[Senate Hearing 116-336]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 116-336
 
  THE SOURCING AND USE OF MINERALS NEEDED FOR CLEAN ENERGY TECHNOLOGIES

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 17, 2019

                               __________
                               
                               
                               
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 

                               


                       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 
 37-816                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

                              ----------                              

                           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..................................................    10

                               WITNESSES

Simmons, Hon. Daniel, Assistant Secretary for Energy Efficiency 
  and Renewable Energy, U.S. Department of Energy................    12
Carlson, Allison, Acting Managing Director, FP (Foreign Policy) 
  Analytics......................................................    29
Kang, W. Robert, Chief Executive Officer, Blue Whale Materials 
  LLC............................................................    37
Bazilian, Dr. Morgan D., Professor and Director, Payne Institute 
  for Public Policy, The Colorado School of Mines................    42
Mills, Mark P., Senior Fellow, Manhattan Institute...............    52

          ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

Advanced Magnet Lab, Inc.:
    Letter for the Record........................................   115
American Elements:
    Statement for the Record.....................................   139
Bazilian, Dr. Morgan D.:
    Opening Statement............................................    42
    Written Testimony............................................    44
Carlson, Allison:
    Opening Statement............................................    29
    Written Testimony............................................    31
    Responses to Questions for the Record........................    96
Coeur Mining, Inc.:
    Statement for the Record.....................................   143
Kang, W. Robert:
    Opening Statement............................................    37
    Written Testimony............................................    39
    Responses to Questions for the Record........................   112
Manchin III, Hon. Joe:
    Opening Statement............................................    10
Mills, Mark P.:
    Opening Statement............................................    52
    Written Testimony............................................    54
    Responses to Questions for the Record........................   114
Murkowski, Hon. Lisa:
    Opening Statement............................................     1
    Congressional Research Service (CRS) report dated 9/10/2019 
      entitled ``Projected Demand for Critical Minerals Used in 
      Solar and Wind Energy Systems and Battery Storage 
      Technology''...............................................     4
Risch, Hon. James E.:
    Written Statement............................................    71
Simmons, Hon. Daniel:
    Opening Statement............................................    12
    Written Testimony............................................    15
    Responses to Questions for the Record........................    85


                    THE SOURCING AND USE OF MINERALS

                  NEEDED FOR CLEAN ENERGY TECHNOLOGIES

                              ----------                              


                      TUESDAY, SEPTEMBER 17, 2019

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:41 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.
    I would like to start this morning not with the topic of 
our hearing, but certainly the topic of the day, the topic that 
has been dominating our headlines and that is the attacks over 
the weekend on the Saudi oil infrastructure which have 
threatened Middle East security and rattled global oil markets.
    I certainly condemn these attacks, I think all of us do, 
and those that perpetrated them. I have read the classified 
briefing that is available to all Members. I spoke last night 
with the Deputy Secretary of Energy. And while the details and 
impacts are still publicly emerging, it is clear our 
intelligence and national security teams certainly have a lot 
of work to do in concert with our partners in the region.
    I think we all recognize that this is a difficult 
situation, and that is putting it mildly. But as I look to 
where we are today, I think we also recognize that the impact 
that we are seeing could be worse. Over the weekend we saw 5.7 
million barrels of oil go offline. Yesterday the WTI closed at 
less than $62 a barrel. I think we will likely see higher 
gasoline prices in the days and weeks ahead. It is never a good 
thing. But I would urge the Committee, urge all of us, to just 
kind of think about how much worse the situation could have 
been were it 10 or 12 years ago.
    These attacks, in my mind, are a reminder that there is no 
substitute for American energy production, which has grown into 
a stabilizing force for world markets. They are a reminder of 
the importance of good policy that recognizes the global nature 
of modern energy. When you think about how the markets would 
have reacted and what our allies would be asking, if we had not 
lifted the crude export ban back in 2015.
    These attacks are also a reminder that we need to maintain 
a robust and functional Strategic Petroleum Reserve and not 
simply treat our emergency stockpile as an ATM to pay for 
unrelated spending. You hear me talk about that all the time. 
Again, I think this is just a reminder of why we want to make 
sure that we have reserves at the ready.
    I am certainly going to be paying close attention to this 
situation in the days and the weeks ahead. But for anyone 
wondering why so many of us believe that supply matters, 
American supply, from places like my State of Alaska, now you 
know. Our production creates jobs, generates revenues, helps 
keep energy affordable, and strengthens our national security.
    Now, unfortunately, these attacks are also relevant to our 
subject this morning, which is minerals. We are heavily or 
entirely dependent on foreign suppliers for dozens of these 
commodities. We don't have guaranteed supplies, much less 
stockpiles or even strategic reserves, to cover ourselves in 
the event of a shortage.
    We are here this morning to discuss the minerals needed for 
clean energy technologies, particularly renewable energy. I 
will just make a simple observation here. If we do not address 
our domestic mineral supply chains, we will dramatically lower 
the chances that America can lead the world on renewable energy 
and other key industries of the future.
    Minerals are the fundamental building blocks for any modern 
technology, whether they are light bulbs or computers or 
airplanes. In the energy world, batteries don't work without 
lithium, without graphite, cobalt and nickel. Solar panels 
require silver, gallium, indium and tellurium, and wind 
turbines are built not just from steel, but also from aluminum, 
from copper and rare earth elements. We all know that these 
minerals just don't appear out of thin air. They are mined from 
the ground. They are processed. They are refined into materials 
that can be manufactured into an end product.
    You have heard me refer to the ``immaculate conception'' 
theory of energy where many people think you can just flip a 
switch and the lights come on, or you pull up to a gas station 
and miraculously there is fuel there, but this is also 
applicable and equally wrong on the minerals side. Sometimes I 
think it is hard for people to acknowledge that the products 
that we rely so heavily on, whether it is your cell phone or 
otherwise, are built from things that come from the ground.
    Right now, the United States is falling further behind in 
the global race to control supply chains for new technologies. 
Allowing that to happen is a massive strategic mistake, 
impacting everything from our ability to create high-paying 
jobs to our national security and influence on the global 
stage. We are already behind the curve.
    We will hear today how China is consolidating control of 
the entire supply chain for clean technologies, from raw 
minerals mined out of the ground to manufacturing solar panels 
and recycling batteries. Chinese companies are going into 
countries like the Congo, Chile, and Argentina to control 
cobalt and lithium mines. They are even taking the small 
amounts of rare earths that are produced in California, 
processing them in China and then they export it back to the 
U.S. because we don't have the domestic capability to do it 
ourselves.
    I have been calling attention to this issue for almost a 
decade now. I feel like we have gained some traction in these 
past couple years. I commend the Administration for its 
attention to this issue, including its recent report with 
dozens of recommendations to increase America's mineral 
security.
    Yet the fact remains that so many countries are doing a lot 
more. For example, Australia has also released a critical 
minerals strategy. Theirs is much more aggressive than ours. 
Countries like Canada are far more efficient in permitting than 
the U.S., giving them a distinct advantage in the global 
competition for investment dollars.
    The other piece of this discussion is the national and 
global push to transition our energy systems to renewable 
energy. As we have those discussions, we need to take a 
holistic approach and keep in mind the increases in mineral 
demand that these technologies will inevitably lead to.
    This morning, I am releasing a short report from the 
Congressional Research Service that summarizes three different 
analyses of the quantity of materials needed to meet various 
renewable and greenhouse gas emission goals.
    [The CRS Report entitled ``Projected Demand for Critical 
Minerals Used in Solar and Wind Energy Systems and Battery 
Storage Technology'' follows:]

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    One comes from the World Bank, which forecasts that demand 
for certain minerals will increase by more than 1,000 percent 
under an aggressive scenario to limit warming.
    I think that the United States is certainly capable of 
being a leader in this area. We have incredible, high-grade 
mineral deposits and we have the highest labor and 
environmental standards in the world, but we have to find the 
political will to advance policies that will allow us to 
rebuild a robust domestic supply chain.
    I am hopeful that by highlighting the direct link between 
minerals and clean energy technologies we can gain additional 
support for our legislative efforts which are designed to help 
us avoid future shortages and strengthen our manufacturers.
    So as we begin this morning, I would like to thank our 
witnesses for joining us. I understand that most of you changed 
travel plans to be here, which we greatly appreciate, as we 
focus on this critical issue this morning so thank you for 
that.
    I will now turn to my Ranking Member, Senator Manchin.

