do you think addressing these unnecessary 
permitting delays would bring to the industry, and how do we 
eliminate these unnecessary and unreasonable permitting delays, 
especially those not caused by the applicants themselves?
    Dr. Eggert?
    Dr. Eggert. I think Dr. Hinde made a couple of very useful 
suggestions, the appointment of a lead agency that establishes 
the framework and a timeline for the permitting process.
    More generally, I think what companies are looking for is 
certainty in a process as opposed to certainty in actual 
outcomes. In other words, a process that gives them a fair 
hearing, you know, in what various parties, all parties, would 
consider to be a reasonable timeframe.
    Senator Barrasso. Okay.
    Dr. Hinde?
    Dr. Hinde. Yeah, essentially, exactly the same. I mean, 
almost across mining, it's certainty whether it's in tax or any 
sort of legislative and working environment. It is just 
certainty. Given that, we can plan accordingly.
    Senator Barrasso. Thank you.
    Thank you, Madam Chairman.
    Chairman. Thank you.
    Senator Cantwell.
    Senator Cantwell. Thank you, Madam Chair, and thanks for 
holding this hearing.
    I had a chance to chair a hearing a few years ago on 
critical minerals in general, so it is very important for us to 
continue our focus in this area.
    Dr. Eggert, I wanted to ask you about recycling of critical 
mineral materials and what you think the recycling 
opportunities are for us, as it relates to supply?
    One of the things we have been proud to do in the 
northwest, as we shift to composite manufacturing, is to look 
at recycling as a way to drive down the cost of composite 
materials for smaller businesses. I wondered what you thought 
about, as we look at shortage issues, looking at recycling of 
product too?
    Dr. Eggert. I think recycling has an important role to 
play, and its role can be enhanced.
    As I indicated in my written and oral testimony, very 
little recycling takes place at present of the, so-called, 
miner or specialty metals that appear in small quantities and 
yet, provide essential functions to modern materials.
    A key challenge, part of the challenge, is technological. 
Elements like indium in flat panel displays are there in very 
small quantities and therefore, the economic case is not going 
to be made on the basis simply of indium, but the ability to 
recover several materials.
    The current technologies really focus on the major, most 
valuable, elements in a product and there's technical work to 
be done at, what I call, the resource efficiency, optimizing 
the recovery of multiple elements from a multi-element product, 
like a smartphone or a television set.
    And it's really a similar set of issues to recovering 
multiple elements from a mineral deposit. Most mineral deposits 
contain multiple elements, only a couple of which are actually 
recovered for commercial reasons.
    Senator Cantwell. How do you think we could proceed in this 
area? I know some of our labs are doing work, and do you think 
the private sector just continues to----
    Dr. Eggert. Well, I think the private sector is doing work 
in this area.
    A number of national labs are and in fact, I'm involved in 
an entity called the Critical Materials Institute which is a 
Department of Energy-funded research consortium that has as its 
members at universities, companies and national labs. It 
carries out early stage research related to, among other 
things, recycling of critical materials. Industry partners help 
us identify key challenges and important problems. And so, I 
think a continuation, perhaps an enhancement, of this type of 
public/private partnership that forces companies and national 
labs and university researchers to talk to one another, better 
than maybe they have in the past.
    Senator Cantwell. I personally like those models because 
you are then getting the maximum out of everybody at the table. 
I am very big, obviously, on collaborative efforts in general. 
So anyway, we'll look forward to discussing this with you 
further.
    Thank you, Madam Chair.
    Chairman. Thank you, Senator Cantwell.
    Senator Lee.
    Senator Lee. Thank you very much, Madam Chair. Thanks to 
all of you for being here today.
    Mr. Barrios, you mentioned a shocking number, a significant 
number, that Rio Tinto has spent--some $1.3 billion on 
permitting studies, on permitting, on studies and on shaping 
the Resolution Copper Mine. Now, this is great. We love to see 
investment in these kinds of things. I am glad that you are 
able to put those resources into it and that you have access to 
resources that will benefit consumers in America and throughout 
the world.
