[Senate Hearing 116-322]
[From the U.S. Government Publishing Office]
S. Hrg. 116-322
THE IMPORTANCE OF AND PATH TO ACHIEVING MINERAL SECURITY, AND
CONSIDERATION OF
S. 1052, THE RARE EARTH ELEMENT ADVANCED COAL TECHNOLOGIES ACT, AND
S. 1317, THE AMERICAN MINERAL SECURITY ACT
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
MAY 14, 2019
__________
Printed for the use of the
Committee on Energy and Natural Resources
Available via the World Wide Web: http://www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
37-305 PDF WASHINGTON : 2021
COMMITTEE ON ENERGY AND NATURAL RESOURCES
LISA MURKOWSKI, Alaska, Chairman
JOHN BARRASSO, Wyoming JOE MANCHIN III, West Virginia
JAMES E. RISCH, Idaho RON WYDEN, Oregon
MIKE LEE, Utah MARIA CANTWELL, Washington
STEVE DAINES, Montana BERNARD SANDERS, Vermont
BILL CASSIDY, Louisiana DEBBIE STABENOW, Michigan
CORY GARDNER, Colorado MARTIN HEINRICH, New Mexico
CINDY HYDE-SMITH, Mississippi MAZIE K. HIRONO, Hawaii
MARTHA McSALLY, Arizona ANGUS S. KING, JR., Maine
LAMAR ALEXANDER, Tennessee CATHERINE CORTEZ MASTO, Nevada
JOHN HOEVEN, North Dakota
Brian Hughes, Staff Director
Kellie Donnelly, Chief Counsel
Lane Dickson, Senior Professional Staff Member
Annie Hoefler, Professional Staff Member
Sarah Venuto, Democratic Staff Director
Sam E. Fowler, Democratic Chief Counsel
Elliot Howard, 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
Manchin III, Hon. Joe, Ranking Member and a U.S. Senator from
West Virginia.................................................. 3
WITNESSES
Balash, Hon. Joseph, Assistant Secretary for Land and Minerals
Management, U.S. Department of the Interior.................... 5
Solan, Dr. David, Deputy Assistant Secretary for Renewable Power,
Office of Energy Efficiency & Renewable Energy, U.S. Department
of Energy...................................................... 11
Evans, Jonathan, President and Chief Operating Officer, Lithium
Americas Corporation........................................... 20
Warner, Dr. John, Chairman, National Alliance for Advanced
Technology Batteries, and Chief Customer Officer, American
Battery Solutions.............................................. 27
Ziemkiewicz, Dr. Paul, Director, Water Research Institute, West
Virginia University............................................ 35
ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED
American Air Liquide Holdings, Inc.:
Letter for the Record........................................ 85
Balash, Hon. Joseph:
Opening Statement............................................ 5
Written Testimony............................................ 7
Responses to Questions for the Record........................ 67
Evans, Jonathan:
Opening Statement............................................ 20
Written Testimony............................................ 23
Responses to Questions for the Record........................ 81
Manchin III, Hon. Joe:
Opening Statement............................................ 3
Murkowski, Hon. Lisa:
Opening Statement............................................ 1
Solan, Dr. David:
Opening Statement............................................ 11
Written Testimony............................................ 13
Responses to Questions for the Record........................ 73
Umicore USA:
Statement for the Record..................................... 89
Warner, Dr. John:
Opening Statement............................................ 27
Written Testimony............................................ 29
Responses to Questions for the Record........................ 82
(The) Wilderness Society:
Statement for the Record..................................... 96
Women's Mining Coalition:
Letter for the Record........................................ 98
Ziemkiewicz, Dr. Paul:
Opening Statement............................................ 35
Written Testimony............................................ 37
Responses to Questions for the Record........................ 84
THE IMPORTANCE OF AND PATH TO ACHIEVING MINERAL SECURITY, AND
CONSIDERATION OF S. 1052, THE RARE EARTH ELEMENT ADVANCED COAL
TECHNOLOGIES ACT, AND S. 1317, THE AMERICAN MINERAL SECURITY ACT
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TUESDAY, MAY 14, 2019
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The Committee met, pursuant to notice, at 10:04 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
The Chairman. Good morning, everyone. The Committee will
come to order.
Thank you for joining us here this morning.
We are here to consider ways to strengthen our nation's
mineral security. In many ways this is a little bit of deja vu
all over again. By my count, this is the seventh hearing that
we have held on this issue since I have been on this Committee.
That is a lot of hearings.
I wish that I could say that we are further along now than
we were when we began. We are going to get it done. Over the
course of several years, we have repeatedly heard from
witnesses who have underscored our vulnerability in relying on
foreign nations for the minerals used to keep our economy
strong and our nation safe.
In 1997, we imported 100 percent of 11 different minerals
and 50 percent or more of another 26. Now, a little over 20
years later, our dependence has almost doubled. So we are going
in the wrong direction. According to the USGS, last year we
imported at least 50 percent of 48 minerals, including 100
percent of 18 of them.
The concentration of that supply, who we buy it from, is
also a problem. Of the 48 minerals that I mentioned, China is a
primary supplier for 26 of them. China is actually mentioned
375 times in the USGS 204-page mineral commodities summary
report--they get the front page there.
Of course, this issue is not limited to the sourcing of raw
minerals. China is also monopolizing other aspects of the
supply chain, including the technology used to process and
refine minerals.
So why is this a problem? Whether we realize it or not,
minerals are the foundation of our modern society. We use them
in just about everything. But our foreign dependence threatens
our national security and is driving jobs and industries,
whether electronics or electric vehicles or something else, to
other countries. Our foreign mineral dependence is our
Achilles' heel for competitiveness, for manufacturing, and for
geopolitics. And in my view, it is way past time that we seek
to address it.
I do appreciate the steps that President Trump has taken,
including his Executive Order to identify a list of critical
minerals and to develop a ``whole of government'' strategy to
reduce our foreign dependence. I look forward to their policy
recommendations, which I understand should be released any day
now.
The Administration's actions are important, but they are
not enough, and Congress needs to complement them with
legislation. That is why Ranking Member Manchin and I have put
forth two legislative proposals: S. 1317, which is my American
Mineral Security Act, and S. 1052, the Ranking Member's Rare
Earth Element Advanced Coal Technologies, or ``REEACT,'' Act.
You get the prize for the better acronym. I just don't deal
with the acronyms, but REEACT--it is good.
Senator Manchin. We hired a person for that.
The Chairman. Yes, you probably did.
[Laughter.]
Maybe I need to borrow them.
The American Mineral Security Act takes a comprehensive
approach to rebuilding our mineral supply chain. It directs
multiple departments to evaluate and update a list of critical
minerals every three years and to conduct geological
assessments to determine where deposits are located. It
authorizes R&D to promote recycling and the development of
alternatives, forecasting so we can better anticipate supply
and demand and workforce development to ensure that we have
qualified professionals operating at the highest standards in
the world. Our legislation also takes modest steps to provide
predictability to the federal permitting process, which of
course we know is notoriously slow and bureaucratic. It can
take seven to ten years to finish permitting here in the United
States. We should all be able to agree that it is very hard to
compete for capital and investment when other nations take a
much shorter period of time, as little as two to three years,
to finish permitting.
While my legislation provides a good framework to begin
understanding and addressing our foreign mineral dependence, I
think that there is more that we can do, and I look forward to
working with my colleagues to ensure a robust domestic
industry, one that continues to be held to the highest
environmental and labor standards in the world, and to building
the workforce and infrastructure needed to bring downstream
processing and manufacturing back to the States.
I hope that this is finally the year that Congress will
work together to advance bipartisan legislation that will help
rebuild our mineral supply chain.
I want to thank you, Senator Manchin, Senator McSally,
Senator Sullivan and Senator Cramer for cosponsoring my
legislation. I would ask other members of the Committee to take
a look at it and consider signing on.
I thank our witnesses for being here this morning. I
appreciate you, Mr. Balash, being here as a great Alaskan,
being able to share your expertise from that perspective, but
also from within the Department. So we thank you for that.
Senator Manchin, your comments this morning as we kick
things off.
STATEMENT OF HON. JOE MANCHIN III,
U.S. SENATOR FROM WEST VIRGINIA
Senator Manchin. Thank you, Madam Chairman, for calling the
hearing to discuss this most important topic which you and I
both feel strongly about because we have two pieces of
legislation which we are trying to move the dime, if you will.
I want to thank all the witnesses who have made an effort
to be here. I am pleased to have from my home state, Dr.
Ziemkiewicz, here to show the good work he is doing as Director
of the West Virginia Water Research Institute at West Virginia
University.
Today we are hearing testimony on two bills that take
different, yet important, steps to help address our concerning
dependence on foreign sources of critical minerals. I believe
this Administration is taking some important steps to identify
minerals considered essential to our economic and national
security, but that are also vulnerable to potential disruption
in the global supply chain. However, there is a great amount of
work that needs to be done.
Not all minerals are created equal. Rare earth elements are
among the critical commodities I would like to draw special
attention to. Right now, we are about 100 percent dependent on
China for these commodities which the Chairman has identified
which are needed for our advanced defense systems and other
pieces of equipment used on the front lines, not to mention
countless consumer products.
As a member of the Senate Armed Services Committee, I
believe that the men and women in our Armed Forces deserve
nothing but the best, and the fact that China maintains a near
monopoly on the critical components needed for our defense
system makes no sense to me at all--and I am sure it doesn't to
you either.
We did not arrive in this vulnerable position overnight. In
fact, it was decades in the making and the result of both a
commitment from China to lead the world in this area and an
unforeseen consequence of classifying thorium as a source of
nuclear fuel by the International Atomic Energy Agency in 1980.
This is obviously a simplification of a complex set of issues
but the fact of the matter is that, since then, China has
continued to invest in the entire rare earth supply chain both
inside and outside of its borders and has successfully created
an artificial market that locks in and maintains access to rare
earth metals, alloys, magnets and other post-oxide materials.
I believe if we are serious about breaking China's grip, we
must not only focus on the importance of rare earth mining, but
also on the entire rare earth supply chain because right now,
China alone has the capacity to refine and convert rare earths
into metals. In other words, we need to recover the resources
as well as establish an industrial base that is capable of
processing and converting these minerals into metals we need
for our defense and our consumer products. That is far
preferable to what we are currently doing which is shipping
them to China for processing. I am glad to report this is
exactly what the team at the West Virginia University and NETL
are doing today.
The commercialization of advanced separation technologies
for rare earth elements from coal and coal by-products is the
first step. Acid mine drainage (AMD) from abandoned mine coal
mines, possess a lingering challenge to Appalachian states like
West Virginia. Existing coal mine operations require water
treatment at the source; however, when this is done it creates
AMD sludge as a by-product.
Dr. Ziemkiewicz and his team have sampled and classified
hundreds of deposits of AMD sludge from all across the region
and have found it contains heavy deposits of rare earths. They
have partnered with the National Energy Technology Lab in
Morgantown to continue working toward commercializing the
technology to separate rare earths from AMD sludge. In other
words, they are working to turn unwanted waste into valuable
resources as well as convert minerals recovered from the
process into metals.
This is a process that is overall relatively benign for the
environment. If successful, Appalachia's coal sludge could
produce up to 800 tons of these elements each year, worth more
than $190 million. This offers a potential win for the
environment, a win for the state and a win for the national
security interests of our nation.
I introduced the Rare Earth Element Advanced Coal
Technologies, or REEACT, to ensure NETL's rare earth program
that has the funds necessary to bring our investment to
fruition. Great progress has been made, including a new pilot
scale facility which opened in Morgantown last year.