              STATEMENT OF HON. JOE MANCHIN III, 
                U.S. SENATOR FROM WEST VIRGINIA

    Senator Manchin. Thank you, Madam Chairman.
    I concur with you on all of our concerns about the attack 
on Saudi Arabia, the attack on energy supplies around the 
world. I don't think Saudi is going to be the exception. I 
think there is going to be a lot more that we are going to see, 
strategic strikes.
    I want to thank you for holding the hearing today. I want 
to thank the panel for being here. This is the most expertise 
panel. I think we are going to learn an awful lot from you all 
and look forward to that.
    As our Committee rightly focuses our attention on the whole 
portfolio of clean energy technologies, we must also pay 
attention to the mineral commodities that make these 
technologies possible. It is important for us to know where and 
how these minerals are sourced and to fully understand the 
challenges and opportunities that they play in the deployment 
of clean energy technologies.
    Renewable energy sources and storage play growing and 
crucial roles in the energy sector. In fact, according to a 
recent report, renewable energy investments will likely exceed 
$2.6 trillion in this decade--$2.6 trillion in this decade. 
Electric vehicles are also expected to be a growing part of our 
energy future.
    The common denominator between all of these clean energy 
technologies is a handful of minerals that either occur in 
limited abundance or only in certain countries around the 
world--so it is not accessible any place that you may live.
    According to a March 2017 article in Nature magazine, 
mineral resourcing and climate change are inextricably linked, 
not only because the mining requires a large amount of energy 
but also because the world cannot tackle climate change without 
an adequate supply of raw materials to manufacture clean 
technologies. I would add, at the same time we must also not 
become so desperate for these minerals that we throw our 
bedrock environmental laws out the window which we see 
happening every day.
    Mining companies today are finding it harder and harder to 
obtain and maintain their social license to operate. It only 
takes one or two accidents to put a stain on the entire 
industry. And when you lose buy-in from the local communities, 
you experience delays which only puts increased stress on 
mineral supplies. There is a balance to be had between 
extraction and environmental protection, and I think that is in 
every segment, every segment.
    However, looking at what China is doing in places like the 
Democratic Republic of the Congo (DRC) and other central 
African countries, I worry about the global state of play, and 
I think there is cause for concern. China has a long-term 
strategy to establish major stakes in global markets for a 
handful of key elements for renewable energy or storage 
technologies. A few large upstream Chinese companies will 
source and export these minerals and through a complex, a very 
complex, supply chain they will be refined and smelted in China 
and sold to downstream companies. For example, cobalt is often 
mined by artisanal miners which are children, amateurs, people 
who have never done it, no experience at all, and they are not 
often authorized or regulated by the DRC.
    Unfortunately, as much----
    [Cell Phone Rings.]
    I am sorry. That is usually a fine where I come from.
    [Laughter.]
    The Chairman. It is reminding you about critical minerals.
    Senator Manchin. I know.
    [Laughter.]
    And it works.
    Unfortunately, as much as 20 percent of the cobalt exported 
from the DRC to China for processing is done by these amateur 
miners. Children, as young as seven, have been documented 
working brutal hours in unsafe conditions, mining for cobalt in 
the DRC, or the Republic of the Congo. And that same 
unregulated, unauthorized cobalt ends up in some of the 
products we use for clean energy technologies right here in the 
United States.
    Let me be clear. I support mining. I come from a mining 
state, an extraction state, but I believe that we need to be 
doing it right, responsibly and safe. The United States has an 
obligation to be developing the best mining standards and 
processes to be used as a model for the rest of the world, and 
that means we need to have updated laws on the books that match 
the current needs of our society. That includes both 
responsible mining and recycling, and on that front I am 
encouraged by innovative examples that our witnesses, that all 
of you, are going to speak to today.
    I understand that Mr. Kang's company, for example, recycles 
end-of-life minerals to be used in new technologies. There is a 
large number of electric vehicles reaching the end of the 
useful lives here in the United States, and I am curious to 
hear more from our panel today about how we can improve our 
national recycling policies in these areas.
    The DOE, of course, has a big role to play in this space, 
and I appreciate Mr. Simmons being here today to tell us about 
how research investment at DOE is helping to solve these 
challenges, and how they plan to do more.
    With that, I welcome all of our witnesses. I thank you all 
for being here today as we help get a better understanding of 
the complexities of these supply chains and energy critical 
minerals and I look forward to hearing from you.
    Thank you, Madam Chairman.
    The Chairman. Thank you, Senator.
    I think we all appreciate the need for the balance there. 
While we recognize that we have a very clear need and a growing 
and accelerated need for these minerals, we also want to do it 
responsibly. That is why, I say, we want to do it here because 
we are doing it safely with environmental regulations that, I 
think, we can be proud of.
    Let's turn to our panel this morning, a strong panel. 
Again, we appreciate you all being here.
    We are going to be led off this morning by the Honorable 
Daniel Simmons, who is the Assistant Secretary for the Office 
of Energy Efficiency and Renewable Energy, EERE, at the 
Department of Energy (DOE). We welcome you.
    Ms. Allison Carlson is the Managing Director for Foreign 
Policy (FP) Analytics. We welcome you.
    Mr. Robert Kang is the CEO for Blue Whales Materials. We 
are glad to have you here this morning.
    Dr. Morgan Bazilian is the Director of the Payne Institute 
and Professor of Public Policy out at the Colorado School of 
Mines. We welcome you.
    And Mr. Mark Mills has been before the Committee on 
numerous occasions. He is a Senior Fellow for the Manhattan 
Institute for Policy Research.
    We welcome you all.
    Assistant Secretary, if you would like to lead off?
    We would ask you all to try to limit your comments to about 
five minutes. Your full statements will be included as part of 
the record, and then we will have an opportunity for the back 
and forth.
    So, welcome, Mr. Simmons.

   STATEMENT OF HON. DANIEL SIMMONS, ASSISTANT SECRETARY FOR 
  ENERGY EFFICIENCY AND RENEWABLE ENERGY, U.S. DEPARTMENT OF 
                             ENERGY

    Mr. Simmons. Thank you, Madam Chairman, Ranking Member 
Manchin and members of the Committee. Thank you for the 
opportunity to testify today on behalf of the Department of 
Energy.
    My name is Daniel Simmons. I'm the Assistant Secretary for 
the Office of Energy Efficiency and Renewable Energy at the 
Department of Energy.
    Critical minerals are used in many products important to 
the U.S. economy, energy and national security. The 
manufacturing and deployment of these products provides 
Americans with additional employment as well as contributes to 
overall economic growth. Where the production occurs in the 
United States it is at higher environmental standards than 
almost anywhere else in the world.
    For the Department of Energy, critical minerals play a 
crucial role in a number of different energy technologies 
across the Department's research and development portfolios. 
For the U.S. clean energy industry, access to critical minerals 
assures that it can continue to innovate, increase output and 
efficiency and stay ahead in globally competitive markets.
    For example, some of the minerals that DOE considers most 
critical in terms of supply risk include gallium for LEDs, rare 
earth dysprosium and neodymium for permanent magnets and wind 
turbines and electric vehicle battery--or electric vehicle 
motors and cobalt and lithium for electric vehicle and other 
batteries.
    According to a 2017 World Bank report on critical minerals, 
``The technologies assumed to populate the clean energy shift--
wind, solar, hydrogen, and electricity systems--are in fact 
significantly more material intensive in their composition than 
current traditional fossil-fuel-based energy supply systems.''
    Material intensity and potential global demand is 
illustrated by a recent report, by a recent analysis, by the 
Head of Earth Sciences at the Natural History Museum in the UK. 
Using the most current technologies, for the UK to meet their 
2050 electric car targets it would require just under two times 
the current annual world cobalt production, nearly the entire 
world production of neodymium, three-quarters of the world's 
lithium production and at least half of the world's copper 
production. And to put that in perspective, the UK, the 
population of the UK is only 66 million currently, while the 
population of the United States is 327 million. That is a 
massive amount of these critical minerals that is required.
    Cobalt makes up 20 percent of the weight of the cathode of 
lithium-ion electric vehicle batteries. Today, cobalt is 
considered one of the highest material supply risks for 
electric vehicles in the short- and medium-term. Cobalt is 
mined as a secondary material from mixed nickel and copper ore 
with the majority of the global supply mined in the Democratic 
Republic of Congo, as Senator Manchin mentioned, a place with 
poor environmental and labor conditions. The dependency of the 
U.S. on foreign sources of critical minerals creates a 
strategic vulnerability for both our economy and our military 
with respect to adverse foreign government actions, natural 
disasters and other events that could disrupt supply.
    Within the Department of Energy, research and development 
investments are coordinated around three main pillars to 
address supply chain disruption risk. Number one, diversifying 
supply of critical minerals, including increasing domestic 
production, processing all throughout the supply chain; number 
two, developing substitutes; and number three, driving 
recycling, reuse and more efficient use of critical materials 
overall.
    The Administration believes that we need to do more to 
secure a reliable supply of critical minerals and products made 
from critical minerals. We have made progress in reducing the 
need for some critical materials in some applications, and we 
have made progress in recycling critical minerals; however, we 
need to increase domestic exploration, production, recycling 
and reprocessing of critical minerals.
    The Federal Government needs to do more to expedite and 
enable exploration, mining, concentration, separation, 
alloying, recycling and reprocessing of critical minerals. We 
need to enable the entire supply chain here in the United 
States. We will continue to partner with industry, academia and 
other federal agencies to forge paths toward greater critical 
mineral security while also working with Congress to assure 
appropriate stewardship of taxpayer dollars.
    I appreciate the opportunity to appear before this 
Committee to discuss the Department's efforts to increase 
critical mineral security this morning.
    Thank you very much.
    [The prepared statement of Mr. Simmons follows:]
    
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    The Chairman. Thank you, Mr. Simmons.
    Ms. Carlson, welcome.

  STATEMENT OF ALLISON CARLSON, ACTING MANAGING DIRECTOR, FP 
                   (FOREIGN POLICY) ANALYTICS

    Ms. Carlson. Good morning, Madam Chairman, Ranking Member 
Manchin and members of the Committee. Thank you for the 
invitation and for your attention to this very important topic.
    My name is Allison Carlson. I'm Managing Director at 
Foreign Policy Analytics, a member of the Foreign Policy Group.
    As countries around the world ramp up renewable energy 
goals and focus on clean technology development, relatively 
scant attention is being paid to the raw materials required to 
achieve these ambitions and China's increasing control over the 
inputs vital to our clean energy economy and competitiveness. 
Batteries, wind turbines, solar panels and the digital 
technologies upon which our clean energy future depends require 
critical minerals and metals that are located in a surprisingly 
small number of countries and which few commonly found 
substitutes are available.
    China is already the number one producer and processor of 
at least ten critical minerals and metals that are essential to 
clean energy and high-tech industries including rare earth 
elements and several of the other critical minerals that have 
already been mentioned. Its hallmark initiative, ``Made in 
China 2025,'' aims to establish global leadership in these 
industries and is driving the systematic acquisition of those 
and other critical minerals around the world. To achieve these 
objectives, in October 2016 the government announced an action 
plan for its metals industry to achieve world power status by 
deploying state-owned enterprises (SOEs) and state-linked firms 
to resource rich hot spots around the globe. China would 
develop and secure other country's mineral reserves, including 
minerals in which China already holds a dominant position, 
giving that country both an economic edge in the next 
industrial revolution and increasing geopolitical power.
    The timing could not have been better. The fall in metal 
commodity prices in 2011 to 2015 left many mining companies 
around the world desperate for capital. By directly acquiring 
mines, accumulating equity stakes in natural resource companies 
and making long-term purchase agreements for current and future 
output, Chinese firms have traded much needed capital for 
control or influence over large shares of global production of 
these resources.
    China's steady accumulation of cobalt in the Democratic 
Republic of Congo, as was mentioned, which is essential for 
battery and energy storage technologies, is illustrative of 
this strategy. The DRC is home to nearly two-thirds of the 
world's cobalt production and half of its known reserves. For 
over a decade, China's SOEs and private firms have targeted 
debt-stressed mining companies and secured equity shares and 
influence over a majority of mines and over 52 percent of the 
country's cobalt production.
    Chinese SOEs driven strategy remains dominant throughout 
Africa where adverse market sentiment and financial hardship in 
the mining industry have opened the door for SOE investment 
across the region. Notably, SOEs have partnered with the China-
Africa Development Fund to expand in Africa's Bushveld Complex. 
Bushveld is a mineral rich, geological formation that contains 
the world's largest reserves of platinum group metals which are 
key to making catalytic converters that reduce automobile 
emissions. The Complex also holds the world's highest grade and 
third largest deposit of vanadium, a resource integral to the 
broad range of high-tech industries from renewable energy 
storage to aerospace and defense.
    Though China is already a global leader in vanadium, 
tapping into the resource rich Complex will give China an edge 
in the development of redux flow batteries and support its plan 
roll out of a 100-megawatt energy storage stations to manage 
its wind and solar output.
    China's position is even stronger in graphite, an element 
carbon whose high conductivity makes it a major component in 
electrodes, batteries and solar panels. Rapidly growing demand 
for batteries and other end uses, coupled with environmental 
restrictions in China, are driving prices higher and 
stimulating investment in new projects concentrated in 
Mozambique where the largest graphite mine and fourth largest 
known reserves are located.
    Increasing volumes of graphite are being channeled toward 
China's booming domestic battery and new electric vehicle 
industries. Stockpiling domestic production and restricting 
graphite exports could result in a supply crunch for other end 
users.
    China is also proving agile at adapting to conditions in 
market-oriented, democratic countries using privately-owned 
companies that are backed by state capital. Nowhere is this 
privately-driven resource strategy more evident than in the 
three countries where nearly 90 percent of global lithium 
production and more than three-quarters of the world's known 
lithium reserves are located: Chile, Argentina and Australia. 
By incrementally acquiring equity stakes in major local 
resource companies and financing junior developers, Chinese 
firms are strengthening their market presence. More than 59 
percent of the world's lithium resources are now under Chinese 
firms' control or influence through equity stakes.
    While China's resource accumulation is vast, that country's 
control over clean energy technology and their supply chains is 
not a forgone conclusion. It will, however, require us to 
fundamentally rethink how we understand strategic industries 
and the long-term investments that are needed to support U.S. 
clean energy manufacturing. While sustainable resource 
development will be part of the analysis, intensified focus on 
industrial and post-consumer minerals recycling, robust 
investments in material science and research and development 
could help reduce dependence on extraction, mitigate supply 
chain vulnerabilities and provide alternative resources of 
supply that will be critical to U.S. competitiveness in the 
next industrial revolution.
    Thank you so much again for the invitation. I appreciate 
being here.
    [The prepared statement of Ms. Carlson follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]    
        