    My concern is that our current regulatory regime makes it 
very, very difficult for anybody to do anything. It basically 
prohibits mining investment from non-Fortune 500 companies. 
There are very few companies out there, very few people 
anywhere, who can afford this type of investment.
    As if the current regulatory burden were not enough in this 
area, on January 11th of this year, the Obama Administration 
proposed a rule to create additional bonding requirements under 
section 108 of CERCLA for hard rock mining. If the proposed 
CERCLA rule were finalized, tell me, sir, what effect might 
that have on the mining industry and on your ability to extract 
critical minerals?
    Mr. Barrios. Thank you, Senator Lee, for that question.
    The CERCLA 108(b) for us is clearly a disincentive, but 
furthermore, I would say in terms of investment, because of the 
burden it implies, but the issue which is a concern is the 
duplication in terms of financial assurance at the state level 
and the federal level. This is really an area where we could 
see some simplification and avoid duplicating rules and 
regulations that are not adding additional value.
    Senator Lee. I think everyone here agrees that mining 
companies and industrial producers need to be liable, need to 
be responsible for any disasters they create for superfund 
sites they create, that, of course, have to be cleaned up. So 
that is not in dispute. If a company goes bankrupt or if a 
company walks away from a contaminated site, the American 
people should not be faced with having to either foot the bill 
for the cleanup or, alternatively, face the catastrophic 
consequences associated with just leaving it there. What 
bonding requirements and regulations, state and federal, are 
currently in place to ensure that mining companies leave mining 
sites in a stable condition?
    Mr. Barrios. The issue that we see, and I mentioned before, 
really is around the CERCLA 108(b) rule. It is an example of a 
regulation which is duplicative and unnecessary. We already see 
the current programs that are in place address the risk of 
mining and mining processing sites and prevents these sites 
from becoming a superfund liability. So for us, really, this 
renders the current rule being proposed unnecessary.
    Furthermore, I think we can say with certainty that the 
practices that lead to contamination of groundwater, soil and 
wetlands in the past, simply are not allowed today under the 
many state and federal requirements that we must meet.
    Senator Lee. So in your opinion those existing requirements 
obviate the need for these new regulations?
    Mr. Barrios. Yes.
    Senator Lee. Rio Tinto Kennecott has, of course, a long 
history in my state, in Utah. You have been operating in the 
Salt Lake Valley for over 100 years and plan to continue 
operating for a significant amount of time to come, and we are 
happy about that. But mining is not always easy. In 2013 the 
Kennecott mine suffered the mine slide which was very 
significant, and it was difficult.
    Can you describe the recovery process and also other 
sustainability efforts you have in place?
    Mr. Barrios. Yup.
    Rio Tinto was aware of the slide potential in February 
2013, and we began preparing for a safe and minimal impact 
event. We had nine layers of safety in place to monitor the 
material movement and safety was the number one priority at the 
time and it continues always to be at Rio Tinto.
    We were very happy to report that nobody was injured during 
the event, and all the personnel were evacuated before the 
slide occurred.
    We were also very proactive in engaging with the key 
external stakeholders prior to the slide, and the community was 
very appreciative of knowing the information beforehand. To 
this day, they still praise Rio Tinto for the transparency 
around this event.
    The slide was a slide of 150 million tons which took place 
in the night of April 10th, 2013. The slide material would fill 
enough rail cars to stretch three-quarters the way around the 
world. It was quite a material slide.
    The overburden we recovered very fast. The overburden was 
mined three days after the slide, and production started 
operating 17 days after the event. So very, very fast recovery. 
And we did spend about over a billion dollars to remediate the 
slide and materials. So quite a big commitment for the mine and 
to continue operating the mine for years to come.
    Senator Lee. Thank you very much.