I am also an original co-sponsor of the Chairman's bill,
the American Mineral Security Act, which I believe offers a
well-crafted approach toward addressing gaps across the entire
domestic critical mineral supply chain. In particular, the
American Mineral Security Act will help find ways to address
our shortcomings in the critical minerals workforce in which we
are drastically behind other countries. It also requires
resource assessments and authorizes the Department of Energy to
conduct research and development for recycling and alternatives
for critical minerals, a key component to improving
efficiencies of critical minerals and breaking China's
stronghold.
Together, the American Mineral Security Act and the Rare
Earth Element Advanced Coal Technologies Act, when implemented
will help to move the needle in the right direction for our
critical mineral dependence and our national and economic well-
being.
I am pleased we are receiving testimony on these important
bills today, and I look forward to discussing this issue and
hearing from our panel of witnesses.
Thank you for being here, and thank you, Madam Chairman,
for calling this hearing.
The Chairman. Thank you, Senator Manchin.
We will now begin with our panel.
I mentioned that we are joined by the Honorable Joe Balash,
who is the Assistant Secretary for Land and Minerals Management
at the U.S. Department of the Interior (DOI). We appreciate
your leadership over there and being here this morning.
We are also joined by Dr. David Solan, who is the Deputy
Assistant Secretary for Renewable Power at the Office of Energy
Efficiency and Renewable Energy (EERE) over at the Department
of Energy (DOE). Thank you.
Mr. Jonathan Evans is the President and COO for Lithium
Americas. Welcome to the Committee.
Dr. John Warner is the Chairman for the National Alliance
for Advanced Transportation Batteries and the Chief Customer
Officer for American Battery Solutions. Welcome.
And Dr. Ziemkiewicz has been introduced by Senator Manchin.
He is the Director for the West Virginia Water Research
Institute at West Virginia University.
We welcome all of you. We thank you for giving us your time
this morning.
Assistant Secretary Balash, if you would like to lead off.
We would ask that you try to keep your comments to about five
minutes. Your full statements will be included as part of the
record.
I will note that we are scheduled to have two votes that
are supposed to begin at 10:45 this morning, so my hope is that
we will be able to get through everyone's testimony, maybe take
a quick break for those votes and then be back.
With that, Mr. Balash.
STATEMENT OF HON. JOSEPH BALASH, ASSISTANT SECRETARY FOR LAND
AND MINERALS MANAGEMENT, U.S. DEPARTMENT OF THE INTERIOR
Mr. Balash. Good morning, Chairman Murkowski, Ranking
Member Manchin and members of the Committee. I'm Joe Balash,
the Assistant Secretary for Land and Minerals Management for
the Department of the Interior.
Thank you for the opportunity to discuss the Department of
the Interior's development and management of critical minerals
and on S. 1317, the American Mineral Security Act.
The Department appreciates the Chairman and the Ranking
Member's recognition of the great importance of critical
minerals, and we're grateful for the hard work that's been done
to draft this legislation. We look forward to working with you
on the bill as it moves forward.
The United States has an extraordinary abundance of mineral
resources, both onshore and offshore, and is a major mineral
producer. In 2018, the USGS estimated the total value of non-
fuel domestic mineral resources produced to be $82.2 billion.
The United States, however, relies on other countries for more
than 50 percent of dozens of minerals that are vital to our
economy and security. In 2018 the country was 100 percent net
import-reliant for 18 minerals as shown on this chart, one that
I think you're fairly familiar with.
Critical minerals are those that are essential to the
economic prosperity and national security of the United States
and have a supply chain vulnerable to disruption. Of the 18
mineral commodities for which the United States is 100 percent
import-reliant, 14 of them have been identified as critical
minerals by the USGS. These critical minerals are used in an
increasingly broad range of high-tech applications. For
example, antimony, cobalt and natural graphite are important
for advanced batteries and electric vehicles, or germanium and
gallium which are essential in the production of night vision
goggles and other optical instruments that are important for
national security.
To address this vulnerability, in 2017 the President issued
Executive Order 13817, which called on agencies across the
Federal Government to organize a strategy to reduce the
nation's susceptibility to critical mineral supply disruptions.
In 2018, as part of the implementation of the Presidential
Order, the Department developed and published a list of 35
critical minerals.
The critical mineral list is a part of the foundation of
the strategy report which will identify a number of actions
that the Department will take. The Department has already
committed to a number of activities, including having the USGS
and the Bureau of Ocean Energy Management expand geologic
mapping using cutting-edge technology which will be essential
to assess our critical mineral resource potential and
conducting a review of permitting processes on federal public
lands.
Additionally, the Administration has made environmentally
responsible development of all domestic sources of energy and
minerals a priority through issuing Executive Order 13783. The
Department and other federal agencies were called upon to
increase access and reduce the burden on energy and mineral
development of public lands as part of the implementation of
this order. This includes renewable energy development which is
heavily reliant on critical minerals. Also, as part of this
effort, the Department focused on increasing efficiencies and
streamlining environmental reviews which includes setting page
and time limit goals on all National Environmental Policy Act
(NEPA) analysis.
S. 1317 would require the Department to develop and
maintain a list of minerals critical to the economic prosperity
and national security of the United States and to improve the
process of locating, developing and using those critical
minerals. The bill includes several reporting requirements
including one for an annual critical mineral forecast from the
USGS and the Energy Information Agency. The Department supports
these efforts as they align with the ongoing efforts by the
Administration to promote mineral development. The Department
also supports the reauthorization of the National Geologic and
Geophysical Data Preservation Program at USGS. The Department
looks forward to continuing to work with the sponsors on this
important legislation.
Thank you again for this opportunity to present this
testimony. The Department is committed to promoting
domestically sourced critical minerals. Doing so will create
and sustain jobs, promote U.S. technological innovation and
reduce our nation's vulnerability to disruptions in the
critical mineral supply chain.
I'd be happy to answer questions at the appropriate time.
[The prepared statement of Mr. Balash follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Assistant Secretary. We appreciate
that.
Dr. Solan, welcome.
STATEMENT OF DR. DAVID SOLAN, DEPUTY ASSISTANT SECRETARY FOR
RENEWABLE POWER, OFFICE OF ENERGY
EFFICIENCY & RENEWABLE ENERGY, U.S. DEPARTMENT OF ENERGY
Dr. Solan. Chairman Murkowski, Ranking Member Manchin and
members of the Committee, thank you for the opportunity to
testify today on behalf of the Department of Energy, and thank
you for your continuing leadership and interest in critical
minerals and materials.
The Department shares the goals of S. 1317, Chairman
Murkowski's American Mineral Security Act, and S. 1052, Ranking
Member Manchin's REEACT Act. DOE also appreciates the bill's
recognition of program and laboratory capabilities in
developing replacements for critical materials as well as
improvements in the recycling, processing, extraction and
recovery.
Critical minerals are used in many products important to
the U.S. economy and national security, and they are
particularly important to the most innovative clean energy
technologies. For example, some of the minerals DOE considers
the most critical in terms of supply risk include gallium for
LEDs, the rare earths dysprosium and neodymium for permanent
magnets and wind turbines and electric vehicles and cobalt and
lithium for electric vehicle and grid batteries.
The U.S. is dependent on foreign sources of many critical
minerals, and we also currently lack the domestic capability
for downstream processing of materials as well as the
manufacture of some products made from them.
Today I would like to highlight how DOE is working to
address these vulnerabilities through our R&D and how we work
closely together with our federal partners through interagency
coordination. DOE has a three-pillared approach to our R&D
investments for critical materials coordinated among our
programs agency-wide. The three pillars are: (1) diversifying
their supply--including domestic production, (2) developing
substitutes, and (3) alternatives and recycling of use and more
efficient use of them. And I would note that these pillars
align very well with the bills that are being discussed today.
Possibly the most well-known of DOE's work is that of the
Critical Materials Institute which appeared before this
Committee last July. The Critical Materials Institute (CMI) is
a multi-disciplinary consortium of national laboratories,
universities and companies led by the Office of Sciences, Ames
Laboratory, and managed by Energy Efficiency and Renewable
Energy's Advanced Manufacturing Office.
Some technologies developed and licensed through CMI that
exemplify DOE's three-pillared approach include a membrane
solvent extraction for rare earth separations which is relevant
to both primary production and recycling, the 3D printing of
rare earth magnets to reduce waste, and the development of a
cerium-aluminum alloy for creating lightweight components for
vehicles and airplanes.
Much of the Department's advancements in any applied area
such as critical materials are underpinned by our Office of
Science which focuses on fundamental research to advance
understanding of materials at the atomic scale. Its research
employs novel synthesis techniques and computation
identification of compounds for critical materials substitutes.
This includes replacements for rare earths and magnets, lithium
and cobalt in batteries and platinum in catalytic reactions.
In a similar vein to reduce dependence of batteries on
critical materials, the Vehicle Technologies Office (VTO) at
EERE is funding R&D to reduce the cobalt content in the battery
cathode to less than five percent by weight. VTO has also
established the ReCell Lithium Battery Recycling R&D Center at
Argonne National Laboratory for current and future battery
chemistries. And in January 2019, VTO and the Advanced
Manufacturing Office announced the launch of the Lithium-Ion
Battery Recycling Prize to incent American entrepreneurs to
create cost-effective solutions to get to 90 percent of
lithium-ion batteries to be recycled.
The Office of Electricity at DOE is funding efforts to
develop non-lithium grid energy storage based on earth-abundant
materials such as sodium and zinc with a goal of $100 per
kilowatt-hour.
Additionally, the Department is pursuing unconventional
resources to recover or harvest critical materials. Through the
National Energy Technology Laboratory, the Office of Fossil
Energy is focused on recovering rare earth elements from coal
and coal-based resources, a subject of Ranking Member Manchin's
bill. These efforts grew to 30 projects in the past year.
EERE is also working on unconventional resources through
small business innovation research grants continuing to invest
in the recovery of lithium in geothermal brines, and it is also
investing in technologies to use marine and hydro-kinetic power
to possibly extract critical materials from seawater.
ARPA-E and a number of offices within EERE, including the
Wind Technologies Office, have had significant complementary
efforts to develop alternative motor and generator technologies
that do not require rare earth permanent magnets.
And finally, the Department closely coordinates with other
federal agencies such as the Departments of Defense, Commerce
and Interior through the National Science and Technology
Council Subcommittee on Critical Minerals. As a co-chair since
2013, DOE continues to provide leadership and we have worked
closely with the Department of Commerce as it leads to the
final preparation of a report in response to the President's
December 2017 Executive Order 13817 which will help define a
national strategy to address critical minerals.
Thank you again for the opportunity to appear here today.
DOE looks forward to working with the Committee and Congress to
ensure appropriate stewardship and results from taxpayer
investments, and I look forward to your questions.
Thank you.
[The prepared statement of Dr. Solan follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Dr. Solan.
Mr. Evans, welcome.
STATEMENT OF JONATHAN EVANS, PRESIDENT AND CHIEF OPERATING
OFFICER, LITHIUM AMERICAS CORPORATION
Mr. Evans. Madam Chairman, Senator Manchin, members of the
Committee, my name is Jonathan Evans and I'm the President for
Lithium Americas Corporation.
I greatly appreciate your focus on critical minerals and,
in particular, lithium. We all depend on lithium-ion batteries
in our daily lives. The United States is reliant on a supply
chain that extends from Australia and South America to China,
Japan and Korea.