    The Chairman. Thank you, Ms. Carlson.
    Mr. Kang, welcome.

  STATEMENT OF W. ROBERT KANG, CHIEF EXECUTIVE OFFICER, BLUE 
                      WHALE MATERIALS LLC

    Mr. Kang. Madam Chairman Murkowski, Ranking Member Manchin, 
honored Committee members, thank you for the opportunity to 
appear before you today to discuss the sourcing and use of 
minerals needed for lithium-ion batteries, a rapidly growing 
sector that is leading the electrification of transportation 
and energy storage for a variety of applications.
    My name is Robert Kang, and I am CEO of Blue Whale 
Materials, a leading lithium-ion battery recycling company in 
the United States.
    As we sit here today, I suspect every one of the people in 
this room is carrying a lithium-ion battery powered device, 
preferably on silent, and news is coming out almost daily----
    Senator Manchin. Sorry.
    [Laughter.]
    Mr. Kang. ----about new commitments from auto manufacturers 
to move to electric vehicle production powered by lithium-ion 
battery technology. The question is no longer if, but when, 
those lithium-ion batteries will become the dominant energy 
storage devices in the world.
    Behind the growth of lithium-ion batteries lies a battle 
for the materials critical to their production. Demand for 
cobalt, nickel, lithium, and graphite is projected to rise 
dramatically to meet the future demand for lithium-ion 
batteries. The U.S. has fallen behind in this global race to 
secure access to these critical minerals including cobalt and 
lithium.
    As a result of these supply constraints and the increased 
projected demand for these minerals, manufacturers of lithium-
ion batteries and products reliant on lithium-ion batteries are 
seeking new and alternative sources of these minerals at 
earlier points in the supply chain.
    The lithium-ion battery recycling industry provides one 
answer to meet the demand for U.S. sources of critical 
minerals. The lithium-ion recycling industry operates in three 
categories.
    First, collectors gather spent batteries from consumers, 
industrial sites, and manufacturers and sorts them into 
different chemistries for further recycling. Next, processors 
take those sorted batteries and discharge them to eliminate the 
risk of thermal events and then process them to create 
intermediate metal products. Processing methods range from very 
crude shredding to a more sophisticated process that isolates 
the higher value metals such as cobalt and nickel and produces 
a more concentrated intermediate product. Finally, processors 
sell the intermediate metal material to refiners that produce 
pure metal to battery precursor manufacturers to be used in new 
lithium-ion batteries.
    As this Committee considers measures to strengthen access 
to critical minerals in the United States, a number of measures 
could help spur the U.S. lithium-ion recycling industry.
    First, we need to collect far more of the spent batteries 
for recycling. The U.S. currently collects less than 5 percent 
while Europe collects approximately 40 percent or more.
    Secondly, we need to expand the United States' capacity to 
process batteries. Today we ship most of our collected lithium-
ion batteries for recycling to China, South Korea and Europe. 
Increasing U.S. processing capacity will allow U.S. businesses 
to control the flow of these metals earlier in the supply 
chain.
    Lastly, we should encourage refining capabilities here in 
the U.S. A market for recycled metals will support investments 
to strengthen the entire lithium-ion battery industry in the 
U.S.
    As this Committee evaluates possible approaches to increase 
U.S. access to critical materials, we commend the Committee for 
including recycling provisions in the American Mineral Security 
Act. We see several possible ways to increase investment and 
innovation in this space.
    First, there are significant opportunities for innovation 
with the individual states, which can and should explore 
policies to increase the recycling of lithium-ion batteries. 
For example, California and Maryland are seeking policy 
proposals for effective lithium-ion battery recycling that have 
the potential to serve as models for national adoption. We are 
encouraged by the progress these initiatives might offer, but 
funding these programs is an obstacle for many states. We 
recommend this Committee consider federal matching funds for 
state programs or investments in collection, processing and 
refining projects to spur lithium-ion battery recycling here in 
the U.S.
    In addition, we encourage this Committee to consider other 
creative ways to spur investment in this sector. The 
Opportunity Zone credit has been effective at generating 
investment in specific geographic zones, and we recommend a 
similar approach that targets specific industries, including 
collection, processing and refining of lithium-ion batteries. 
Such investments will not only provide access to critical 
minerals here in the U.S., but will create manufacturing jobs, 
solve important safety concerns, and help support a more 
developed lithium-ion battery industry in the United States.
    If the U.S. is going to lead the next generation of 
technology transformation brought by the advent of the lithium-
ion battery, we must have access to a reliable and sustainable 
source of these critical minerals. Recycling is one solution to 
this challenge, and the policy of this government should be 
designed to stimulate the industry.
    Thank you so much for your time, and I appreciate and look 
forward to your questions.
    [The prepared statement of Mr. Kang follows:]
    
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    The Chairman. Thank you, Mr. Kang, we appreciate your very 
specific recommendations there.
    Dr. Bazilian.

 STATEMENT OF DR. MORGAN D. BAZILIAN, PROFESSOR AND DIRECTOR, 
PAYNE INSTITUTE FOR PUBLIC POLICY, THE COLORADO SCHOOL OF MINES

    Dr. Bazilian. Good morning, Chairman Murkowski, Ranking 
Member Manchin, and members of the Committee. It's an honor to 
be here to talk to you about the topic of the mineral 
foundations of the energy transition.
    My name is Morgan Bazilian. I am a Professor and Director 
of the Payne Institute for Public Policy at the Colorado School 
of Mines. The Colorado School of Mines is one of the finest 
universities in the world on the topics being discussed today.
    For my testimony today I have five points.
    First, the future energy system will be mineral intensive. 
We can be confident that the tremendous growth and innovation 
in clean energy technologies will continue. Each of these clean 
energy technologies relies on significant quantities of a 
diverse group of critical minerals and metals. And while the 
focus is rightly on the minor metals, space metals are also 
being affected by this change.
    As noted, my former employer, the World Bank, has 
quantified the scale of this demand growth and subsequently 
they've launched something called the Climate Smart Mining 
Initiative which helps developing countries engage on these 
issues.
    Second, this is a tremendous opportunity for the mining 
industry, an industry that has experienced enormous public 
pressure and critique accompanied by offshoring of production 
can now evolve into one fundamental to supporting a shift to a 
low-carbon and sustainable energy system based on domestic 
natural resources. Crafting this positive narrative is critical 
to creating a vibrant and sustainable mining sector in the U.S. 
and abroad. And as Senator Manchin said, it's also critical to 
supporting issues of social license to operate.
    Third, the sector is diverse. The set of minerals required 
for clean energy technologies is heterogeneous and have their 
own set of supply chain conditions. Each will thus require 
individual examination and policy prescriptions. Most of these 
markets are not liquid, nor transparent. They also do not 
provide clear price signals and thus, investment decisions are 
exceedingly difficult to make. Complicating this further, some 
of these minerals are secondary or tertiary. Humility is 
required. While it's immediately attractive to focus on mineral 
supply, there's only one place to stimulate activity. From 
exploration through to mining, refining, manufacturing and 
recycling, each part of the supply chain offers opportunities 
and challenges for U.S. company entry. And as you're aware, 
currently China has become the dominant world player in many 
parts of that chain.
    Fourth, we have useful precedent for security and policy 
from the energy sector. Chairman Murkowski, you've said that 
energy and mineral security are the building blocks of a robust 
economy. It's clear to me from my research and the literature 
and current indicators that that is correct. These issues of 
supply threats, international relations, security and the 
related analysis have been well considered in energy policy. 
And as you note, that's been demonstrated in some of the 
responses to the attacks in Saudi Arabia. What has become clear 
over decades of energy security analysis is the goal of 
independence or even dominance is not useful. Rather, a focus 
on diversity of supply and demand as well as better 
understanding of resilience across the supply chain will lead 
to a more sophisticated and robust approach. Recall that the 
British Navy under Winston Churchill between 1912 and 1914 
shifted from domestic coal to imported oil. It was a vital 
decision to the success of their military operations. One 
lesson from that is that domestic resources alone are not 
always the key to success.
    Fifth, this is a global issue. The 2019 Department of 
Commerce Federal Strategy for Critical Minerals has 
acknowledged this clearly in its six action areas. And while 
withdrawing from the extractive industry's transparency 
initiative was short-sighted, the State Department's new Energy 
Resource Governance Initiative has been launched with the aim 
to engage countries to advance governance principles, share 
best practice and encourage a level playing field.
    Domestic interventions, such as strategic reserves, 
resource mapping, R&D funding, targeted industrial policy, 
workforce development, and improved permitting processes are 
all worth exploring. Still, policy design should not be done 
with domestic blinders on.
    As you've noted, Senator Murkowski, other regions and 
countries like the European Union, Australia, Japan and others 
have all come up with their own critical minerals list.
    Finally, I applaud the Committee for robustly and 
persistently considering these issues and doing so in a 
bipartisan manner. Your deliberations and actions can lay the 
foundation for a productive engagement by the United States on 
these critical issues.
    [The prepared statement of Dr. Bazilian follows:]
    
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    The Chairman. Thank you, Dr. Bazilian, we appreciate that.
    Mr. Mills, welcome.