    I see my time has expired. Thank you, Madam Chair.
    Chairman. Thank you, Senator Lee.
    Mr. Hitzman, I want to ask you where we are with the USGS 
budget and how much of your budget, the agency's budget, 
actually goes to the minerals work each year.
    I am concerned that as we talk here today and try to shine 
a spotlight on things that we are not doing all that we need to 
be doing from an agency perspective, from the federal 
perspective, in making sure that we have the information, the 
data, the analysis, the mapping. Within USGS, how much time and 
how much of the budget actually goes to the minerals aspect of 
the work that the agency does?
    Dr. Hitzman. I actually don't know the exact percentage but 
it's not the largest of the mission areas in the Survey. It's 
one of the smaller mission areas.
    The budget, over time, decreased for a number of years, but 
in the last couple of years has had a slight uptake and 
stabilized. Of course, now we're under a CR, so we're where we 
were last year.
    Chairman. But as you have indicated to the Committee here 
one-third of the mapping that you believe that we need to have 
done as a nation, only one-third has been completed, so we 
obviously need to be resourcing this a little bit better. Is 
that a correct statement?
    Dr. Hitzman. It would be good to do that. Remember that not 
all the mapping is done through my part of the Survey.
    Chairman. Right.
    Dr. Hitzman. As well.
    Chairman. Right.
    Dr. Hitzman. So it's done through other pieces of the 
Survey.
    Chairman. Right, okay.
    You said in your testimony, in speaking about what was done 
with the Alaska mapping, recognizing what it is that we have 
allows us to then move out and do more. It allows those that 
are looking at it from an investment position to have a greater 
degree of certainty going forward. It seems to me that if we do 
not have solid mapping, it just further slows our process 
there.
    Vice Admiral Cosgriff, as you represent those in the 
manufacturing industry, are you hearing concerns from your 
member organizations about the growing vulnerability that we 
have as a nation and that they have as U.S. manufacturers with 
the growing realization that we are relying more and more on 
imports?
    Again, I think it was you, Dr. Eggert, you said it is not 
necessarily relying on imports so much as risky imports. But 
are you hearing concerns from your members about this issue and 
do you see growing pressure to see more action?
    Admiral Cosgriff. I don't think they would say it in that, 
sort of, global way you did about, sort of, a risk to the 
United States manufacturing, per se. It would tend to be more 
particular.
    I can give you a good example though of how close that they 
watch where their supplies are coming from. You recall a few 
years ago a large-scale strike on the west coast which created 
the opportunity for a major disruption in supply chains coming, 
mostly, from the Far East. And so, the response to that was, as 
you'd expect, with things moving on ships you now have to find 
a different port for the ship to go to. You have to figure out 
where your inventory stocks are, for how many days of 
production you have left before that ship gets to wherever it's 
going to get to. What are your alternative sources of moving 
that input from, let's say, Long Beach, California, via rail to 
someplace on the east coast and then by truck to your plant?
    So, that was a major event, and I think it served as a 
wakeup call for a lot of our companies to pay far more 
attention, even more attention, than they already are paying to 
the supply chain. I think, to some extent, the discussion about 
NAFTA is having a similar effect. That's a material effect on a 
supply chain, in this case, closer to home, a very mature 
supply chain, that again, has their attention and that we have 
to get right so that we don't disrupt those supplies.
    The bottom line, though, it is a globally sourced supply 
chain still with the few exceptions we've talked about today 
that do have the attention of our company's rare earths, I put 
at the very top of that.
    Chairman. Yes, I can remember when the Chinese effectively 
cut off all sources to Japan over a dispute with Japan. It 
certainly got the attention of those in Japan and, I think, 
those of us in this country as well because you realize then 
the real stranglehold, the chokehold, that China has when it 
comes to the rare earths.