Lithium Nevada's Corporation is a wholly-owned subsidiary
of Lithium Americas. It is headquartered in Reno, Nevada, and
is developing a project called Thacker Pass, which is the
largest known lithium resource in the United States. Thacker
Pass will profoundly improve the supply of lithium chemicals by
producing 25 percent of today's global lithium demand when in
full production.
Currently, the U.S. produces just one percent of lithium
minerals and seven percent of lithium chemicals. The project is
on track to begin construction in the first quarter of 2021 but
we will not stay on schedule without the swift and dependable
permitting as emphasized in S. 1317.
Lithium Nevada faces additional challenges securing a
trained workforce and providing levels of financial certainty
to our investors and business partners. We greatly appreciate
your efforts to address these issues.
Thacker Pass is located in northern Nevada on public land
managed by the Bureau of Land Management. Lithium Nevada and
the BLM are working cooperatively to evaluate the project. We
submitted a conceptual plan of operations to the BLM in late
2018 and will submit a detailed plan of operations this summer.
We anticipate the BLM will publish a notice of intent to
conduct the EIS in December and complete the study by December
2020 in accordance with Executive Order 13817.
In our experience NEPA processes could be slowed by
administrative tasks at the state, regional and head offices
that are removed from the actual environmental assessment
process. We welcome the spirit of Executive Order 13817 and the
other administrative reforms that recognize the value in
concentrating the NEPA process on substantive environmental
review and encourage state and federal permitting agencies to
be diligent in their review of critical minerals projects.
Adhering to schedules like the one prescribed for Thacker
Pass boosts confidence among employees, community partners and
financial supporters. Conversely, jurisdictions that fail to
consider permanent applications and predictable timeframes
experience minimal private investment and essential workforces
leave for other, more dependable projects.
This Committee, the Administration and Department of the
Interior should be commended for working to provide
predictability in permitting. It is essential for the United
States to have an uncompromising, thorough permitting process
and to do it swiftly.
Lithium Nevada insists on being part of a project that goes
beyond simply getting through the approval process. Consistent
with that vision, it is our duty to ensure these essential
chemicals are made responsibly without compromising the
benefits they ultimately bring to the environment. To that end,
Thacker Pass's mining and processing facilities are being
designed to be as efficient and environmentally sensitive as
possible. Two examples are that we'll utilize very little
water, 2,000 acre-feet per year, which is only slightly more
than one day of current annual water usage in Humboldt County,
and our operation will be nearly carbon-free. Heat from our
plant will be captured to generate as much as 60 megawatts of
clean energy, which is more than enough to power the Thacker
Pass operation, and provide surplus power to the grid.
Lithium Nevada will struggle to employ the trained
workforce we need of 300 permanent employees. Although these
jobs will earn an appealing $86,000 a year compared to the
state average of $55,000 a year, it will be difficult to fill
the positions. The problem is due to the remote location of our
project, a historic under-investment in domestic critical
mineral processing which has limited the pool of technical
professionals and skilled operators in this field.
As for capital, Thacker Pass is well-funded by private
interests, but we will need to solidify the confidence of
potential business partners and investors because lithium
processing is a relatively emerging business here. We believe a
dependable source of federal loan guarantees would confirm the
government's commitment to the development of a critical
mineral supply chain and would help to solidify investment
interest. Federal loan guarantees would also lower the
project's cost of capital, helping U.S. projects be competitive
with government-supported investments by China, Japan and
Korea.
Demand for lithium is soaring. All the major car
manufacturers have been out billions of dollars of investment
in electric vehicle manufacturing. Their current demand is
anticipated to grow 500 percent by 2025. The supply chain is
physically long and highly vulnerable to transportation risk,
political disruptions and foreign economic policy. By and
large, lithium minerals are currently mined in Australia, Chile
and Argentina. Lithium concentrates and chemicals are then
shipped mostly to China, Japan and Korea and formulated into
cathodes utilized by battery manufacturers, such as Panasonic,
who supply Tesla.
This global supply movement is inefficient and expensive.
Cathode and anode materials for lithium-based battery cells are
produced almost entirely in China, Japan and Korea. It will
take a sustained public policy commitment to promote the
development of the technology, expertise and capital needed to
make the U.S. competitive in this area.
The Thacker Pass project presents a critical catalyst that
will ignite extensive downstream business development. Lithium
Nevada greatly appreciates the attention this Committee is
giving to securing critical mineral production in the United
States.
We support S. 1317. If enacted, it will bring invaluable
assurances that the permitting process will be thorough and
completed in a reasonable timeframe. It strives to invest in
our next generation of engineers and operators, and it creates
mechanisms to inject essential capital into our critical
minerals supply chains. Without this assistance in the battery
industry, the U.S. will remain decades behind China, Korea and
Japan while we continue depending on the stability of offshore
supply chains to furnish the U.S. with essential battery
components.
Thank you for attention to these important issues. I'm
happy to answer questions you may have.
[The prepared statement of Mr. Evans follows:]
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The Chairman. Thank you, Mr. Evans.
Dr. Warner, welcome to the Committee.
STATEMENT OF DR. JOHN WARNER, CHAIRMAN, NATIONAL ALLIANCE FOR
ADVANCED TECHNOLOGY BATTERIES, AND CHIEF CUSTOMER OFFICER,
AMERICAN BATTERY SOLUTIONS
Dr. Warner. Good morning, Madam Chair, Senator Manchin and
Committee members. Thank you for inviting me to speak this
morning on this very important topic of minerals and chemical
processing, especially as it relates to the growing
technologies of lithium-ion batteries.
I've been in the U.S. advanced battery industry for over 10
years and spent nearly 20 years in the automotive industry. I
currently serve in several different roles in the battery
industry. First, as a Chief Customer Officer for a lithium-ion
battery pack startup company based in Michigan called American
Battery Solutions. Second, I serve as the current Chairman of
the industry trade group, NAATBatt International, the National
Alliance for Advanced Technology Batteries. I also serve on
several different SAE, Society of Automotive Engineers,
standards committees to help bring standardization to these
technologies. I'm also the author of two books on lithium-ion
batteries and, most importantly, I am a user and advocate of
these batteries as a proud driver of a Chevrolet Volt with
115,000 miles.
Throughout history there have been several technologies
that have helped to shape the direction of mankind, beginning
with the taming of fire, to the invention of the wheel, and
later the telegraph, the steam engine, the long-range
electrical transmission, personal computers, the internet,
space travel, cellular technologies and, for my purposes here,
electrochemical energy storage, the modern battery.
The modern advanced lithium-ion battery is perhaps the most
important technology of the 21st century due to its role
enabling other technologies, and the U.S. is largely
responsible for the invention of the lithium-ion battery based
on work done by innovators such as Dr. John Goodenough and Dr.
Stan Whittingham. Yet the manufacturing of these batteries and
increasing of the expertise in the lithium-ion batteries, it is
now becoming centered in Asia. China is making massive
investments in lithium-ion batteries that's estimated to be
more than $60 billion. And today, as a result, they account for
60 to 75 percent of all lithium-ion battery manufacturing in
the world today.
In order to support these manufacturing efforts, China is
aggressively acquiring sources of energy materials around the
world and domesticating the processing of those materials into
the complex battery cathodes and anodes.
Based on some of the recent U.S. Geological Survey minerals
yearbook, both the largest mineral reserves and the largest
mineral processing for lithium-ion battery materials is being
done in China, Australia, Brazil and Chile with more than 67
percent of the world's supply of cobalt, a key chemical in
batteries using lithium-cobalt oxide, nickel-manganese-cobalt
and nickel cobalt aluminum chemistries being mined in the
Democratic Republic of the Congo (DRC) with more than 70
percent of that being processed in China.
Lithium presents a somewhat better story since it's more
widely geographically distributed throughout the world.
However, more than 98 percent of it's mined and processed in
Chile, China, Argentina and Australia, and the vast majority of
the chemicals being used in lithium-ion batteries, regardless
of where they are mined, are being processed in China today due
to the low environmental standards and the strong governmental
support. This points out the complexity of the battery supply
chain.
For a U.S. company to build lithium-ion cells would require
lithium mined in Chile or Australia, cobalt coming from the
DRC, graphite coming from Australia, Brazil, Canada or China,
manganese coming from South Africa, copper from Chile, nickel
from Australia or Brazil or Russia. These materials would then
need to be shipped to other countries such as China or Korea or
Japan, where they're processed into battery-grade materials and
then shipped to the U.S. The cell makers would then need metal
foils to coat the materials onto which typically come from
Korea and Japan, polyethylene separators from China, Korea and
Japan. So we have this largely Asian-centric supply chain which
promotes and supports the development of the Asian
manufacturers while putting the U.S.-based manufacturers at a
disadvantage.
The reason why the supply chain problem should be a public
policy concern is because the global competition for advanced
battery manufacturing capacity and expertise, the ability to
guaranty reasonably stable and ideally low energy material
prices to manufacturers is a considerable advantage. Chinese
companies are buying up energy material supply sources around
the globe in order to ensure that battery manufacturers based
in China have access to reasonably stable supplies of low-cost
materials.
The loss of U.S. leadership in lithium-ion technology may
well lead to the loss of U.S. leadership in other important
technologies. The ability to supply electricity to a device
without a power cord will be fundamental to most of the major
new technologies of the 21st century. If you lose expertise in
the battery technology, you risk falling behind those other
technologies as well.
Finally, let me leave you with a thought from one of the
earliest and greatest American battery innovators, Mr. Thomas
Edison, whose first battery patents were issued in the late
1890s. Edison said, ``I don't think nature would be so unkind
to withhold the secret of a good storage battery if a real
earnest hunt is made for it, and I'm going to hunt.'' This is a
belief that most of us in the battery industry still have to
this day, believing in the spirit of this hunt that drives
American innovation, drives leading the creation of new
markets, generating new high-tech jobs, developing new supply
chains and enabling the technology of the 21st century and
beyond while boosting the U.S. economy and securing our future.
NAATBatt continues to work with our members to help develop
domestic sources for both the supply chain, the materials and
the battery materials and the battery packs, and we look
forward to supporting you in this bill.
Thank you.
[The prepared statement of Dr. Warner follows:]
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The Chairman. Thank you, Dr. Warner.
Dr. Ziemkiewicz.
STATEMENT OF DR. PAUL ZIEMKIEWICZ, DIRECTOR, WATER RESEARCH
INSTITUTE, WEST VIRGINIA UNIVERSITY
Dr. Ziemkiewicz. Thank you, Chairwoman Murkowski, Ranking
Member Manchin and members of the Committee for giving me this
opportunity to discuss and offer testimony on the role that
rare earth elements can be derived from coal and coal-related
products and support the federal effort to develop a domestic
supply chain.
I'm the Director of the West Virginia University Water
Research Institute. Every state and territory has one. We tend
to focus on areas that are strongly focused on our main
pollutant in the state which is acid mine drainage (AMD) from,
largely, mines that were developed before the invention of the
Clean Water Act. So they're pre-law mines, before SMCRA, any of
this went into effect, these mines were abandoned and,
therefore, just generate acid mine drainage, mucks up thousands
of miles of streams in the northern Appalachians. So that's
been our main effort, but this is almost a case study in how
federal policy can lead in innovation in areas that would never
have been considered otherwise.
So, for example, I'm one of the world's experts on the
subject of acid mine drainage. If there's acid mine drainage
anywhere in the world, I've probably been there. But it never
would have occurred to me, I've been at this for 30 years at
WVU, but it never would have occurred to me to look for acid
mine drainage as a source of rare earth elements or critical
minerals until the Department of Energy's NETL laboratory,
through legislative action here, created a funded program to
study exactly that issue.