 STATEMENT OF MARK P. MILLS, SENIOR FELLOW, MANHATTAN INSTITUTE

    Mr. Mills. Thank you, Madam Chairman, and thank you to the 
Committee for the opportunity to testify on this matter.
    As this Committee knows, there are those who claim that the 
wind and sun could or should provide 100 percent of America's 
energy needs compared to today's 3 percent share. Setting aside 
whether such a jump in the share of wind and solar is necessary 
or even feasible, the fact is that a massive increase in clean 
energy use by the United States, especially in concert with 
other nations, will lead to the biggest expansion in global 
mining and chemical processing that the world has ever seen. 
And given the realities of America's apparent antipathy to 
mining, it would also mean a radical increase in the quantities 
and sources of import dependencies and new geopolitical risks.
    To understand why this is inevitable, we need to step back, 
perhaps, to dissect two common and misleading tropes in this 
energy debate we're having these days: the idea that wind and 
solar are free and the idea that there are renewable energy 
machines.
    First, the air and sun are no more free than our oil and 
gas. Mankind had nothing to do with creating either. In order 
to deliver useful energy to society, it's perhaps obvious, that 
all sources require access to and the use of land and all 
require construction of physical hardware that, in turn, comes 
from mined minerals. So derivatively there's no such thing as a 
renewable energy machine because all machines are built from 
non-renewable minerals and all machines wear out and must be 
replaced, creating a continual need for further mining.
    These realities are at the nub of the challenge for all 
policies that would radically increase the use of wind and 
solar machines and batteries. The path means that things people 
claim are ``dirty'' are just done elsewhere. And it means an 
astounding increase in materials use and dependencies, as this 
panel has noted.
    These realities don't come from design flaws in human 
engineering. It's important to note that they're inherent in 
the physics of energy in our universe. Per unit of useful 
energy delivered to society, whether you measure it in miles of 
travel or tons of products or gigabytes of data, the wind to 
solar battery path increases both land and material use by 
something like 500 to 1,000 percent.
    Rather than do big numbers for the globe, it's helpful to 
look at an illustrated example. The battery in a single 
electric car weighs about 1,000 pounds. Fabricating that single 
battery involves digging up, moving, processing more than 
500,000 pounds of materials somewhere on the planet.
    To deliver the same vehicle miles using oil counted over 
the same seven-year life span of a battery, that would entail 
one-tenth as much in cumulative materials extracted from the 
earth.
    It's this kind of reality, of course, that creates the 
global challenge. And we've heard from every witness in the 
introductory remarks the clean energy plans that are being 
contemplated by many nations will create demand for a wide 
range of minerals that will explode by some 200 to over 2,000 
percent.
    And as the Committee notes and as you, Madam Chairman, 
pointed out at the introduction, the United States is a minor, 
if not--and no pun intended, minor, m-i-n-o-r--or non-existent 
player in most of the materials necessary for clean energy. The 
U.S. depends on imports for over half of more than four dozen 
minerals and 20 of which we're 100 percent dependent on 
imports. The bottom line is that the kinds of global expansion 
commonly proposed for clean energy aren't sustainable and, in 
fact, might not even be possible. But to the extent that the 
train has left the station, as they say, and our nation, along 
with others, has embarked on a path to expand clean energy use, 
permit me to suggest four actions Congress might consider with 
apologies that they're all perhaps obvious because one can 
reach no other conclusions.
    At first, Congress should direct an examination and a full 
accounting of the full fuel cycle materials impacts but not 
focus so much on the impacts from using more materials for 
clean energy but, in particular, on the sources and, 
specifically, the changing structure and nature of the 
geopolitical risks. If there were a war in the Democratic 
Republic of Congo, the loss of cobalt to the world would be a 
far greater impact in that energy supply chain than the current 
attack on Saudi Arabia's oil field, in relative terms.
    Second, Congress should direct a study at the state and the 
limits of recycling in the face of such a massive increase in 
clean energy materials and flow.
    And third, Congress should consider exploring, advancing 
the funding areas of basic material science research, a 
historically and egregiously underfunded area of basic science 
where we can find new efficiencies and, in fact, where we are 
likely to find magic new alloys and new materials through 
supercomputing algorithms based on the materials genome 
project.
    And fourth, and perhaps most obviously, Congress should 
enact policies that will encourage and not impede the 
investment in development of mining in America.
    Madam Chairman, you like to use the analogy of immaculate 
conception for energy. If I might say that until engineers 
invent an element that one might call unobtanium, you know, a 
magical energy producing element that appears out of nowhere, 
requires no land, weighs nothing and emits nothing, we will 
always need mining.
    And if we're going to mine, like I think all the witnesses, 
we probably all agree that we should do it here where we can do 
it the most environmentally responsible way and where we can 
minimize geopolitical risks.
    Thank you.
    [The prepared statement of Mr. Mills follows:]
    