    Dr. Eggert, you have spoken a little bit in your testimony 
here today, as well as in your written testimony, about 
minerals research and we have discussed the mapping aspect of 
it. But what research are we seeing being conducted at our 
universities, at our national labs, the Critical Materials 
Institute, to make the mining, the processing, and the end use 
of critical minerals more economically viable? Are we seeing 
the level of research that you believe is necessary?
    Dr. Eggert. I'm not sure I can speak to the level of 
research. I guess my bias would be, as researchers, we would 
like a higher level of funding.
    But I can describe what's happening using the Critical 
Materials Institute, this Department of Energy-funded research 
consortium that I mentioned earlier.
    If you think about supply chain risks or long-term resource 
availability, there are really three solutions, and technology 
plays an important role in all three.
    There's first of all, technology that enhances and 
diversifies production, technology that enhances or reduces 
waste, and technology that helps us use less. And so, it's 
process engineering in the first two cases and it is material 
science in engineering in the third case.
    The Critical Materials Institute is carrying out research 
in all three areas. As I indicated in my written testimony, I 
think of the many research challenges, the two grand 
challenges, or at least two of the grand challenges, are 
chemical separations, which are important both for mineral 
resource development and production, and the recycling of 
manufacturing wastes and end of life products.
    And so, these two types of research are really quite 
complementary in terms of both the chemical separations and the 
other one that I mentioned, resource efficiency. It's really 
the same types of research and process engineering.
    And the Critical Materials Institute is making progress on 
more efficient methods for separating rare earth elements from 
one another, from recovering lithium from domestic brines, to 
recycling rare earth magnets from hard disk drives, for 
example.
    Chairman. I want to have Mr. MacGillivray speak 
specifically to the process there at Ucore, but first, Mr. 
Barrios, I understand that you are working on a project with 
DOE's Critical Materials Institute to improve recovery rates 
for minerals. What can you describe about this partnership that 
you are working on with the Critical Materials Institute?
    Mr. Barrios. In our copper deposit in Utah, copper is a 
gateway material. In addition to copper, we produce olibanum, 
gold, and silver. But we also extract other metals like 
rhenium, which is quite critical to the U.S. national defense, 
and it's one of the critical materials.
    And what we've been doing in this work with the Department 
of Energy and the Critical Materials Institute is to continue 
exploring how we can extract more rhenium, but also look at 
other potential metals that we could extract together with 
copper. One of them is tellurium, which is used to increase 
efficiency in solar, converting solar into electricity and it 
increases the efficiency by about ten percent, exacting a key 
contributor to the challenges of climate change. So we are 
working very actively now to try and understand what other 
minerals we can actually produce at our Kennecott Copper Mine.
    Chairman. Good, good.
    Mr. MacGillivray, I want to have you go into a little more 
detail for the Committee about this MRT technology, the 
Molecular Recognition Technology, because as you have 
described, this technology, I do not know whether we describe 
breakthrough as the appropriate term, but if it is a reality 
that the permitting for this chemical extraction process is not 
going to be allowed in this country, then much of what we are 
talking about becomes moot and we just say we will rely on it 
for others.
    But I have had the benefit of a brief from Ucore on the 
specific technology. If you can, in layman's terms for the 
Committee's benefit, please explain what MRT actually does, how 
it is different from the chemical extraction process, and 
really why it works environmentally.
    Mr. MacGillivray. Thank you for the question.
    So I mentioned earlier that Ucore recognized that solvent 
extraction would not be permittable in the United States, let 
alone Southeast Alaska, which is very environmentally 
sensitive. And when we shopped worldwide, we landed in Utah.
    There's a company there by the name of IBC Advanced 
Technologies, and they have been in the metals separation 
business for over 20 years. They use a ligand technology. This 
is a highly selective, kinetically rapid, selective method of 
absorbing individual elements onto their ligand. They had not 
developed ligands for rare earth elements. They were working 
with other metals commercially. So Ucore invested money with 
them to specifically develop a ligand specific to rare earth 
elements. They conducted bench scale testing using the Bokan-
Dotson Ridge ore and individually separated all 15 of the 
lanthanides that we had for that project. Since that time, 
we've invested into a pilot plant and up scaled that technology 
into, you know, a pilot plant scale.