So we started working on it and also give a lot of credit
here to USGS' work, maybe 15 years earlier, back in the late
'90s, supported by Congressman Jack Murtha, to look for
platinum group metals in acid mine drainage of all things. Not
much was found but a great database was generated.
A friend of mine at USGS, Chuck Cravotta, let me have his
dataset from years gone by, and I looked at it when this
opportunity came up from NETL and it turns out there are rare
earth elements in acid mine drainage. No one had ever looked
for them before.
So we decided to submit a proposal based on that alone, on
the acid mine drainage side of it and we found that it has a
couple of real strong advantages. One, it's, in a sense, it's a
natural heap leach operation. If you think of a lot of modern
metal mines are acid heap leaches, a lot of the metal mines
operate as an acid leach through rock that contains precious
minerals. Well, in this case, acid mine drainage is exactly
that, it generates spontaneously all this acid so you get this
free acid and it leaches, selectively leaches, these metals
that we want out of this rock mass, the shales that surround
the coal in the coal-related products. So any tailings,
underground mines, surface mines, as long as they're acid, they
generate acid mine drainage.
When we first got this opportunity, I called up some of my
friends in the coal industry and asked if we could come out and
sample some of their acid mine drainage and their treatment
sludges. They said sure, you can have all you want, because to
them it's one of their biggest costs in treating acid mine
drainage is getting rid of this stuff afterwards. So we went
out and looked at it, and we were finding concentrations that
were as high as some of the best deposits in the world.
And the other nice thing about it, not only is the
concentration high, but the accessibility is high from a
chemical point of view. You can just--this stuff starts out in
solution and if you think of most of the mineral processing
trains, you start by mining a cubic meter of rock, grind the
daylights out of it, down to talcum powder, separate the good
stuff from the bad stuff and then start leaching it with really
strong acids and bases and it's a very complicated process
until you get to the point where you actually have your desired
minerals in solution, then you can start separating it on to
all sorts of wonderful chemistry. Well, what we found out is
that not only was the stuff already in solution but the
treatment process itself just added hydroxide to the process,
adding base knocks them out of solution. We can put it back in
solution just by raising the acidity level. And so that goes
off to solvent extraction and we've been able to get
concentrates up into the 80 percent, 60 percent range of pure
rare earth element out of some of our coal-derived, acid mine
drainage products. So this is world class product now. This is
also work supported through NETL.
The other nice thing about acid mine drainage as a source
of rare earth elements is that the pH of acid mine drainage,
believe me, I know, never gets much below about two and a half.
In order to get thorium and uranium to go into solution, you
have to be down below one, and most of the hard rock processing
trains for that extraction of rare earths also puts the uranium
and thorium into solution which is why most rare earth mines
tend to produce a fair amount of uranium and thorium in their
tailings. We don't have any of that. We looked at uranium and
thorium in all of our samples, and it just isn't there.
I'd like to thank you for your leadership on the REEACT
bill and previous authorizations. It's done great work, and I
think we have a long ways to go here.
[The prepared statement of Dr. Ziemkiewicz follows:]
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The Chairman. Thank you, very interesting. It is always
interesting to hear about some of the technologies out there.
We focused in our legislation, I think very keenly, through
USGS, through Department of Energy, on the issue of accessing
these critical minerals, recognizing that we have a
vulnerability. But I think it is equally important to talk
about the ways that we can, through different technologies--
whether it is recycling or looking for those alternatives,
recognize that we may have more than even we think we do.
I want to go back to you, Secretary Balash, with regards to
the mapping initiative. I have always felt that we are not
doing ourselves any favors when we don't know what it is that
we have within our inventory of our public lands and certainly
within our resources.
You mentioned the mapping. I understand that the President,
well, we know that he has requested funding to topographically,
geographically and geophysically map the country. This is the
Earth MRI. We included some funding last appropriation cycle to
support this. Where are we within USGS' effort to implement the
program? What is the status of this?
Mr. Balash. Thank you, Senator, and thank you, Madam Chair.
The Earth MRI program, as you noted, is contained. There's
a budget request in the FY20 request from the Department. The
Service has been working through and with multiple state
surveys as well to identify those opportunities for
partnerships and, then again, with third parties.
The Chairman. Let me ask you, have most states conducted
their own inventories or their own mapping so that we can
compile this into one resource or are we still shy of real
information?
Mr. Balash. I think that the situation varies from state to
state in the maturity of their information and also the amount
of physical area that they have to assess.
Our home state, for example, there is a great deal of work
left to do to complete the mapping there. But in some places,
you have a better understanding and are able to put that
information together more rapidly than in others. But the
figures are a spectrum.
The Chairman. So we are still a ways behind in really
understanding what our true inventory is as a nation when it
comes to our critical minerals and our rare earths?
Mr. Balash. That's absolutely correct, particularly when
you consider the advances in remote sensing that are available
today as compared to even 30 years ago. So in terms of having a
modern and comprehensive assessment, I think as a nation we
have quite a ways to go.
The Chairman. With regard to the Mineral Security Act that
we have introduced, you have all had an opportunity to review
it, and you have all said some relatively kind things about it.
Does it do enough?
One of the things that I am very aware of is that
oftentimes by the time we get around to passing legislation, it
is already a little bit stale. Are we forward thinking enough
with the legislation that we have laid down here?
I will throw that out to all of you.
Dr. Warner.
Dr. Warner. Yes, I would like to recommend, I think that
some of the lithium-ion battery materials are definitely an
area of concern.
As we look at things like cobalt and lithium, the supply of
those is in very high demand. And with the growth of lithium-
ion chemistry, I think continuing to add to those materials,
the lithium, nickel, manganese and cobalts, expanding to make
sure that those are included and covered--those could be very
strategic resources. And they're going to be key to the current
generation of technologies as well as the next generation of
technologies for energy storage moving forward. As we think of
beyond lithium, some of these other materials are going to get
us into some of the lanthanums and some of the other
lanthanides that are going to move forward.
The Chairman. Okay. Anything else?
Dr. Ziemkiewicz and then Mr. Evans.
Mr. Evans. Yes, thanks, Senator Murkowski.
Dr. Ziemkiewicz. One of the things that we've noticed is
that as soon as we mention to a landowner that the acid mine
drainage sludge on their property may have value, it goes from
being how fast can DEP get it off my site to this is my stuff
and no one is going to touch it.
[Laughter.]
So the whole issue of ownership and control is really
important to nail down in some sort of federal guidance,
because right now it's a free for all and it will be handled on
a--it would be like coalbed methane, if you're familiar with
that controversy. It will drag on forever. Resolution on that
count, I think, would be very useful to include in a bill.
The Chairman. Very good. Thank you.
Mr. Evans.
Mr. Evans. I think the permitting is going to help out a
lot. I think the tracking and the KPIs that you'd mentioned in
the details of the bill are going to be important.
We've seen when you get to the federal level at the BLM,
resourcing is a challenge to get to permitting through on
timelines. They're going to be competitive to develop projects.
I think the workforce development is excellent. If you look
at our university in technical college programs, it's not
focused around a lot of these technologies and I think it's
really important, even with some of the technology you've
talked about in rare earth.
The one thing I did mention around credit facilities and
loan guarantees is something it would be a next step that I
think would be important to consider as our competitors
offshore, governments help push development through their
agencies and even with helping their own companies and it's not
something that we have done in this country in a long time, but
we need a strategy around that because we're a decade or two
behind foreign governments in that strategy.
The Chairman. Okay, I appreciate that.
Let me turn to Senator Manchin.
Senator Manchin. Very quickly, because I know we are all
going to have to run and go, votes and everything.
But how we got ourselves into this position to where we are
depending on more and more of this product coming offshore--I
mean, we do nothing here. This couldn't have just happened by
chance. I mean, you had to know and your companies had to know
that, basically, the development, whether it is in
manufacturing of cell phones, medical equipment, batteries,
whatever we use every day, was going to grow. Twenty, 30 years
ago, we knew that.
And as that was growing in demand and demand was growing,
it had to be that we were chasing it, the capitalist society
were chasing the price. And China was able to go out and gather
up all the resources they could to own this base resource for
it to come into their country, to have total control.
The only way we are going to change this right now, because
I don't think we will ever be price competitive with China,
knowing that they got this much of a jump. The only way the
American people will continue and for us the support with the
legislation we have is the security of our nation. It is truly
the security of the nation.
You all can benefit from that if we have a product but you
are not going to buy our product if it is cheaper somewhere
else. It is not the way the game is played.
So I am trying to figure out how we thread this.
Dr. Paul, you might want to talk about this but we are now
being able to turn a liability into an asset and you know it
can be done.
What is the price point? You have had to look at the price
points of what China is charging for these. Where do you think
the break even is and can you ever get to where we can be
competitive or do we have to go down the role of truly being,
having this stockpile of this rare earth minerals for the
security and defense of our nation?
Mr. Ziemkiewicz. It's a very good point. I think that some
price support, if not market support, is needed in the early
stages because the first thing the Chinese will do, and they've
done it before, is drop the price on the world market.
Senator Manchin. Sure, we know that.
Mr. Ziemkiewicz. Because of its monopoly and that will
drive anyone out of business. Mountain Pass, which is our only
active mine right now in the United States, sends all of its
oxide product to China for refining.
Senator Manchin. Is that because of environmental laws in
America where we make it very difficult for us to do that
process?
Dr. Ziemkiewicz. I just, I think, and I'm not an economist,
but I think it's just because they have the supply chain. They
can fit it right now. There's really no market.
Senator Manchin. Tell me the price point. Tell me the price
point when you think that Dr. Warner there is going to buy the
product, the raw ingredients from America and not overseas,
because it is cheaper.
Dr. Ziemkiewicz. Well, we have a concept called a contained
value for a mineral and ours, because we have a very high ratio
of heavy rare earths and critical minerals, including cobalt,
by the way, which is what, 75 percent of our total rare earth
supply in acid mine drainage sludge. If we move all that
together, the cost, the contained value is about, on average,
$237 per kilogram. So that becomes a market factor. Now how
that plays out in terms of full-scale production is something
we need to do in the next research steps with NETL.
Senator Manchin. And what time period are we talking about?
Dr. Ziemkiewicz. We're working on a proposal right now
actually.
Senator Manchin. Because I think our bill here, the REEACT
bill, gives you, is it $23 million a year?
Dr. Ziemkiewicz. Yeah.
Senator Manchin. For a period of time here until we can get
this thing up and running.
The only thing I have found, unless there is a private
sector partnering up with the public sector which is going to
be the universities or NETL, the timeframe seems to grow longer
and longer and we are trying to shorten this because we need it
desperately, as quickly as we can, to put ourselves in a
position.
Dr. Ziemkiewicz. Well, one of the nice things about acid
mine drainage is that it doesn't require any permitting. So
it's not like putting in a green field mine in the wilderness
somewhere. You've got infrastructure. You've got a workforce.
You've got, already, SMCRA permits and clean water right
permits.
Senator Manchin. Sure.
And you said we could produce about 800--how many?--
800,000?
Dr. Ziemkiewicz. Eight hundred tons of rare earths per year
just in the sites that we've looked at in central Appalachia.
Senator Manchin. What type of consumption do we use, do we
have?
Dr. Ziemkiewicz. The Department of Defense uses about 800
tons per year. The total economy is about 16,000 tons.
Senator Manchin. Sixteen thousand. So it would be a drop in
the bucket to the total economy, but it would be a help.
Anybody have any comments on that real quick before we run
out of time?