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    The Chairman. Thank you, Mr. Mills, you have given me a new 
word for the morning, unobtanium. I am going to ponder that 
one.
    Thank you all for your comments this morning.
    I wanted to start off by probably directing this to you, 
Dr. Bazilian.
    When you were talking about the supply chain, you were 
basically saying all aspects of the supply chain are key when 
we think about our mineral security here in this country. I 
wanted to ask, kind of, an open, generic question. Which piece 
of the supply chain do we worry most about?
    I think you suggested that it is, and I am reading my own 
notes that are probably not an accurate reflection of your 
comments, but you said it is not necessarily the dominance in 
the production but the diversity that we would have, the 
diversity of the supply and demand that creates that 
resilience. So it is not just about making sure that we are 
dominating the field but that we have greater diversity.
    In terms of the supply chain and recognizing the key 
aspects there, is there one part of the supply chain that you 
are worried most about now and does that change going forward 
as you think about the need for diversity within the supply 
chain?
    Dr. Bazilian. Thank you, Senator, for the easy question.
    You know, if you look at China's dominance which has been 
brought up several times here this morning about across the 
supply chain in terms of a value add to their economy, you'll 
see that the added value in the manufacturing sector from 
processing to advanced manufacturing is larger than the funds 
that they're getting from mining itself, so, on the direct 
supply side. And so, they've put some effort into making sure 
that they're very strong on parts of the supply chain further 
down from processing to advanced manufacturing. So I think that 
that gives us one clue that that's one way to highlight which 
parts of that supply chain are important.
    The aspects of diversity make this, as you know, a very 
difficult task. We can look at oil and gas as a precedent for 
how to think about diversity of supplies and functioning 
markets, but if we're trying to do that across 10 or 20, or 30, 
or 50 different minerals it becomes very difficult.
    And so, I think we have to keep that in mind that each one 
of these has very different context, very different supply 
chain, very different markets and most of those markets don't 
function in the way we understand them to function. Say, like 
the oil market is apparently functioning today. So the 
diversity is important but the complexity of this area makes it 
such that it's hard to draw specific lessons like that.
    The Chairman. Let me go to you, Mr. Kang, because when we 
think about what we have all acknowledged is going to be just 
an ever increasing demand and a recognition that we are going 
to be looking at significant additional mining whether it is 
here in this country or around the world, your focus on the 
recycling aspect of it, most of the global recycling taking 
place in Asia. Your very constructive suggestions that what we 
need to be doing here, one of the first steps is we need to be 
collecting more. We need to be expanding our capacity rather 
than doing the reprocessing elsewhere.
    What is it here in this country that we can't seem to be 
recycling much of anything? I mean, we are all in a panic now 
because China is no longer accepting the recycled product, 
everything from cardboard to, you know, pretty basic things, to 
more high-tech and certainly more critical initiatives. Do we 
just want to make it here and we don't care about the back end 
of it? What more can we be doing on this?
    Again, I think you have given us a couple of specifics. I 
like the Opportunity Zone idea in terms of encouraging more. 
But what can we be doing there, because I think that is going 
to be a critical part of how we move forward here?
    Mr. Kang. Senator, that's a great question, and I think 
something that we think about constantly as we are looking to 
grow our supply to recycle and produce these minerals.
    I think, you know, what's interesting is, as you mentioned, 
recycling. Most of the world's recycling of lithium-ion 
batteries resides in Asia where most of the batteries are 
manufactured. I think those two are tied together.
    When you have, you know, one aspect of recycling that I 
think is very important is that manufacturing scrap can also be 
recycled. The manufacturers that produce the batteries produce 
scrap which is very high and rich in these minerals. And so, 
when you put that back into the refining process, that helps 
this process be very economically viable.
    And then, when you have access to the raw materials you 
have other aspects of the battery manufacturing, precursor 
manufacturing or cathode material that will naturally just 
locate next to the recycling.
    So, a couple things. One, I believe that if we can promote 
our recycling here in the United States by really emphasizing 
and focusing on collection, creating the supply of batteries. 
You know, one way we have been working on is to create a 
curbside collection. You know, minimize the difficulty in 
taking your batteries and taking them to locations, drop-off 
centers.
    I sheepishly will admit, I have many phones and gadgets in 
my drawers at home that I have not thought of or don't have the 
time to prepare to take to these drop-off locations.
    The Chairman. But if we have these drop-off locations, and 
my time is expired, we still are sending them overseas.
    Mr. Kang. That's correct.
    The Chairman. We are collecting them. We need to do a 
better job of collecting them, but at the end of the day we are 
still sending them to others.
    Mr. Kang. Well, if you create that supply, yes. And then we 
can create this recycling industry here. I think that will be a 
first step in the problem.
    The Chairman. Thank you.
    Senator Manchin.
    Senator Manchin. Madam Chairman, my dear friend from Maine 
has to go to another committee meeting and I want to go ahead 
and defer to him at this time.
    The Chairman. Very good.
    Senator King.
    Senator King. Thank you, Senator. Ironically, the hearing I 
have to go to is on China, so it seems to be a constant 
refrain.
    Mr. Simmons, in the Department are there specific programs, 
offices, personnel assigned to deal with this problem in terms 
of recycling and mining and those kinds of things? In other 
words, you expressed general support, which I appreciate, but 
is there somebody who wakes up every morning thinking this is 
something we have to deal with?
    Mr. Simmons. Yes, there are.
    One, first of all, there are multiple people that are in 
the Office of Energy Efficiency and Renewable Energy that work 
on critical minerals. It's not a very big team, but we do have 
multiple people.
    You also have the Critical Materials Institute and much of 
that focus, well, really that focus for, you know, funding of 
$25 million a year is exactly on this issue.
    So the Office of Science, I just found this out recently, 
they're going to have a new initiative on critical minerals 
starting in FY20. They have been doing research for a long time 
but a renewed focus on some of the basic science of, as Mr. 
Mills mentioned, to advance what is possible, so.
    Senator King. I would urge you to think about how to 
structure that so that it really does have a serious focus. One 
of my principles is structure, is policy, and if you have a 
messy, confused structure, you are going to have a messy, 
confused policy. So I commend the work that is being done, but 
let's see if we can focus it more precisely.
    Mr. Simmons. We are working on that exact issue because 
this issue is difficult, it is complex. It is far reaching and 
we need to figure out a nice, cohesive strategy that makes 
sense. So we're working on that.
    Senator King. Thank you very much.
    Ms. Carlson, have we already lost? Have we already lost 
this fight? Have the Chinese already cornered the market?
    I mean, I think you said 50 percent of cobalt in Africa and 
some other areas. What do we do?
    And none of you have testified specifically about which of 
these--are there cobalt deposits here? There has been some 
allusion to how hard it is to mine here, but let's assume that 
mining had a better reputation. Are the minerals here? Do they 
exist here, these various minerals?
    Ms. Carlson. Thank you for the question.
    No, I would not say that we've lost the race, and I do 
think there are a number of avenues for additional, sustainable 
production of resources, but as well as the supply chain, the 
recycling and investment in materials, R&D, that I believe each 
one of the panelists mentioned.
    I think one of the tricky aspects of cobalt, in particular, 
is that it's a byproduct of copper and nickel mining. And so, 
it's subject----
    Senator King. We have plenty of copper mining or there used 
to be anyway in the U.S. So, does that mean we have cobalt?
    Ms. Carlson. And so----
    Senator King. In Jerome, Arizona?
    Ms. Carlson. And so, it depends on whether or not it's 
economically extractable.
    And so, given the fact that it's a byproduct, there are 
fluctuations in the market and cobalt is subject to those 
fluctuations.
    And so, and as a consequence as well, cobalt, more so 
lithium, isn't traded as widely on global commodity markets, 
and in the case of lithium, it is a specialty chemical and ends 
up being contracted more directly.
    There are opportunities and resources in this country, but 
largely speaking, they tend to be highly, highly concentrated 
in countries around the world. I think, given that 
concentration, it's important to evaluate partnerships and 
investment.
    Senator King. One of the problems, it seems to me, not to 
interrupt, but one of the problems--I guess I did interrupt----
    [Laughter.]
    ----is that China is China, Inc. We talk about mining 
companies whether they can get investments and whether it pays 
back and what the rate of return is. China has decided, 
apparently as a matter of national governmental policy, that 
this is important.
    And so, the normal rules of the road of capitalism are not 
necessarily applying here if it is a government-owned entity 
and that is something we really need to think about. If we are 
assuming the private sector is going to open a mine in the 
Congo that may or may not be sustainable, economically, China 
doesn't necessarily care about that. I think that is a problem 
we need to identify.
    One more question before my time runs out.
    Mr. Kang, what percentage of the need could be met by 
recycling if we had a much stronger and more thorough going 
recycling program? We have an awful lot of batteries in this 
country.
    Mr. Kang. Absolutely.
    When you look at the projections of production of batteries 
in the future, they are outrageously enormous. And so, and then 
when you take it to the collection rates now and recycling, you 
know, I've heard estimates that anywhere from about 20 to 30 
percent of the world's mineral needs can be met by recycling.
    Senator King. Well, that is not insignificant. I mean, that 
is a big number.
    Mr. Kang. That's not insignificant, absolutely.
    And actually, it's reclaiming value from our waste stream.
    Senator King. Right.
    Mr. Kang. You know, one way to think about this is if you 
could change your perspective, I believe, you know, one of the 
next new mines of the future are urban cities, our homes. We 
have these, this material, locked away in our drawers and in 
boxes that we don't look at too often.
    So if we can promote collection, if we can take these, kind 
of, you know, spent batteries away from or bring them back to 
this industry, I think we can claim a significant amount of 
minerals.
    Senator King. One way to incent, I mean, the classic way we 
incent things is by a bounty or by a payment of some kind. If 
it is worth a few bucks that would be, maybe it would be enough 
to stimulate somebody to bring them in?
    Mr. Kang. Absolutely, absolutely, Senator.
    One other thing I'll add, I think that we should be very 
mindful of is it's not only this Committee or those who are 
interested in recycling that see the value of recycling, but we 
are well aware of foreign entities now that are coming into the 
U.S. and setting up recycling facilities here because they see 
these minerals and it's widely known that the U.S. is one of 
the largest producers of spent lithium-ion batteries.
    Senator King. They are mining under our very noses.
    Mr. Kang. Yes, sir.
    Senator King. And a domestic resource.
    Mr. Kang. Yes, sir.
    Senator King. Ridiculous.
    Thank you.
    The Chairman. Who is it?
    Mr. Kang. Well, I do know that there is a Korean company 
that is coming in. There's a Canadian company that's setting up 
facilities here as well as we are aware of conversations and 
research by Chinese firms, recyclers, who are coming into this 
market.
    The Chairman. Senator McSally.
    Senator McSally. Thank you, Chairman Murkowski, Ranking 
Member Manchin, for holding this really important hearing as we 
talk about the link between green energy technology and mining.
    In Arizona, actually I was just recently in Jerome a few 
weeks ago, but in Arizona we are a mining state, especially 
copper. We are known--it is one of our five Cs--known as the 
Copper State. We produce 65 percent of America's copper, far 
more than any other state. Mining across Arizona generates $4 
billion and 44,000 jobs.
    So generating, transmitting, and storing electricity from 
any source requires literally tons of raw and refined material, 
as you all know. For example, there are 5.5 tons of copper used 
per megawatt-hour inside photovoltaic systems.
    The rising demand for clean energy technologies like wind 
and solar combined with the continued electrification of our 
transportation sector means that there is going to be a surging 
demand for copper and other minerals as well.
    Despite this clear link though between rapid deployment of 
clean energy and responsible sourced raw materials, we still 
see extreme environmental groups continuing to try and kill off 
the American mining industry through litigation and organized 
opposition. But just because there is an activist judge or an 
environmental group that gets an American mine shut down 
doesn't mean the demand for raw material decreases. Instead, 
the void is filled by other countries, often those with dismal 
records like China and the DRC.
    So, just for others, remember if you oppose American 
mining, you are likely to just be making the rest of the planet 
and environmental problems even worse. If you care about clean 
energy, you should care about mining. In fact, I don't see a 
mining plan anywhere in the ``Green Bad Deal'' that has been 
proposed. If you really care about moving toward green energy, 
then it needs to include mining.
    Anyway, so any serious plan should have been part of the 
conversation that we have had today. I am glad I joined the 
Chairman and the Ranking Member and Senator Sullivan in 
introducing the American Mineral Security Act of 2019 which 
addresses this core issue that we are talking about here today.
    I want to start off with Dr. Bazilian. For clean energy 
technologies, there is a lot of discussion here about rare 
earth elements, but can you also share why we should be 
concerned about the supply of base metals, especially copper?
    Dr. Bazilian. Thank you very much, Senator.
    My second point was that this narrative is a very powerful 
one for the mining industry which you have also said and in the 
mining industry the most sophisticated approach to it has come 
from the Copper Alliance, the International Copper Alliance and 
the domestic.
    And of course, as you said, they have a good reason to be 
excited about this clean energy future, not only for the 
reasons you stated, but also if you want to have an air 
conditioner or a motor, you roughly need copper. So they have a 
very positive outlook on this. And what they're doing in their 
approach is not only going out with the positive optics and the 
good narrative, but also discussing the recyclability of 
copper. And so I think the base metals such as copper have a 
great role to play.
    The other ones in photovoltaics, you need a lot of silver 
so there's likely to be a growth in the silver market. That 
market is better than some of these minor metals, and so it's 
probably able to handle that growth better than some of the 
small ones.
    But it's just to say that while we focus on these specific 
minor metals and the conversation is dominating by cathode 
material for batteries, there are quite a lot of other minerals 
and some of those secondary and tertiary ones are really hard 
to get to from an investment perspective. But I do think we 
have to look across all of them, but I really appreciate your 
comment.
    Senator McSally. Great, thank you.
    I want to turn to the national security implications.