    The next step that we would like to pursue is the 
commercialization of this technology. We're very confident that 
it will work and be able to supply rare, individual rare earth 
elements for the United States, whether those sources come from 
recycling or heavy minerals sand by-product or ore itself from 
the Dotson Ridge project.
    But I think initially we're going to concentrate on by-
products where we can find concentrates of rare earths, like 
Dr. Eggert mentioned, and then using that clean, green 
technology, be able to permit a facility in the United States.
    Chairman. If you have gotten to the point where you believe 
the pilot project is successful, why do you feel that you need 
federal resources to assist with commercialization?
    Mr. MacGillivray. Well naturally, we would probably start 
out fairly small, and we are competing in a monopoly situation 
with the Chinese. So the private sector markets are somewhat 
supportive but it's really taking that first leap, that little 
shot, as to what kind of advantage can we provide to get that 
first step. And we believe that domestic supply of individual 
rare earth elements in the United States is the necessary first 
step.
    Chairman. Has there been any interest expressed by the 
Department of Defense?
    We have talked a lot about security here, security of 
supply and all that entails and specific as to China and 
China's role when we are talking more about rare earths. Have 
you had any expressed interest from DOD?
    Mr. MacGillivray. Certainly some of our experienced 
consultants here in Washington, have a history with the 
Department of Defense, so we're very strong in those 
communications in that area.
    Again, the crux of the entire situation is the viability of 
the technology to actually separate out these. So we need to 
have, sort of, a commercial scale plant to initiate that supply 
to build that confidence and then the things start rolling.
    Chairman. And then to go to a question that was raised by 
Senator King and the requirements for being able to do the 
separation at the site.
    You mentioned the location of the project that Ucore is 
looking at--Bokan--is in Southeastern Alaska.
    Mr. MacGillivray. Yes.
    Chairman. My hometown, where I was born and raised in that 
same region, is environmentally sensitive.
    If you were to go to commercialization, what assurance can 
you give me to provide to Alaskans that there is a level of 
environmental safety and attention to the nature of the 
environment there and that it would not be at risk?
    Mr. MacGillivray. Certainly.
    I believe that Alaskans have great confidence in the 
scrutiny that the state provides during the permitting process. 
State engineers would certainly take a look at our technology, 
understand the water balance that goes on within the processing 
and the chemical characterization each step of the way.
    The Bokan-Dotson Ridge Project is actually fairly 
innovative in itself in that should we be able to get that mine 
up and running, that due to x-ray ore sorting and MRT 
technology, we'll be backfilling 100 percent of the milled 
tailings back underground. So the project description for that 
project, the mine project, is very, you know, it's something to 
be proud of.
    With respect, now we look more toward, well, the first 
step, because we like to phase our approach to entering into 
the rare-earth space. The first step would be building the 
separation plant in isolation. So probably not on the project 
site, but in a good location with infrastructure.
    All I can say is that the permitting regime is strict and 
the reviews will be thorough, and I believe that once 
understood this ligand-based technology is exemplary.
    Chairman. It always gets your attention when a process that 
involves issues related to toxins, to toxic waste here, can be 
referred to as a ``green'' technology. So there is a lot of 
interest in what you are pursuing.
    Mr. MacGillivray. Right.
    Chairman. I look forward to talking with you more about it.
    Let me turn to Senator Cortez Masto.
    Senator Cortez Masto. Thank you, Madam Chair, and I 
apologize for having to leave. I have a competing Banking 
Committee meeting going on, but I am very interested in the 
discussion today.
    Dr. Eggert, you may have talked a little bit about this 
while I was gone, and this is the issue of lithium mining.