Dr. Warner. I would add that from the battery manufacture
standpoint, and I've had the privilege of working with several
companies, we found some interesting things as U.S. cell
manufacturers is that simply getting access to some of these,
even offshore, materials is difficult when you're not producing
in the same volumes as a LG or a Samsung, getting the materials
manufacturers to be able to dedicate quantity to you or
material to you becomes very challenging. So they're pricing it
higher. So you challenge and you struggle to get those
competitive pricing.
In the final product, you know, we see batteries coming
down to $125 or $150 per kilowatt-hour in the relatively near
future. And with new technologies coming in the next and beyond
lithium applications, we see potentially hitting below $100 a
kilowatt-hour. But that's probably ten years out.
Today, I think, we're targeting in this $125 to $150 at the
complete pack level. So that's where from battery manufacturers
we need to be able to afford that and then find those solutions
which get us some materials that can allow us to reach those
numbers.
Senator Manchin. Thank you, Madam Chair.
The Chairman. Thank you, Senator Manchin.
Senator McSally and then after her, Senator Cortez Masto
will go. I am going to pop out and vote, and we will just keep
moving here.
Senator McSally.
Senator McSally. Thanks, Chairman Murkowski, Ranking Member
Manchin. I appreciate you holding this hearing.
I was proud to join you as an original co-sponsor in the
American Mineral Security Act of 2019. Critical minerals are
not only essential for manufacturing modern technology all of
our lives depend on, but mineral production is critical in
Arizona's economy. The mining industry in Arizona generates
$4.29 billion of economic impact, supports 44,000 jobs across
the state and delivers $482 million in state and local taxes,
in addition to much more in federal taxes.
While not listed as a critical mineral, copper is indeed
essential. In Arizona, we have a lot of copper, one of the five
Cs. We produce 65 percent of the nation's copper output, more
than any other state.
Mr. Balash and Mr. Solan, we know copper is an essential
component to electricity production and renewable energy
technology. What is the demand for copper going to look like as
the forecast for solar energy, electric vehicles and charging
infrastructure continues to grow?
And it is important to note, many of the critical minerals
needed for advanced battery technology, like nickel and cobalt,
are byproducts of copper production. So I am interested to hear
your perspectives, Mr. Balash, on copper byproducts and the
Department of the Interior, what they are doing for byproduct
research and development.
Mr. Balash. Thank you, Senator.
The compilation of our critical minerals list last year
received a fair bit of scrutiny on the question of where to put
copper on that list for precisely the reasons you've
identified. Its growing demand that we see coming down the pike
as well as depleted reserves that are being produced as we
speak is adding up to something that we can see out in the
future as being a bit of a challenge. And that's reflected in
some of the commodity pricing that we've seen over the last
year.
I would say that the byproducts associated with copper
production, many of those are already on that, the list, and
something that bears monitoring. The ability to identify what
those byproducts are going to be in these larger assessments
that we've done are difficult to identify in some of the older
research and assessments that have been done for resources
around the country. I think a modern assessment will help
identify some of those additional products that are present in
the ore body.
Senator McSally. Great.
Dr. Solan, do you want to add anything?
Dr. Solan. Sure.
We would definitely agree that copper is essential to our
society. We depend on it for electrical infrastructure and one
of the things that we're looking at, at the Department of
Energy, is the relationship between the supply and demand and
how quickly we may or may not electrify our society.
You did mention, too, in regard to clean energy
technologies and electric vehicles, electric vehicles also
depend on copper. I mean, we tend to talk just about battery
chemistries themselves, but that's important. And we also
forget too that copper is essential to internal combustion
engine vehicles as well. So this is something that we think is
important and is likely to grow in the future.
Senator McSally. Great.
I want to follow up a little bit about this.
I am truly an all-of-the-above energy strategy kind of
person. Some of the loudest advocates for renewable energy
production, however, are some of the biggest opponents of
mining. Those are contradictory in my view. It may work
politically for them but not scientifically. Any serious
conversation about lowering our emissions needs to include
robust support for America's mineral production.
Dr. Solan, can you comment again on whether our ambitious
renewable energy goals can happen without increased production
of critical minerals?
Dr. Solan. I would say that critical minerals are
definitely important in achieving the goals that we have and
also pushing the technologies forward and providing producers
and manufacturers with the widest range of technologies
available.
I mentioned before that our three pillars also look at, not
only diversifying our supply and production, but also taking a
look at alternatives and substitutes. And we've put in quite a
bit of work on that, but there's only so far that you can go in
terms of certain technologies, mechanical versus say, direct
drive, if the minerals aren't there. So this is something that
we think is really important moving forward.
Senator McSally. Great, thank you. I will yield back so we
can vote.
Senator Manchin [presiding]. Senator Cortez Masto.
Senator Cortez Masto. Thank you. Thank you, everyone, for
being here. Mr. Evans, good to see you again.
Mr. Evans. Thank you, Senator.
Senator Cortez Masto. I have a few questions for you.
I know many of the critical minerals for the battery supply
chain are included in the list of strategic minerals. How long,
typically, does it take to develop a resource and get it to
market?
Mr. Evans. For a mine, a lithium mine?
Senator Cortez Masto. Correct.
Mr. Evans. Cobalt, seven to ten years.
Senator Cortez Masto. Seven to ten years. And are enough
critical resource projects at the right stage of active
development domestically, or even internationally, to meet the
projected needs for the future and what do we need to do to
meet those expectations?
Mr. Evans. No, not even close.
Senator Cortez Masto. No, yes.
Mr. Evans. There's not enough in development. Certainly, if
you look at where demand, whether it's for electrification,
going out seven or eight years from now, we need to be doing a
lot more.
I think the legislation that's been introduced here is
very, very helpful and I think the other difficult thing that,
and we've talked about it and Senator Manchin as well mentioned
it, was that it's attracting capital to get these projects
developing.
The United States has cobalt and lithium and manganese and
copper. We need to push for the development and get private
funds involved. And it might require some government support to
help catalyze that, get it started, but that's been one of the
biggest barriers. I think the permitting reform here is great
but it's getting people off the sideline and getting public
funds to move.
Senator Cortez Masto. Do you think passing this legislation
and also promoting or investing in a federal loan guarantee
program would help bring in investors and the private sector?
Mr. Evans. I would. I do, very much so.
Senator Cortez Masto. Okay.
Mr. Evans. Yes.
Senator Cortez Masto. Let me ask you this. What areas in
the battery supply chain are we missing besides the development
of critical raw materials?
Mr. Evans. It's the donut to me which is the cathodic
materials for the electrodes. A lot of that technology is done
all in Asia now, Dr. Warner talked about that, and a lot of
research and development is done there. So if we had the
minerals here, the next step is to actually make the electrodes
here as well.
Graphite can come from Alaska. The other minerals from the
U.S., but that R&D we can focus here. The separator which came
from the U.S., now is made primarily in Asia is another key
component and then the electrolyte. With those three we can
then manufacture cells, and we'd have the complete supply
chain.
Nevada is a great example. We've got Tesla. We're
assembling batteries but all those other pieces we need as well
besides the minerals which is just beginning.
Senator Cortez Masto. Then one final thing that you talked
about was workforce development as a challenge. What are you
doing to address that right now and what can we do at a federal
level to support that?
Mr. Evans. We have training with Great Basin College that
we initiated. I think the elements of this bill and the funding
around college and university development around curriculums is
critical. There's some great programs in metallurgy at
University of Nevada at Reno which I think we can expand,
especially around mineral beneficiation.
Those things are really, really important and I think we
need to continue to focus on them because even with these
projects we don't have the workforce.
Senator Cortez Masto. I appreciate that.
Let me open that up to the panel. What else can we do at a
federal level or, in general, to address the workforce issue
because we can pass this legislation and identify critical
minerals that we need, but at the end of the day if we don't
have the workforce, that is going to be the biggest challenge
for us.
Mr. Balash. I know from our own experience, Senator, at the
Department of the Interior, we're seeing a graying of our staff
in terms of the expertise or mining in general.
Senator Cortez Masto. Right.
Mr. Balash. And that is something that we see nationwide.
It's not specific to any particular part of the Bureau.
And so, I think there's definitely a need to come back up
the ramp. We've seen, sort of this, sort of the downside of the
curve. We need to come back up in terms of our opportunities
for education. The number of School of Mines that are present
in the West has fallen almost in half in the last 30 years.
That's something that, I think, is a problem as well. If
students who are enrolled in the university systems don't get
exposed to those opportunities as part of their regular
curriculum, as youngsters wander their way through college
years and finding their path, that opportunity needs to be
presented to them.
Senator Cortez Masto. Okay, thank you.
Does anybody else have any thoughts?
Dr. Warner. Hi, good morning.
I would add that from a battery standpoint we find that
there's actually no battery engineering programs. I think
there's two universities that actually have battery engineering
programs.
There's mechanical engineering, chemical engineering,
thermal engineering, but there's very few universities today
that actually do focus on a program to develop battery
engineers which is one of the most unique engineering fields
because it does compromise and compose of all of the
engineering facets from thermodynamics to electronics and
software to the chemistry of it.
Many universities have bits and pieces in programs of them
but very few actually have programs set out to develop, you
know, actual battery engineering. That's one of the areas we
struggle with.
Senator Cortez Masto. Thank you.
Sure.
Dr. Ziemkiewicz. Well, I asked, anticipating this question,
I asked one of my mineral processing colleagues where the jobs
are for their graduates. And they said a lot of them are in
mining, a lot of them are in downstream manufacturing, for
example. But the least amount of jobs was in mineral processing
right now.
And certainly, our experience, my experience personally,
watching the graduates and the size of the different
departments come and go over the years, if there's a job
opportunity out there, then students will flood into those
fields.
Senator Cortez Masto. Right. Thank you.
Thank you. I appreciate the conversation today.
Thank you, Madam Chair.
The Chairman [presiding]. Thank you, Senator.
Senator King.
Senator King. Thank you, Madam Chair.
I think several of you touched on this in your earlier
testimony. What potential is there for mining recyclables, in
other words, recycling? Do the rare earths in a battery
disappear in the chemical process or are they there if we could
develop a very strong recycling process around this problem?
You are in the battery business, tell me.
Dr. Warner. Thank you, Senator.
This is actually an area that NAATBatt has been actively
working on for several years now, and it's an interesting
dilemma.
If you look at the vehicle life cycle, the average vehicle
in the United States has about an 11.5-year life cycle. So the
first electric vehicles were actually launched in late 2009 or
early 2010 which would be----
Senator King. I have a 2012.
Dr. Warner. Perfect.
[Laughter.]
So the Chevy Volt, the Nissan Leaf and Tesla model or the
Tesla Roadster all were launched then. So they should be
nearing their end of life now.
Within NAATBatt we've been working on trying to put
together some industry information to figure out how do we
handle these, when these vehicles start coming back.
Senator King. But my basic question, the chemicals are
still there.
Dr. Warner. The chemicals are still there.
So today the processing either involves a hydro-
metallurgical process or a pyro-metallurgical process. There's
actually new work going on by several organizations, even here
in the U.S., to do what they're calling cathode, de-cathode or
roll-to-roll recycling by which they're able to take the active
cathode materials to reprocessing and get them done quickly.
Senator King. So there is some significant potential here?
Dr. Warner. Absolutely, absolutely.
Senator King. Let me ask a different question.
I am sorry to rush you.
Dr. Warner. No, no.
Senator King. You don't know it, but we have numbers that
go down from five minutes sitting here.
[Laughter.]
As I understand the testimony, the principal environmental
problem may be partially mining but it seems to be processing
and the waste from processing. Is there hope of additional or
new technologies for processing that will minimize the
environmental side effects so that we can move forward with
that here rather than places that have more lax environmental
standards?