    My last assignment in the military was standing up U.S. 
Africa command. And what we saw, this was 2007 to 2010, was 
China systematically going into African countries in order to 
just steal their resources and with no benefit to the country. 
Certainly no environmental concerns or concerns for the well-
being of those who live in the countries.
    They are doing what they said they were going to do. If you 
look at their ``Made in China 2025'' and what their plan is, 
specifically, in this sector, this is no surprise. There is no, 
sort of, top secret. China is doing exactly what they said they 
were going to do in this area.
    In fact, it was reported earlier this year that the Chinese 
government was considering restricting refined rare earth 
elements to the United States which should wake people up that 
they look at this also, not just economically but as a 
geopolitical tool or a geopolitical weapon.
    Ms. Carlson, can you share more perspective on the national 
security implications of what we are talking about today?
    Ms. Carlson. Thank you for the question.
    I think it is certainly an issue of rare earth elements but 
it also applies to other critical minerals and metals as well, 
not only in Africa but other regions of the world and their 
efforts ongoing as countries recognize the strategic nature of 
those metals for their countries and interest in developing 
their local economy and understanding how critical those 
sectors are to the development of their local industry, to the 
number of jobs provided, and there's increased restriction on 
the export of those minerals as well as changing taxing 
structures, et cetera. And so, even within a couple days ago 
there were discussions of export restrictions for nickel from 
Indonesia, both primary and refined nickel coming out of 
Indonesia, which is also very important.
    So I think that just underscores the importance of the need 
for both diversification of materials and investment in supply 
chains for alternatives, research and development upstream and 
then the recycling networks and systems that we've been talking 
about.
    Senator McSally. Great, thanks.
    In summary, my view is if we care about national security, 
if we care about green technologies, if we care about American 
jobs, then we should be pro-mining in America.
    Thank you, Ms. Chairman.
    The Chairman. Senator McSally, thank you.
    Senator Manchin.
    Senator Manchin. Thank you, Madam Chairman.
    I am trying to break this down to understand this as 
Americans. We recycle about 90 percent of the car batteries 
that we use. And it makes sense, I mean, you get $10.00, 
usually, a core charge. You bring it back and it is big and 
heavy and bulky. You don't want it laying around your house.
    And then when I grew up, we used to recycle pop bottles at 
$0.02 apiece.
    The Chairman. $0.10?
    [Laughter.]
    Senator Manchin. Well, it was $0.02 when I got started. 
Anyway, we did pretty good on that. I keep thinking about that. 
We have three billion a year of the disposable batteries we use 
in our flashlights or our little, you know, and we don't do 
anything with them. We just throw them away.
    And then now, all the new age we have coming in with cars 
and wind power and solar power, home to big storage batteries. 
We are not doing any of that, like throw away cars now. Is that 
the way they look at it? I mean, can an average person that 
owns an electric car change that battery?
    There has to be something that we do here because I keep 
thinking of all my environmental friends who are rightfully 
right on top and looking at everything that we do, and coal 
mining is something that is scrutinized every minute of every 
day of how it is done. The energy that it has produced, the 
steel that it has produced. The ability for us to win every war 
we have been in because of our own energy supply.
    But when we talk about clean energy, you are telling me 
that clean energy is the dirtiest form of energy we have, right 
now what it takes to produce what we look at as clean. So I 
guess, out of sight, out of mind for Americans. We are happy 
with that as long as someone else is using child labor and 
doing the dirty work.
    Sooner or later our environmental friends have to step to 
the front and push this. It won't be pushed unless we pass some 
legislation on mandatory recycling. If you make that battery, 
you are responsible for it if you are a car manufacturer that 
has to be using it. Would that cut down a great deal on the 
amount of mining that is needed to be done for these rare earth 
minerals? Is there enough that we can extract from recycling to 
really change a whole boom?
    And I would think that you have a little bit of an 
incentive. A financial incentive goes a long way in Americans 
habits.
    So Mr. Kang, you might want to respond since you are in 
this business.
    Mr. Kang. Sir, again, I would say that recycling is one 
answer to meet the demands that we see in the future. I believe 
that by having a robust collection system and a vibrant 
recycling industry, we not only will meet the national security 
issues that we're discussing here today, but we'll also be, as 
you mentioned, taking care of a hazardous problem where these--
--
    Senator Manchin. Who changes the car batteries right now? 
If I have an electric car--I know my good friend, the Senator 
from New Mexico here, Senator Heinrich, has a beautiful little 
electric car and so does Senator King. Who is going to change 
their battery?
    Mr. Kang. It is the automobile manufacturer, when it's 
under warranty.
    Senator Manchin. So.
    Mr. Kang. When it's under warranty.
    So let's think about----
    Senator Manchin. How about when it is not under warranty or 
it goes dead?
    Mr. Kang. Well, then you have mechanics and, you know, 
automobile shops that would----
    Senator Manchin. It would be hard for Senator Heinrich to 
do it himself.
    Mr. Kang. Absolutely, that's correct.
    Senator Manchin. Okay.
    How about in the house if I have solar panels--and those 
are pretty good, heavy-sized batteries--would I, am I capable 
of doing the replacement or do I usually have a contract with 
the company that services that?
    Mr. Kang. Correct, I would believe, sir.
    Senator Manchin. So you already have a built-in mechanism 
for those people to have 100 percent recycling, correct?
    Mr. Kang. If we can utilize the infrastructures that are in 
place today, the service contractors that install and can 
remove.
    Senator Manchin. Yes.
    Mr. Kang. Also, the waste management.
    Senator Manchin. But there are no laws whatsoever that 
mandate that we recycle these?
    Mr. Kang. I'm sorry?
    Senator Manchin. How are they disposing of this? In 
landfills?
    Mr. Kang. Currently, yes.
    Senator Manchin. Does the car go the landfill or just the 
battery in the car?
    Mr. Kang. Well, there are conversations today from 
automobile manufacturers looking at the end of life of these 
electric vehicle batteries. I think they are coming together, 
again, because it's also a collection issue and how to 
streamline these.
    But again, we need to invest into the recycling industry to 
create a solution for these batteries to be taken care of. And 
so, if we can, if this Committee can work on incentivizing this 
industry, I will tell you, it's, for the past several years the 
conversation has definitely changed in terms of investing into 
the recycling of lithium-ion batteries. But it has been 
difficult.
    I do know, I watched the testimony in a hearing prior to 
this one and I believe it was, there was some information that 
recycling of lithium-ion batteries is not an economically 
viable industry. And I would say that it is, actually, for our 
company. And we see the value there, and we can find value.
    So the technology is there. The industry can thrive and we 
need it, we need the industry.
    Senator Manchin. Mr. Mills, very quickly.
    You made some comments earlier I was interested in as far 
as where we are getting, how we are sourcing what we are doing, 
what our mineral state may be.
    Do you have anything you want to add to that?
    Mr. Mills. Well, I think I would just remind the Committee 
of the scale issue we're talking about.
    So recycling cell phone batteries, you know, it's 400 
million cell phones, a billion, I think, now a year sold but 
the scale involved in storing energy in automobiles and grids 
is, to use the overused word, astronomically greater. So the 
challenge is not just that one could recycle. Recycling has 
limits. They're economic. They're practical. They're physical. 
We should do more.
    Senator Manchin. Let me ask this question.
    Is the environmental community and really--and I have some 
great friends and they bring it to our attention, they come and 
see our office and tell us what is going on. This is the first 
time I have heard of the amount of social changes and basically 
things that we thought we eliminated 50 years or more ago, 
child labor.
    Mr. Mills. Sure.
    Senator Manchin. Environmental laws, you know, and we are 
letting the Congo and everybody else just run rampant on this. 
Has it not been brought to their attention? Do they not see it 
along those lines?
    Mr. Mills. Sure. There's a lot of--the Washington Post did 
an outstanding expose on the cobalt issue.
    There are some good investigative journalists still in the 
world, despite the shallots of the industry. And when you look 
at the supply chain, both in environmental terms and in labor 
terms, most countries are not as sensitive to doing it right, 
as we are. Most of the mining is migrating there. A lot of the 
nickel in the world is produced in Russia.
    I worked for a mining company in Canada earlier in my 
career. I may be the only person in this room, perhaps, that's 
been at the bottom of a 5,000-foot, vertical, hard rock shaft. 
We mined silver, gold and uranium. And it was very much 
involved in the reclamation and the, you know, environmental 
processes.
    But we don't, in the West and in Europe in particular, want 
to mine anymore. I mean, when I said there's an antipathy to 
it, that's what I find, not just in the environmental 
community, but among my colleagues, both conservative and 
liberal. They don't think we should mine in America.
    Well, my position is that the world, with or without more 
clean energy, is going to need a lot more mined materials.
    To the Senator from Arizona's point, it doesn't matter 
whether it's an air conditioner or motor, you need copper. 
You're going to need nickel, steel, aluminum. Electric cars use 
more aluminum because you have to get them lighter because the 
batteries are heavy. They use more nickel. They use more common 
materials. Windmills use steel. We want iron ore to come from 
someplace other than Minnesota.
    I think these challenges of bringing it back here are 
addressable, but we have to mount a campaign that says, look, 
we could use automation, modern technologies and monitoring to 
do mining very safely. The automation reduces the labor but it 
actually increases the labor here because it will bring the 
mining back here.
    Senator Manchin. Thank you, Madam Chairman.
    The Chairman. Senator Cassidy.
    Senator Cassidy. I am not sure to whom to address this, but 
I will open it up.
    It is a different form of recycling. I was speaking to some 
folks in Louisiana who have a lot of bauxite that has been used 
to create aluminum. They say they can extract rare earth from 
this bauxite. It is just sitting there and tons of it.
    Now on one, maybe two occasions they have come up with a 
business plan where somebody would come in and take this and 
get maybe scandium or something. And both times, or at least 
the one time for sure, that they were about to go, the week 
before the Chinese cut their price dramatically and the 
business model was destroyed. Clearly a market manipulation.
    So I guess, this is just a wasted resource. It is not 
breaking new ground. It is taking that which is there. But it 
would require us to somehow give a price support in case the 
Chinese did that once more.
    I am not quite sure how that would work, but I open that up 
because it does seem to be, if there is a lot of residue from 
copper mining in New Mexico, it seems like you could 
concentrate rare earth or not so rare earth out of that 
residue. But then again, it would still be susceptible to 
people coming in and cutting the price.
    Any thoughts from anybody as to how to approach this issue?
    Mr. Kang, you seem to----
    Mr. Kang. Yes, sir.
    Senator, I'm not familiar deeply with rare earth materials 
but I can share with you, from a lithium-ion battery 
perspective that manufacturers of consumer products today are 
very interested in closing their loop. So, you know, they've 
spent their time before just selling their products. Now, 
because of the supply chain issue, they are trying to reclaim 
their products, to bring them back so that they can ensure 
their own supply of raw materials for their future production. 
So in my thinking, I believe that it is, again, this solves 
another issue, a supply chain issue for manufacturers.
    Senator Cassidy. But I guess my specific question is, if it 
is susceptible to market manipulation by somebody cutting the 
price?
    Dr. Bazilian.
    Dr. Bazilian. Yes, as I said, Senator, these markets are 
not markets in the way we conceive of them. They are opaque and 
there's no price discovery in the way we would say, use an 
analogy for something like oil or natural gas. And if you think 
of rare earths, there's on the order of 15 of them, each one of 
them is supposed to have a specific pricing. That price that 
you see or you can find somehow is garbage.
    Senator Cassidy. So what you're really telling us is that 
we perhaps need an industrial policy or at least some sort of 
price support for that to have a domestic production from used 
bauxite we're going to guarantee a price. If it goes above it, 
you get it, but if not, we will smooth out the valley, if you 
will.
    Dr. Bazilian. I think there's every reason to consider 
industrial policy. Whether or not you want to put collars and 
caps on to pricing for commodities is a different story.
    Senator Cassidy. Except you could not support, you cannot 
support the harvesting, if you will, of a rare earth from 
residue unless you have some sort of business model which 
guarantees a return.
    Dr. Bazilian. That's correct.
    So, if we're in a private sector situation as we are in the 
United States with markets, it's very difficult without some 
sort of pricing instrument to give the signal to invest in 
these things, keeping in mind that bauxite is just one 
opportunity.
    Senator Cassidy. Yes.
    Dr. Bazilian. There's a mine open today with light rare 
earths in Mountain Pass, California, and there's, to the other 
Senator's point, there's cobalt all over. There's cobalt in 
Idaho, et cetera, and then in Wyoming and West Virginia.
    Senator Cassidy. Well, this sidesteps what Mr. Mills talks 
about. People don't want mining here.
    Dr. Bazilian. Right.
    Senator Cassidy. This is just sitting by the side of the 
Mississippi River. And so, it has been mined.
    Mr. Mills?
    Mr. Mills. Well, we should be clear that people don't want 
mining or, particularly, the processing, the chemical 
processing associated with mining. So there's two parts to 
this. And I'm sure you're intimately familiar.
    Senator Cassidy. But on the other hand, is if we are 
already processing the bauxite to make alumina, we actually 
have the processing which is currently occurring. So it is co-
located, if you will.
    Mr. Mills. Well, no, but the problem is, rare earths in 
particular, are chemically similar, very difficult to separate. 
So they involve much more difficult environmental processes 
that are difficult to permit here. So there's two sides to 
this. If you're a private sector investor and you look at the 
hurdles you have to go through to get state and federal permits 
to do that kind of chemical process----
    Senator Cassidy. So, let me just move on.
    Mr. Mills. It's a huge barrier.
    Senator Cassidy. It is not so much I am concerned about 
that. Let's assume you can get the permits but it does seem as 
if you would have to have some sort of price support in case a 
market manipulator attempted to cut your feet out from beneath 
you.
    Mr. Mills. The challenge is proving to Morgan's point, to 
Dr. Bazilian's point, the challenge of this market is that it's 
quite opaque. I doubt you can prove market manipulation because 
there's so few players, with so little market transparency and 
almost, probably half of the minerals that are traded.
    Senator Cassidy. Thank you all.
    The Chairman. Interesting, thank you.
    Senator Heinrich.
    And before we turn to Senator Heinrich, Senator Risch had 
to be called away, but he asked that his statement be included 
as part of today's Committee record.
    [The prepared statement of Senator Risch follows.]
    