    In Nevada, we have lithium mining and it is important to 
both a booming technology industry--we have Tesla there as well 
as our geothermal companies that procure an abundant amount of 
geothermal resources in my state.
    I am curious. Are there technologies that help both these 
industries utilize that lithium so that it is compatible and 
they are not necessarily competing against one another?
    Dr. Eggert. Well, within the research consortium that I'm 
involved in, the Critical Materials Institute, we are working 
on processes to recover lithium from geothermal brines in the 
salt and sea area and then process it into a form and a purity 
that allows it to be used in lithium ion batteries. We have had 
some technological success and the work that we are now working 
on with an industry partner is scaling that, proving that, at 
larger than in a test tube or a bench top scale but also at a 
larger scale as well.
    Senator Cortez Masto. Thank you. I appreciate that.
    Thank you, Madam Chair, I appreciate the opportunity to 
have a second round of questions.
    Chairman. Thank you.
    Gentlemen, this has been, I think, very instructive, good 
information. We have had a couple different hearings in the 
Energy Committee over the past several weeks focused on 
infrastructure, and those hearings will continue. Senator 
Stabenow raised the question of infrastructure in view of what 
we are talking about with gaining access to critical minerals 
and our resources. In every infrastructure hearing that we are 
talking about, it comes down to permitting and a level of 
certainty. It is clear to me that we have much work that can be 
done in those spaces.
    I think we heard today that there are opportunities to do a 
little bit better, whether it is designation of a lead agency 
or firm deadlines, but all that we can be doing from the 
perspective of providing some level of certainty to those who 
are looking to take the risk.
    We have not talked about the risk that is inherent in the 
commodities market, that prices go up and prices go down. I can 
recall several decades ago being at the ribbon cutting at a 
Molybdenum--it is so hard to say, that is why we say Moly--at a 
Moly mine outside of Ketchikan. I was there for the ribbon 
cutting, and that was it. That was all she wrote. The price of 
Moly went down, and I do not believe there was ever any 
resource that was extracted from that mining venture.
    That is a risk that is inherent within the industry. I 
think, Senator Cortez Masto, coming from a mining state, that 
there are years when the state's economy is good and strong and 
robust and others when it is not so much. So much of it is 
pricing beyond our control.
    But those things that we can control, it seems to me, we 
should make a better effort to, again, provide for some level 
of certainty and a process that is fair and reliable.
    I appreciate, Mr. MacGillivray, you saying that the 
permitting in these areas needs to be rigorous. We want to 
ensure that we are meeting good, strong, environmental 
standards so that the land that we are charged with taking care 
of is respected.
    But there is a balance here that at some point you say, 
when you have overlaying bureaucracies, when you have 
overlaying or perhaps inconsistent regulation that causes 
confusion, that that adds to costs because you have duplication 
of effort. There is a rationale for streamlining, but 
streamlining does not necessarily mean environmental shortcuts.
    How we lay that all down, how we make it work so that 
industry can operate is what, I think, we need to be doing. We 
do not want to be the country with a bad environmental track 
record. We will not accept that. But we also want to be the 
country that has greater predictability so that investors can 
look at the United States with, perhaps, a little more 
enthusiasm than we might have seen.
    So we have opportunities with the resources. We thank the 
people at USGS for the good work that they do.
    I would certainly encourage us, and I will be looking to 
the budget as the Chairman of the Interior Subcommittee that 
has the oversight of the USGS budget, I would like to see us 
making sure that the efforts to do better by our resources and 
understanding our resources are maintained.
    But those of you that are in the industry, those of you 
that are helping to educate those who become part of the 
industry, know that we appreciate the contributions that you 
bring to the table.
    For those who have joined us from outside the United 
States, again, we welcome your contributions and all that you 
have provided here today.
    With that, we stand adjourned and thank you very much.
    [Whereupon, at 11:50 a.m. the hearing was adjourned.]

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