Anybody want to touch that?
Mr. Evans. Yeah, I'll take that. Thank you, Senator.
At least in our process, I think, there are ways to do this
and it can be done very, very safely, we could look at
traditional sources leased in lithium, but I also know in
cobalt and others. I think projects can do good and do well
even under the current environmental laws that we have or
what's being promulgated in the future, it's possible to, I
think, live in both worlds.
In our own case here, we're going after an unconventional
deposit and that's been a hallmark of what we're doing here is
not only to create, look at the waste pile itself and look at
it differently and see if we can come up with, maybe even, a
secondary use for it, but also to dry stack it so that we can
store it and put it away in a safer method than might have been
traditionally done in the past, all of this while the project
is still economical. We have a backdrop in this industry of
demand is going up.
Senator King. Right.
Mr. Evans. So pricing for a lot of things has gone up as
well too. That supports----
Senator King. Which opens up additional technologies.
Mr. Evans. Exactly.
Senator King. Let me follow up a bit on that.
I used to say in Maine that I wanted the strongest
environmental standards in the country and the most timely and
predictable process.
Is that what we are talking about here? Are we--we are not
talking about lowering environmental standards, but we are
talking about improving the process so that it is more timely
and less expensive, is that correct?
Mr. Evans. Yes, Senator. So, timely and predictable.
That's the difference in that you go next across the border
to Canada or Australia, they still have strict environmental
standards as well, but they accomplish what Senator Murkowski
had said takes seven to ten years to get approvals here in the
United States. There's a lot of mineral resources in those
countries, it's usually about two years because there's a very
strict process. Agencies work together and they have to get
back and close the process out where things can drag----
Senator King. Well, one of the things we did in Maine that
was helpful, that might be useful, is one-stop shopping. In
other words, you don't have to go serially to five agencies.
Mr. Evans. Right.
Senator King. You have one lead agency and everybody else
works through that process, and we found that to be very
effective.
I may have missed this because I was out for a few minutes.
A lot of talk about China. There is also a lot of talk in the
news today about China, are the tariffs and this trade
unpleasantness going to affect this part of our strategic
supply of these minerals that are--many of which come from
China? Are they included in any of the tariffs or anything
anybody know?
Dr. Solan. Senator, as I understand it, in terms of the
tariffs that we were applying that rare earth elements were not
included with that in the initial list. That was also in
addition to that, it was on pharmaceuticals, but rare earth
elements we were not putting tariffs on, was my understanding.
Senator King. But China, as part of their retaliation,
could diminish, restrict the supply if they chose to take that
financial hit, is that, that is correct? I mean, that is the
strategic danger, right, whether it is in the context of a
trade war or just national competition?
You are nodding. That won't show in the record. Somebody
has to say, yes. The better term is ``yes, Senator, you are
right.''
Dr. Warner. Yes, Senator, you're right.
Senator King. Thank you.
Dr. Ziemkiewicz. I do have an example of that.
The Japanese had a territorial dispute on some islands
between Japan and China. I think it was a few years ago, 2010
maybe. The Chinese simply restricted the ability for the
Japanese to get their rare earth supply and the Japanese caved
within something like three or four months.
Senator King. Because of the Japanese manufacturer of these
high-tech devices that needed that supply?
Dr. Ziemkiewicz. That's correct, Senator.
Senator King. That is an object lesson to us, it seems to
me.
Dr. Ziemkiewicz. Oh, yes.
Senator King. Thank you. Thank you, Madam Chair.
The Chairman. Well, and Senator King, that is exactly why
we are here. That is exactly why we are here.
You think about that level of vulnerability when you have
one nation that really holds the keys to so much of this, and
we have heard that many of the resources are actually located
there. But even if they are not located there, if they are from
other countries, even if they are from the United States, where
are we sending this to be refined, to be processed. It is all
going back to China.
We have, what we believe to be, a very interesting prospect
for critical minerals and rare earths in Alaska, and we would
like to try to figure out how we can move forward with it. But
part of the problem is do we want to be accessing that in
Alaska only to send that to China, only to be vulnerable to
them for the return when it comes back in a reprocessed state?
This is exactly why we need to be having this conversation,
is the vulnerability that we have as a nation now and what we
can do about it. So----
Senator King. Madam Chair?
The Chairman. Sir?
Senator King. I just was handed a news piece. Lithium-ion
batteries are among the list of about $300 billion worth of
Chinese goods upon which the Trump Administration plans to levy
tariffs, of concern.
The Chairman. It should be of concern to all of us, yes.
This is real time for us right now.
I want to ask, Dr. Warner, you raised the issue when we
were talking about the supply chain here, and you call it an
Asia-centric supply chain.
It seems to me that, perhaps, we don't have to own the
whole supply chain there, but we need to have some piece of it.
We need to be intervening in some way. Is there some focus on a
particular part of the supply chain for batteries that you
think would be more important than others, I guess?
Dr. Warner. Yeah, absolutely, thank you, Senator. That's a
wonderful question.
I think that the processing of the materials, as we look
globally, there's materials in many places other than China as
well, as well as we've got here. So I think the processing of
them is actually an area of key importance.
If I can give you one short example. There's some work
going on right now with some, several, companies working on a
process called atomic layer deposition. And this is a process
by which they're actually able to layer single atoms onto
molecules that we use in lithium-ion batteries which promotes
longer life, better energy density and better performance.
And the only reason they're able to do that is because
they're partnering with the processing people, understanding
how the materials are coming out, how they're making it. So if
we can delve deeper into that manufacturing and processing of
those minerals here, that will certainly help ensure those
future technologies coming forward.
And then, I'm a proponent always of the cell manufacturing.
I think as we look at our armed services and the lithium-ion
cells used in much of the military, the space programs, most of
those cells are coming from foreign sources right now. So that
does put us at some strategic disadvantage. So being able to
build cells here and packs here to support those applications
is vital, I think, to our security.
The Chairman. Let me go back to you, Secretary Balash, when
I mentioned just an inventory in understanding. We also know
that many of the minerals that we are consuming are not mined
independently, that they are produced in conjunction with other
minerals. We have a large copper mine in Utah that also
produces molybdenum and radium as byproducts.
I am assuming that it is relatively common that we have
this coproduction in these mineral deposits that if you are
going for say, for instance, copper, there are other elements
that we know to be colocated with these minerals, right?
Mr. Balash. Yes, Madam Chair, that is absolutely correct.
The Chairman. Is it economic or even realistic to produce
some critical minerals on their own?
Mr. Balash. In some cases, it's not economically feasible.
The process of what is typically hard rock mining involves
moving efficiently, a large body of ore, crushing it, milling
it and refining it.
Ultimately, those economics rest on the base or primary
material or product that comes out. All of their own, the
additional supplies of whether it's platinum metals groups or,
you know, some of the other moly products, byproducts, those
economics wouldn't stand on their own without the underlying
recovery of whether it's copper, gold or silver.
The Chairman. So let me ask, Mr. Evans, are there other
minerals that could be produced from your lithium product?
Mr. Evans. There are other chemical compounds, yes,
Senator.
The Chairman. Are you working to access them?
Mr. Evans. Yes, as part of the chemical process that we do
the byproducts, if you will, we're looking for, there are
already markets for those. Actually, there's two byproducts and
even our tailings, as I mentioned to Senator King, we're
looking, actually, at uses for that as well because it's not
toxic at all and it looks like there might be some construction
uses for that.
The Chairman. Good.
Senator Daines, you have not yet asked questions, have you?
Senator Daines. I have not.
The Chairman. Let me turn to you.
Senator Daines. Chair Murkowski, thank you, and I want to
thank you for holding this hearing, truly. And thank you for
working on bipartisan solutions to address the United States'
growing dependence on foreign-sourced minerals and metals.
Let's talk about Montana for a moment. Montana alone is
home to about a dozen minerals that are on the USGS' net import
reliance list. This includes copper, which the U.S. is 32
percent import reliant, as well as silver, which the U.S. is 65
percent import reliant. Both of these can be responsibly mined
in Montana at the Rock Creek and the Montanore mines. However,
and this is a big however, these mines have spent decades
jumping through bureaucratic and litigation hoops, and we still
don't have a date in sight. This lengthy and burdensome process
hurts high-paying jobs that these mines can supply, jobs the
community fully supports. Tax revenue supports local
governments in that part of our State in Northwest Montana and
by delaying it, it perpetuates the U.S.' dependence on foreign
countries.
Mr. Balash, what is the Administration doing to speed up
reviews so that mines like Montanore and Rock Creek are not
stuck in an endless, endless cycle of permit authorization?
Mr. Balash. Thank you, Senator Daines.
The Department of Interior has undertaken a variety of
changes to our business processes wherein we review the NEPA
documents, the foundational documents, for permitting mining
activity on most public lands. And through those changes to our
business processes in DC, we've seen dramatic reductions in the
amount of time that it takes for a NEPA notice, whether it's at
the beginning or at the final stage, to move its way through
our building here in DC. And that has empowered our state
offices to undertake the work on a basis where they understand
and are accountable for the product that comes out.
So, as we've addressed the issues here in the way
headquarters operates, we're now turning our attention to the
state level activities. And what we have found is that Nevada,
in particular, has, the Nevada BLM, has identified some best
practices for engaging in the permitting of mines and
conducting the NEPA associated with hard rock mine activity, in
particular.
So we're now in the process of, in essence, exporting those
best practices from Nevada to other states that have had
difficulties in front of the courts or elsewhere in getting
across the finish line.
Senator Daines. Mr. Balash, I appreciate the administrative
view on that.
I want to shift gears, as we think about legislative action
besides Chair Murkowski's bipartisan bill, what more can be
done in Congress to promote responsible development of critical
minerals in the U.S. so we are less dependent on foreign and
sometimes even hostile governments?
Mr. Balash. So I think the way to describe this is there's
a multi-step process here.
First, we need to understand what it is we have, and I
think the legislation does a good job of calling on the GS and
others to understand what our resource potential is within our
borders.
The second step is to make it incumbent upon the resource
agencies, BLM, but also our partners at the Forest Service and
the Fish and Wildlife Service, to ensure that our land plans
make those resources available, that they don't foreclose or
withdraw them from the playing field.
And then finally, the issue that you've hit on is on the
permitting side, and while in this Administration the one
federal decision doctrine has been identified by the President
and we are seeing some successes in certain places, we
encounter on a fairly routine basis incongruities and
differences between one agency and another. And so, our
timelines don't always sync up well. I think that's an area
where we could be helped along to be able to function more
efficiently overall in the processing of permits for hard rock
mines, in particular.
Senator Daines. Thank you for the thoughtful answer.
I want to ask a second question regarding the green new
deal.
We have the potential to responsibly produce valuable
minerals while also protecting our environment. We see that in
Montana where we have the Stillwater mine there, literally, in
the backdrop of the Absaroka-Beartooth Wilderness.
What I think some people don't understand is that wind
farms and solar panels do not grow naturally in the wild. You
have to mine and refine raw materials to make them. If the U.S.
wants to be a leader in renewable energy, they also have to be
a leader in responsible mining. You can't have it one or the
other. We need to have it both ways. There is no green new deal
without mining. Wind, solar and storage systems use significant
amounts of mined materials and some forecasts project, listen
to this, a 12-fold increase in mining to meet the demands. If
we want to increase renewable energy, we must also increase
development of our natural resources, particularly our mining
capabilities.