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    The Chairman. Senator Heinrich.
    Senator Heinrich. Thank you, and I want to thank you for 
holding this hearing. I think it's very important policy 
questions and, as somebody who grew up visiting my grandfather 
at mines across Nevada, places like Battle Mountain and others, 
where he worked and whose father worked for Anaconda Copper in 
exploration.
    I think one of the challenges we have is, as a first world 
nation we set a pretty good standard for mining labor because 
we had strong labor unions in this country, we didn't look at 
the other policies along the way. And we have a pretty strong 
hangover in this country from not addressing the other policies 
around mining.
    We have a proposed mine right now outside of Santa Fe in an 
area that provides an enormous amount of recreational outdoor 
economic activity. And because it is permissive, there is no 
consideration for that in the policy whatsoever. We have a 150-
year-old law. I think if we are going to create an environment 
where more mines can move forward, it is going to need to be as 
part of updating our mining law.
    Today, and Senator Manchin knows this very well, if you 
want to mine federal hard rock minerals, unlike coal, you pay 
no royalties to the American people, even though those hard 
rock minerals are, theoretically, owned by the American people.
    A bigger concern to many of my constituents is the 
incredible legacy of uncleaned-up mines across the West. There 
are thousands of them.
    A few years ago, during the Gold King Mine spill irrigators 
had to close off their ditches, not water their crops, not 
water their livestock. There were municipal and tribal impacts 
as huge amounts of released heavy metals came downstream 
because of the uncleaned-up legacy of 150 years of abandoned 
mines all across the mountain West.
    So I think if we are going to create a path forward, one of 
the things we need to do is really think about reforming the 
1872 Mining Law if we are going to create the environment where 
some of these other things can move forward in a first world 
country.
    I want to go back to recycling real quick. I will start 
with you, Secretary Simmons.
    One of the things I am interested in is even before you do 
what Mr. Kang is doing in terms of recycling lithium-ion, there 
is a process of repurposing a number of the EV cells, in 
particular, who don't have the juice, forgive me, to 
necessarily be used in the transportation sector but they still 
have enough life to be used in a stationary form, either 
providing grid services like frequency regulation or voltage 
support. What is DOE doing to look at that business model and 
find ways to do a two-step recycle where you do EV batteries, 
to stationary applications, to the kind of recycling that Mr. 
Kang does?
    Mr. Simmons. So we are looking at exactly that and to 
understand what is required and what the values are for some of 
these secondary uses so that we understand, so that we don't 
need to necessarily recycle if that product has a useful life.
    Some of the research that we have funded has found that, I 
believe, it's about $25 per kilowatt-hour. If it is worth that, 
then it makes sense to turn it into these, like, these 
secondary uses such as stationary sources.
    So this is an important area for us because those batteries 
can be very inexpensive. And then from there we are working on 
the recycling technologies to be able to recycle them very 
efficiently as well as collection technologies to make sure 
that we do a good job collecting these batteries and getting 
them to, well, so that we're collecting more than five percent 
which is where we currently are. There's much work to be done 
there.
    Senator Heinrich. Mr. Kang, if you could write a recycling 
bill what would it look like? How much would be policy? How 
much would be incentives? How much would be building the 
infrastructure of collection that you talked about?
    Mr. Kang. My goodness, Senator, I think it would be all of 
the above. I think we really need to encourage development at 
every level of the recycling industry, again, the collection, 
the processing and refining so that the metals can be put back 
into manufacturing of new batteries.
    I think, you know, a lot of the ideas that we've discussed 
today regarding incentivizing companies to come into this 
market. I'll tell you, as we've been speaking and trying to 
create a state-wide collection program, it's the dollars that 
are getting in the way of making this happen. The state 
realizes this is a need that we need to address.
    One thing that I'm sure all of us have heard about is when 
batteries are collected, they get into our waste streams. They 
cause problems for other recyclers and for our waste 
municipalities. So it's a serious issue that needs development 
in all areas.
    Senator Heinrich. Thank you.
    The Chairman. Senator Cortez Masto.
    Senator Cortez Masto. Thank you. Thank you, also, for this 
great conversation today.
    As somebody who is from Nevada, it is a very proud mining 
state, I do think that we can find that balance between 
extraction and environmental protection. Nevada is a perfect 
example--not only is it a mining state but we really have led 
in the growth of renewable energy in the State of Nevada from 
solar, wind and geothermal.
    I know there are many mining companies in Nevada now who, 
and I have visited with them, who literally look at how they 
can sustain the environment while they are engaging in the 
extraction at the same time. It can be done. And I think this 
conversation shows that we have a lot of work ahead of us.
    But here is the thing, and I think this is my concern, that 
I am hearing from you. And I so appreciate the Chairwoman in 
bringing this forward. If we do not do something about this 
when it comes to our critical minerals from the extraction to 
the processing, the manufacturing and the end, all of it and 
recycling, we are going to be behind when it comes to an 
economic advantage for not only this country but around the 
world. And we hear this. This is now our time. This is really 
our call to action to recognize something is happening here.
    The other thing I want to say. There has been this 
discussion over battery storage and batteries and recycling. I 
think, and I am curious about the panel, what you think, but we 
are only at the beginning stages of the technology when it 
comes to battery storage and what it is going to look like.
    I think technology is growing at such an exponential growth 
that it is going to change what we are talking about today as a 
car battery. You just have to look at history and as we have 
seen technology and where it is taking us now.
    I think if we don't incentivize it, if we don't start 
embracing this technology and growing with it, we are going to 
be left behind. That is what I am hearing from all of you.
    But there is one piece that we have not talked about today, 
and let me jump into that very quickly because let me highlight 
in Nevada, Lithium America is pursuing the largest known 
lithium resource in the United States. It is the only lithium 
mining that I am aware of that is occurring in the United 
States. But the President and CEO was here. He testified, 
Thacker Pass, in Northern Nevada, he talked about it has the 
potential to produce enough lithium to fulfill 25 percent of 
the world's demand. But the President shared his concerns about 
the limited pool of technical professionals available to fill 
the roughly 300 permanent positions a mine the size of Thacker 
Pass would require.
    I know, Mr. Simmons, you noted in your written testimony 
that the Department of Commerce issued its federal strategy to 
ensure secure and reliable supplies of critical minerals in 
response to Executive Order 13817. And among the strategy's six 
calls to action is growing the American critical minerals 
workforce.
    So I want to open this up to the panel, but I will start 
with you, Mr. Simmons. What are you hearing? What are the 
concerns? And what should we be considering? And what do we 
need to do to be building and working along with everything 
we've talked about, that building that strong pool of technical 
professionals to support more domestic critical mineral 
production?
    Mr. Simmons. Well, the first thing that I think that we 
need is for the jobs to be here. Currently, the jobs are not 
here in many ways. As we have more job opportunities, I think 
that that then incentivizes more people to look to, you know, 
people look at mining as technology of the past. And I think 
that that is incorrect.
    The Colorado School of Mines is a great college and I'm 
sure that Dr. Bazilian will have some additional impact, but 
the first thing that we need is for the possibility of jobs and 
for these jobs is to be seen as jobs of tomorrow as opposed to, 
you know, jobs of the 1860s. And that's the first key. And the 
Administration is working, well, working across the 
Administration to provide technical support and training to 
hopefully move us forward.
    Senator Cortez Masto. Please, I open it up to the panel 
because I think part of it is, yes, creating the jobs. But if 
we don't have that skilled workforce, and that is what I am 
hearing is part of the problem as well. The jobs may be there, 
but if we don't have the people that have the skills necessary 
for those jobs we are still going to be left behind.
    So I am curious if there are any ideas that we should be 
looking at how we build that skilled workforce.
    Dr. Bazilian. Thank you, Senator.
    Yes, we, as one of the best mining and mining engineering 
departments in the world, we think about workforce development 
of our students every day. And that is both the education of 
undergraduates as well as providing research opportunities at 
further stages of their career.
    And as Secretary Simmons has said, we have the--we 
partially run the Critical Materials Institute outside of the 
School of Mines with Ames Laboratory. But inside what we're 
trying, what we're seeing is if we can tie the education to 
this attractive new narrative. In other words, if the young 
people see an attractive narrative, like Foundational for the 
Clean Energy Future or the Energy Transition as something they 
will participate in, support and drive forward, then it will be 
much easier to grow our numbers in the mining department as 
opposed to things like quantum physics and other areas of the 
university which are growing even faster.
    Senator Cortez Masto. Right. Sure.
    Mr. Simmons. May I add to what I said previously?
    Earlier this year I visited the Colorado School of Mines, 
and one of the things that I was very excited about when I was 
there is a new program that the Colorado School of Mines is 
doing with the National Renewable Energy Laboratory. I mean, 
they're both in Golden, Colorado.
    The teaming up of mines and NREL, I think, is a fantastic 
opportunity that we are bringing together the expertise of the 
national labs and in this particular situation, educating 
students, educating some of these very smart people of tomorrow 
to advance clean energy technologies and mining technologies at 
the same time.
    Senator Cortez Masto. Thank you.
    I notice my time is up. I didn't know if, Mr. Mills, you 
wanted to say a few words.
    Mr. Mills. Well, I could add a quick comment that I agree 
with your concern. It's the right one.
    And Dr. Bazilian's point about connecting the narratives 
really relates to my not entirely facetious comment about 
unobtanium. As people understand the devices they like, 
computing and the internet and everything that we talked about 
begins with mining, requires mining. Processing and 
manufacturing, it's an integrated ecosystem. And it's poorly 
appreciated, poorly taught from K through college. And so, 
there are constructive things one can do there. They're not 