Mr. Balash and Dr. Solan, shouldn't we be spurring
responsible development of critical minerals for energy
systems, instead of making it nearly impossible to mine in the
United States?
Dr. Solan, why don't you start?
Dr. Solan. So as I mentioned before, at the Department of
Energy our first pillar in terms of our R&D portfolio is trying
to diversify our supply and encourage U.S. production as part
of that.
One of the ways that we do that is trying to improve
critical minerals recovery from ores. And we'd like to look at
the whole supply chain in terms of our R&D because it will be
really tough, as the Chairman noted, to reprocess or do
separations if we don't have a product to do that with.
It's the same on down the line. If we could improve things
throughout the supply chain and add value throughout, it makes
more economic sense to do all of that in the U.S. So that's
something that also, too, when we talk to our allies around the
world and we have talks with them, is we would like to bring
production to the U.S. and bring it under the American
regulatory umbrella because that would definitely improve
environmental outcomes. It would also add to American jobs and
U.S. economic growth.
You know, that said, the President's December 2017
Executive Order 13817, we've been a part of that. Secretary
Balash has noted the list of critical minerals, and the
Department of Commerce is putting out a report soon whereas at
least leading the report, that will help define a national
strategy for critical minerals. And a big part of that which
we're all working together on has to do with permitting and
streamlining and recommendations for U.S. production.
Senator Daines. I am out of time, Chair Murkowski, so I
will yield back to you. Thank you.
The Chairman. Thank you, Senator. Good questions.
Let me ask about the impact that this lengthy permitting
process has on just an investor's willingness to be
participating here. Mr. Evans, we have acknowledged that it is
just longer here, oftentimes twice as long, maybe more. What is
that doing to the investment environment and the willingness to
even get in the game here in this country?
Mr. Evans. Thank you, Senator.
I think it suppressed interest in domestic projects here. I
think one of the questions earlier is how did this happen
before and the history here is that its investors have gone
overseas. They've gone other places and ignored the assets that
we have here.
And it's going to be a challenge even now to get people off
the sidelines, private investors, because that's what we really
want here is private funding to fund these projects. A reliable
permitting process where people understand it's going to be a
finite amount of time and then construction can start and cash
flow could start and they can basically make a profit after
that is going to help immensely, I think, to drive more public
money and capital into these projects.
The Chairman. Let me ask you, Secretary Balash, when we
think about different ways that we can provide the right
incentives, sometimes it is, well, much of the time it does
focus on the permitting side of it.
There has been a lot of discussion around this place about
an infrastructure package and what that might look like. We all
know that includes things like highways and courts and
transmission systems and bridges, but I also think that we need
to be doing all that with minerals that are produced
domestically. I think that just makes a lot of sense.
What is the Administration doing to keep an eye on the
entire supply chain when we are talking about infrastructure
and an infrastructure package? And then, is there consideration
that within a broader infrastructure bill we are looking to the
permitting side that might include our critical minerals?
Mr. Balash. Thank you, Madam Chair.
The list of materials that will be important to support the
development and reinvestment in infrastructure in this country
goes far beyond what we've identified in the critical minerals
package. However, many of the improvements that both the
legislation calls for and that the Administration has
undertaken to bring timeliness, efficiency and certainty to the
permitting process, at least as it relates to NEPA, are things
that we think can be quite helpful overall in ensuring that the
suppliers of strategic and industrial minerals, to
differentiate from critical ones, are available in time to meet
the needs for the construction activities that would be
undertaken as a consequence.
So whether it's as simple as gravel fill or getting iron
ore for steel beams that go on bridges and trestles, all of
those things need to be available to meet the market signals
that would come about in the lead time running up to actual
construction.
The Chairman. Thank you for that.
I am going to go ahead and vote.
Senator Lee, if you want to go ahead and proceed and then I
will be back.
Senator Lee. Thank you, Madam Chair. Thanks to all of you
for being here today.
I want to start with Mr. Balash.
You know, we have had a lot of discussion today about
streamlining the permitting process and about workforce
development, and those are all important things. It seems to me
that none of those will make a difference, none of those will
matter if we don't have minerals to extract, if we have taken
them all off the table. I think that is something we have to
take into account.
New mining operations are either restricted or banned
altogether on more than half of all federally-owned lands. That
is a stunning figure, especially when you consider the fact
that federally-owned lands make up about 30 percent of all the
land mass in the United States. And a lot of the minerals that
we have in this country are actually on federal public lands.
So, a lot of us, a lot of members of the Senate, while
claiming in one breath to be very concerned about the domestic
supply of critical minerals are, at the same time or in the
very next breath, trying to make it more difficult to do this,
routinely introducing bills to withdraw thousands, sometimes
hundreds of thousands of acres, from any and all new mineral
exploration.
In fact, this very afternoon the Public Lands Subcommittee
will be holding a hearing on some bills that would do precisely
that on a series of bills that when cobbled together would take
out nearly a million acres of federal public land from mining
exploration and development.
Is there any way to guarantee that just because there are
no active claims on given parcels of land that future
exploration or future technology would not discover or make
accessible and economical the mineral development on that land?
In other words, I guess my question is, when we look at bills
like that, that would force mineral withdrawals on our system
of federal public lands, can we always know what is there or
what reasonably could be there given future developments in
technology?
Mr. Balash. Thank you, Senator Lee.
Your comment reminds me of something that stuck with me for
many, many years. It was a conversation with an old ``rock
licker'' geologist who told me, ``markets change, technology
changes, but rocks don't change.'' And understanding what we
have in our mineral estate is critical, not only for
understanding what the opportunity is today, but what it might
be 100 years from now.
And so, I think one of the really important aspects of the
legislation in front of us is, is the assessments that the GS
is called on to perform and to do so periodically because over
time our understanding, our ability, to source and detect those
minerals at deeper and finer resolution levels will improve
over time as well. So that is a long-term understanding we all
need to have.
Senator Lee. In light of that, I appreciate your analysis
on that.
Any time we are having a discussion about critical minerals
and about our ability to access them, whether or not we have an
adequate domestic supply, is it even possible to have a
rational conversation about that without also having an honest
conversation with ourselves about mineral withdrawals on public
lands?
Mr. Balash. So one of the things that, I think, in this
Administration we've tried to take a hard look at is whether or
not administrative actions that withdraw the mineral estate
make sense in that light. And there's a couple that we have, in
fact, reversed from the prior Administrations. And one of those
had to do with a very large withdrawal in the mountain region,
having to do with the targeted efforts to protect sage grouse
habitat. And as we took a look at what was approaching a ten-
million-acre withdrawal, mining activity, surface activity
would have affected, maybe, you know, a fraction of a percent
of that surface. And so, we didn't think that really made
sense, withdrew that or canceled that withdrawal, lifted that
withdrawal and also one in the California desert. So, and we've
resisted granting other administrative withdrawals.
Now, when Congress in its wisdom chooses to take things off
of the federal mineral estate, that's your business.
Senator Lee. I was relieved that you did not use air quotes
there, but you would have been well within your right to do so.
Mr. Chairman, I have one more question, do you care if I
ask that?
Senator Manchin [presiding]. Sure, go ahead.
Senator Lee. Okay, thank you.
Within our system of laws, we have state laws and federal
laws that both have to be complied with. In many instances you
have environmental laws, you have federal NEPA law and state
NEPAs or NEPA-like legislative frameworks in the various
states. This adds a layer of complexity and understandably,
states are themselves sovereign entities, they have their own
right to exist, their own right to make laws.
Are there ways that you can think of that we could reduce
some of the overlap between the federal and state requirements
that could allow applicants to comply with both of them? We
could streamline the processes so they dovetail one with
another.
Mr. Balash. Senator Lee, as a former state executive, I
appreciate your recognition of states' sovereigns and would
note that there are some opportunities, I think, with CEQ, if
they were to maybe address through their regulations our
ability at other federal agencies to take into account the work
that's been done by other governments, specifically state
governments. That would reduce some of the duplication that we
have to undertake in the course of doing our own NEPA reviews
or permitting actions.
Senator Lee. Great. Thank you very much.
Thank you, Mr. Chairman.
Senator Manchin. Thank you.
I will follow up, and then we will see who comes back from
voting. The second vote is going on right now.
Let me ask the question on the tariffs, basically what
tariffs are going to do since it seems that China has very much
of a monopoly on rare earth elements which we are using every
day and it is going to be, I am sure on the batteries, Dr.
Warner.
Do you see the impacts so far? Has it affected you all and
do you anticipate an effect?
Dr. Warner. I think that's an excellent question, Senator.
Thank you.
As of today, we haven't seen the impacts, but I'm looking
to buy cells. So with our new company, as we buy cells
globally, that will make them more expensive which will make
our end products more expensive. The raw materials are still
likely being processed in Asia for those Asian cell
manufacturers, so we'll receive them as a completed unit, as a
lithium----
Senator Manchin. But I am saying that tariffs have been
placed high.
Dr. Warner. And the tariffs are going to be, as the tariffs
are added, they will make those cells more expensive for us to
acquire and that's going to make it more expensive for our
customers down the line. So yes, it's going to add challenges.
Senator Manchin. Dr. Ziemkiewicz, in West Virginia we know
we have an awful lot of change pre-SMCRA that you are probably
looking at and dealing with. Are you basing on if we produced
in all the streams that we have, that we know that we have acid
mine drainage, which gives you, pretty much, a food chain, a
link to join things expediently? That is where you are getting
the 800 tons when you are anticipating that, or where did your
estimation of 800 tons production come from?
Dr. Ziemkiewicz. Eight hundred tons, Senator, are the
number of discharges that we actually sampled. So these were
largely regulated discharges as opposed to the unregulated
discharges.
We reckon there are something like five gallons of
unregulated AML discharge for every gallon of regulated
discharge in the Northern Central App.
Senator Manchin. So it could be four, five, six thousand
tons?
Dr. Ziemkiewicz. Potentially, yes.
Senator Manchin. And that is just in West Virginia, that
was including all the acid mine drainage we have in----
Dr. Ziemkiewicz. That would include Western Pennsylvania
and also Eastern Ohio.
Senator Manchin. Okay.
So it could pretty much have a tremendous effect on the
supply chain?
Dr. Ziemkiewicz. Oh, absolutely.
And another thing, I think it's important to note that
this, if you think about an ore body, ore bodies have the
easily accessible ores, usually on top of the ore body, easy to
mine. The sulfides have gone away and you've got pretty pure
metal. And then you've got the more difficult to extract,
deeper stuff where you have to go underground.
Senator Manchin. Sure.
Dr. Ziemkiewicz. And start exploring.
Senator Manchin. We are talking, I think that Senator Lee
was mentioning about permits, how difficult permits can be, Mr.
Balash, acquiring them. Sometimes it wears people out, they
just don't fool with it.
We have already got a ready-made supply of product and that
is why I can't believe we have not used it or why we are not
looking. But DOE, we are hoping with this piece of legislation,
we have bipartisan support. It makes a lot of sense.
Dr. Ziemkiewicz. Right, it's the high-grade end of an ore
body. That's how I see the acid mine drainage picture. And
that's not even counting the hard rock acid mine drainage which
is gigantic by comparison.
Senator Manchin. What do we do to the water quality after
we process it to take the rare earth minerals out? Are we able
to return it in much better condition?
Dr. Ziemkiewicz. Oh, absolutely.
In fact----
Senator Manchin. Can we bring the stream back to life?
Dr. Ziemkiewicz. Oh, yeah. Yeah, in fact what you'd have is
a classic acid mine drainage plant.
We're putting together a proposal right now for DOE that
would integrate a West Virginia DEP acid mine drainage plant
under their bond forfeiture program with a rare earth
extraction facility integrated in one facility up near Mount
Storm, by the way.
Senator Manchin. Will the DOE take the product to buy, you
know, for what we are producing? Will they be able to use that
or can they process that or do we have to be able to refine it?
Dr. Ziemkiewicz. We would have to create that supply chain,
yeah.
Senator Manchin. So there are no refineries in the country
right now?
Dr. Ziemkiewicz. Not right now, but again, that's something
that could happen fairly quickly.
Senator Manchin. Yes.
Anybody else have anything, because I know if the second
vote is going on and no one returns, we might be wrapping up.
Mr. Evans, do you have anything that you want to add to
this whole process of where we are? You have seen it from the
private sector. Where you are today, do you see getting pinched
from the standpoint of supply?
Mr. Evans. Well, obviously, prices are and costs are going
to go up with the tariffs now and have a knock-on effect as
they will.
Permitting, we've talked about, is critical to have
certainty around that, if you're a private investor or tracking
private investment. You know, things are measured in what your
IRR is, your return, and those processes can go on seven or ten
years and, basically, projects are abandoned or they go broke.
So that's going to continue to be a challenge. Permitting, I
think, is the first start.
We talked about education, and I think that will help some
of the things that Dr. Z. talked about here as well, by putting
some of these things, it's going to spur more innovation around
the country and be able for us to build new supply chains.
Senator Manchin. Dr. Solan, if you could talk to us about,
a little bit, what position you are in for the Department of
Energy, where you all are going, how serious you take this and
how committed are you?
Dr. Solan. We take it very seriously, sir.
I just wanted to echo the point that we see technology in
innovation as the key behind this, and we thank you both for
your leadership in the bills you've put forward. We definitely
look forward to working with you throughout the process.
One of the things that I wanted to mention too is
leadership and innovation and technology is one of the things
that we need to remember whether it's with critical minerals
or, for example, hydrocarbon production in the past is that the
unconventional eventually becomes conventional. And the only
way that you do that is through R&D.
So, for example, Dr. Ziemkiewicz talking about NETL's
programs and the Office of Fossil Energy's programs that need
to begin somewhere. They need to show results. And when that
happens with partnerships with the private sector and academia
and other stakeholders, we can help move things forward.
Senator Manchin. Just to follow up on that. Everyone has an
opinion on the tariffs and I look at a tariff, we have lost a
lot of our desirability, if you will, to do some of the things
we should always be doing for the building blocks for this
great country. The steel and aluminum, if you don't have steel
or aluminum production in your country, it is hard to maintain
the superpower status. If these tariffs are driving back some
of the things that should have never left, it is a good thing.
If we are able to get back to where we can extract and
produce and also refine to where we don't have to be dependent,
wholly dependent, on subsidiaries outside and other countries,
especially foreign entities who are not too favorable and do
not really worry about our economy as much, it could be a good
thing.
This is one that I look at that could be if it gets us back
into that. And I think the Department of Energy, you are going
to be the one driving it so I don't know how much that
Secretary Perry has, I'm sure, talking, conversing, with the
White House on how important the rare earth minerals are that
we are not producing, we are not refining, we are not doing
anything. And that might spur that on to accelerate what we can
into production commercially much quicker than just continuing
to analyze.
Do you know if there has been conversation there on a level
from the Secretary to the White House?
Dr. Solan. Not specifically regarding that. I can't say
what the discussions have been.
Senator Manchin. I am happy to follow up with him, but if
you have a chance, you follow up yourself and this is something
I think is very important for our country.
Dr. Solan. Yeah, I could do that.
Senator Manchin. Okay, thank you, Madam Chairman.
The Chairman [presiding]. Thank you, Senator.
I really appreciate the discussion that we have had this
morning and just the information that you have shared with the
Committee.
One last question, and it is probably to you, Dr. Warner,
and maybe you, Dr. Solan.
As we think about the new technologies that are out there,
the prospects for recycling, there is a lot of excitement and
anticipation in terms of what that can yield. I have heard some
suggest that we don't need to do more to access our own
minerals here in this country. We don't need to make steps in
that direction. We can recycle our way forward. I am wondering
if we are being visionary enough in understanding what the
demand going forward may be so that we are taking into account
the broader increases in electrification, in the associated
infrastructure, that in the future, is going to be relying on
these.
Can any of you give me your comments? Are we to the point
where we can just rely on technology to allow us to meet this
demand or do we need to continue to be the producer of these
raw materials at the same time that we are working on the
technology, because I think there are some who believe that
there is a very easy way out of this and I would like to hear
your thoughts on that.
Dr. Warner.
Dr. Warner. Thank you, Senator.
I think that is an excellent question where we sit now in
the industry. And I don't think that there's a one-size-fits-
all solution. I think that the recycling is absolutely going to
be necessary with just the pure number of lithium-ion batteries
coming into the end of life. But I think, and I think it could
add to a significant portion of the minerals used, but I think
it's going to have to be a policy that includes both the
processing and the mining of natural materials and the refining
of the used ones.
There's new technologies happening today, such as the roll-
to-roll recycling, where they're able to pull cathode materials
off, reprocess those and be able to use those. But those are
still in their infancy stages. Today, most of the recycling
processes will allow you to get some of the copper, some of the
cobalt and some of the rare minerals out of there through a
very expensive process that uses a lot of energy going into it.
But I think going into the future, as we see more and more
of these batteries coming out, as we look at our cell phones,
every cell phone that we've got in the room here and probably
sitting in Washington, DC, use the lithium cobalt oxide
battery. All of those cobalt, what do we do with them when
we're done? How many people have one or two sitting at home in
a drawer somewhere? I know I do. If we have policies which
would allow us to bring those back in and do some urban
recycling, that could be another source of some of these raw
materials.
So I think that using some of the recycling technologies,
continue to develop those recycling technologies will help
supplement the need for some of the natural ones, but it will
certainly help improve our--reduce our dependence on some of
those foreign sources.
The Chairman. Anybody else care to weigh in?
Are the minerals that we have on the list, these are the
ones that we have identified for today, but again, forecasting
into the future, are we going to need to be adding more to that
list, that we just have not even envisioned yet?
Assistant Secretary Balash.
Mr. Balash. Well, Madam Chair, I think that's why having a
periodic reassessment of the list, every couple of years, is
really important.
The Chairman. Yes.
Mr. Balash. Because over time the market demands will
change, the technology will improve and draw on different
pieces and parts of that list.
So, you know, with that dynamism in mind, you can't just
set the list one time and that's going to be it for 20 years.
It just, it won't stand up.
The Chairman. Alright.
Dr. Solan.
Dr. Solan. I agree with that, and one of the things we need
to take a look at is constant evaluation. You bring up a very
good point which is we really need to take a look at trying to
forecast and figure out what's risky and what's not.
The Chairman. Are we doing that?
Dr. Solan. That's one of the things that we do at the
Department of Energy. But some of the sensitivities that we
have, particularly in some of the technologies you've
mentioned, moving forward is how quickly is society going to
electrify and are we going to, are automotive makers going to,
follow through on their commitments on electric vehicles? How
quickly might the consumer be brought to bear in terms of
choosing electric vehicles and how quickly will battery
technologies be used as storage for the grid? So these are all
things that are important.
You know, that said, we constantly take a look at these
issues at Department of Energy according to a specific mineral
or materials, importance to energy and also its supply risk.
And in the past, going back in time, we actually thought that
rare earth phosphors were going to be really important and had
high supply risk, because at that time we thought compact
fluorescent bulbs would be technology moving forward and
technology of the future. And low and behold, it was not the
rare earth phosphors. Now we're talking about gallium because
industry has innovated, and now we have LED light bulbs that
are actually penetrating in the market enough to move world
markets.
I'd just like to close and talk about that which is we have
to take a look at this in terms of a global demand equation.
All the different countries and companies around the world are
competing for the same things, and much of the world's growth
in demand is not going to be in the United States, it's in the
rest of the world or it's in Asia. So in order for us to remain
competitive, we have to take a look at our own supply chain and
our own production.
The Chairman. Very good.
Dr. Ziemkiewicz.
Dr. Ziemkiewicz. One of the things that we tend to overlook
in this whole discussion is that markets themselves tend to be
fairly elastic. And when I say that, the Washington Monument
originally had an aluminum cap on it just to show the world how
rich we were because aluminum prior to the Hall process was
more valuable than silver. Now once the Hall process came
along, then all of that useless bauxite in the tropics became a
valuable ore.
Well, I think the same thing may happen with some of the
rare earths and critical minerals. For example, the cheapest
rare earths right now go for about $8 per kilogram, $8,000 a
ton. Well that blocks out a lot of markets. If we had the
supply, if we had the low-cost processing, then all of a
sudden, the price goes down, but the market increases in size.
So we have to keep that in mind over making these assessments.
The Chairman. Very interesting.
We have had good input here today from Department of the
Interior as well as Department of Energy, but I am reminded
that it is the Department of Commerce that has led the
development of a strategy to reduce this country's reliance on
foreign minerals. We have been waiting to see that report for
months.
I am sorry that we have not seen that be released yet. We
certainly are looking forward to that. But again, it is just a
reminder that this is, kind of, a ``whole of government''
approach here when we are talking about our minerals and
mineral security and what that means. It is not only what
Interior does with accessing them from our lands, what Energy
is doing to work on the technologies, but how that fits then
from a broader view of Commerce, not to mention the perspective
from Defense, obviously, very, very key to the discussion as
well.
I hope that Interior and Energy, just as you have outlined
today, your Departments are working aggressively on this.
Hopefully there is coordination with the Department of Commerce
as we are talking about the broader strategy.
You are nodding your head to affirm that that level of
coordination is going on?
Mr. Balash. Yes, ma'am.
Dr. Solan. Yes, it is.
The Chairman. You do not say that with levels of exuberant
enthusiasm which kind of concerns me.
[Laughter.]
Can you give me any insight in terms of when we might
expect this from Commerce on a release? I know it is not your
Department, but what do you know?
[No response.]
The Chairman. Okay, there's a lot of cooperation going on
between the three.
[Laughter.]
I won't hold you to that, but maybe I will follow up with
the folks over at Commerce and see if we can rattle some cages
over there.
I thank you for the leadership that we are seeing, not only
within our Departments but on the private sector side and in
academia. This is an issue that will continue to be on my front
burner in terms of priorities.
I really feel like we did something extraordinarily
significant when we were able to release the United States'
potential when it came to reducing our vulnerability on oil by
lifting the oil export ban. It was a policy that was holding us
back. And it has really, truly helped make a difference when it
comes to levels of vulnerability.
But I fear that we are going in the same direction that we
were previously with oil when it comes to minerals and our
mineral security. That is not a place where I want to be. I
don't think it is a place where any of us want to be. And it is
going to take accessing these resources domestically, it is
going to take the skilled workforce at all levels and it is
going to take the ingenuity to build out these technologies.
Dr. Ziemkiewicz, it has been fascinating hearing your
report here today just in terms of what cool and neat things
that we are finding in places that one would never have
anticipated, nor expected. And just again, a reminder of the
greatness that we have in so many of our learning institutions,
our national labs and the bright people that we have that are
focused on these difficult issues.
Thank you for joining us, and thank you for your testimony.
We will look forward to advancing both the bill I have been
leading as well as Senator Manchin's, and would appreciate your
continued input as we move forward with these.
With that, the Committee stands adjourned.
[Whereupon, at 11:56 a.m. the hearing was adjourned.]
APPENDIX MATERIAL SUBMITTED
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