obvious so there's no simple thing.
    But the interesting part is that the kinds of technologies 
that can now be used to mine and the kinds of jobs that can be 
created and manner of training are all now subject to, 
essentially, revolutionary transformations because of things 
like artificial reality, virtual reality, because of new 
teaching tools and techniques, both for the skilled trades, the 
so-called, I like Mike Rowes' phrase, ``Dirty Jobs.'' These 
dirty jobs are not as dirty as they used to be. They're dirty 
in the sense that they're not, you know, typing at a word 
processor.
    There's a, I think, there's a potential to create 
excitement about them. If you create excitement by virtue of 
awareness and we collaterally make it easier and, I say this 
again, sort of obvious, you have to make it easier without 
being lax for businesses to decide to invest in mining here.
    It is very difficult to open a mine in America. It's just a 
fact. It's much easier to open a mine in my homeland, where I 
grew up, in Canada. Canadians are very environmentally 
conscious, but you can open a mine far more easily there.
    Senator Cortez Masto. Okay, thank you.
    The Chairman. Thank you.
    Senator Stabenow.
    Senator Stabenow. Well, thank you, Madam Chair.
    I want to thank you for the hearing and your focus on this 
which is a really critical issue, and I also really appreciate 
the discussion on recycling. I think this is an area where we 
have a lot of opportunity.
    Mr. Kang, thank you, as I am thinking of my own house and 
how many cell phones and things that I have in my own house 
that----
    The Chairman. I was actually thinking about here in 
Congress.
    Senator Stabenow. Yes. Absolutely.
    The Chairman. I mean, do we recycle any of this stuff? We 
are working on that so we can have a Committee letter going 
out.
    Senator Stabenow. Yes, good.
    Well, please count me in on working with you. I think this 
is incredibly important.
    I also want to reiterate, Senator Cortez Masto, just in the 
sense, broadly, that we are America and we can do anything we 
decide to do. Right? If we are focused.
    China is getting ahead of us not only on the things we 
consider dirty energy, but on clean energy now, way ahead of us 
because they are focused. We know they use different economic 
models, obviously. But they are laser focused, and we need to 
be laser focused if we, in fact, are going to do what we need 
to do which means we have to pay attention to the raw 
materials.
    So there is no question that dependence on foreign sources 
of critical minerals is a danger to our economy and national 
security. And we don't have to do that. I mean, it is 
complicated, sure. But if we are focused on it, we can address 
this. Also, as all the witnesses have said, support the focus 
on not only recycling, but manufacturing. We are a great 
manufacturing state in Michigan. We can really make anything. 
And so, we welcome that.
    And refining of critical minerals that are so key to the 
renewable energy systems and electric vehicles.
    I also support mining done in a smart, environmentally 
responsible way. We need to be moving forward and using 
technology and being able to do that.
    I also want to make sure that taxpayers and governments are 
adequately compensated for such activities which Senator 
Heinrich is working on and I think is a very important piece of 
the policies.
    But I do have to say, Madam Chair, that we are talking 
about expediting permitting for mining or doing other things to 
increase the opportunity to get the materials but then, some of 
my same colleagues, not anyone here in this room, is opposing 
the ability to spur the technologies that would be using these 
minerals. And so, I hope that we will be embracing also the 
electric vehicles, the technologies, all the things that we 
need to be able, that we want to use these raw materials for. I 
think this is very, very important.
    I am also very concerned that we are not just simply mining 
the materials and shipping them to China which could happen if 
we are not, ourselves, developing our own technologies. We have 
the intellectual property. We have the capacity on 
manufacturing right now. But the truth is that we could end up 
in a situation where we are mining it here and shipping it to 
China which raises another side issue, I would just say that 
Senator Manchin and I have been working on, which relates to 
what we are doing with ethane as part of oil and gas exports 
because ethane is critical to manufacturing in the United 
States and as that price goes up, we are only hurting ourselves 
if we are shipping it, you know, exporting it. So I am very 
concerned about how we are managing these resources.
    But I do want to ask Assistant Secretary Dan Simmons. 
Assistant Secretary, I am concerned, you have described the 
serious concerns about U.S. strategic vulnerabilities for 
critical minerals. I agree. The Administration's belief that 
the Department of Energy should promote R&D across the supply 
chain. I agree. But your budget in no way reflects what you 
just said.
    I don't know how to square this when your 2020 budget said 
an 85 percent cut to Energy Efficiency and Renewable Energy 
Office, 24 percent cut to Fossil Fuel R&D, 178 percent cut to 
Advanced Research Projects, 16 percent cut to the Office of 
Science which you have referenced during the testimony today. 
How do we accomplish this if the Administration is proposing to 
gut the programs?
    Mr. Simmons. Well, we, you know, we have the proposed 
budget to focus on some things that are critical to the 
Administration but, as you know, the proposed budget is a 
proposed budget, it is the beginning of the process. It's not 
the end of the process. And just last week the Senate 
Appropriators, the mark for my office, the Office of Energy 
Efficiency and Renewable Energy, was over $2.8 billion.
    And so, you know, we--it is a--the proposed budget is a 
give and take. I will definitely take back your comments, 
because we are currently working on the FY21 budget. I will 
take those comments back to the Department of Energy.
    And then, but at the end of the day what matters is the 
monies that get appropriated, and we are working diligently to 
spend those monies wisely. And as we've seen for the past few 
years, that is substantially more money that what has been 
asked for the proposed budget.
    Senator Stabenow. Well, and I would just say we are very 
fortunate to have strong, bipartisan support not to accept 
those cuts every year. And I would just give a shout out to our 
Chair, who is an important part of that process because we have 
not been doing that.
    I just have one other quick question, if I might, as the 
last person speaking?
    The Chairman. Sure, go ahead.
    Senator Stabenow. Mr. Mills, I won't go through, you know, 
everything that you have said. We don't see eye to eye, I 
think, on a lot of things and I appreciate the support in the 
folks funding your Manhattan Institute and the perspective that 
folks bring.
    I will say I agree with you on human rights violations, but 
I also want to just point out that international human rights 
violations have also been associated with the oil industry, 
which to be fair, I didn't hear you mentioning that, be it in 
Nigeria or South Sudan. And the U.N. recently wrote the 
international oil companies should be well aware of the legacy 
of unaddressed human rights violations associated with oil 
exploration. So I support your focus on that, but we need to be 
focusing on everything.
    I would just finally ask one question. Well, actually, two 
questions.
    Do you believe that climate change is a crisis? Do you 
believe that?
    Mr. Mills. Do you have--that is the one question?
    Senator Stabenow. That's your question, yes.
    Mr. Mills. Do I think it's a crisis?
    Senator Stabenow. Do you believe that climate change----
    Mr. Mills. I don't believe it's a crisis, no, I don't.
    Senator Stabenow. You don't.
    Mr. Mills. I agree with Bill Gates on the matter that it's, 
that human beings have demonstrable impacts on everything in 
the environment, including the atmosphere. I think Bill Gates 
would describe it as a long-term challenge and not a crisis. I 
would be in his camp.
    Senator Stabenow. Do you think it is a challenge? You are 
saying it's a challenge?
    Mr. Mills. Yes, it is.
    Do I think dealing with climate change is a challenge? The 
climate has always changed. It's going to change whether it 
changes more radically or a lot, it's always a challenge. 
Resiliency is the biggest single challenge humanity has with 
respect to weather and climate.
    Senator Stabenow. Okay.
    Mr. Mills. The challenge of doing something about it is 
unequivocally, scientifically, economically and in engineering 
terms, the largest, single proposed change in the structure of 
society that's ever been made anywhere. So, yes, it's a big 
deal.
    Senator Stabenow. I understand.
    And one other just quick question because I know the Chair 
has been very patient.
    It sounds like from what you are saying and from your 
written testimony that the U.S. should simply cede global 
leadership on renewable energies and advanced vehicles to other 
countries because fossil fuels have a century head start in 
developing their industry in the United States.
    Mr. Mills. I'm saying the opposite.
    Senator Stabenow. The opposite?
    Mr. Mills. I'm saying that the----
    Senator Stabenow. It sounds like you don't believe it is 
worth it for us to go in that direction on clean energy.
    Mr. Mills. No, I'm not saying--I'm saying the opposite.
    I'm saying the fact that we are pursuing greater use of 
wind, solar, and batteries, which is meritorious in many ways 
and far greater use that we have today, has implications that 
are poorly understood and recognized from a physical resource, 
economic and environmental perspective.
    We are exporting the issues that we are unhappy about which 
are environmental issues, labor issues by being an independent, 
essentially, an independent oil producer, we have control over 
those human rights issues here. We don't have control over 
these issues with respect to the supply chain for green energy.
    Senator Stabenow. Thank you.
    Well, I am looking forward to having us have more control 
over our raw materials, Madam Chair. Thank you, again, to you 
and the Ranking Member, for having what is a very important 
hearing.
    The Chairman. Thank you.
    It is a very important hearing.
    Just to follow up on that because I think sometimes, again, 
we don't know what we don't know and the supply chain is not a 
very transparent process. I think there are real challenges as 
you try to trace what goes into this or what goes into the 
battery of your electronic vehicle. And so, we put ourselves in 
a position that while we want this, we want to be able to say 
that what we are using is not only derived in an 
environmentally sensitive and sound manner, but that from a 
human rights perspective we have all done right. And in 
fairness, it is difficult, it is challenging.
    Somebody noted the Washington Post article which I, too, 
had read which I thought was very well done with regards to how 
lithium is being extracted in the Congo. And you look at that 
and say, individually we need to be doing something. 
Collectively, we need to be doing even more.
    But in fairness, and I guess I will throw this to you, 
either Mr. Mills or Assistant Secretary Simmons, what more can 
we be doing to improve the transparency in the supply chain 
because I think right now, a lot of folks just don't know. And 
maybe they don't care, maybe they don't want to know, maybe 
they just want the product, maybe they just want to believe 
that there is free energy. But I think that this is a challenge 
for us when as an issue it is not clearly understood.
    So jump in here, Mr. Assistant Secretary.
    Mr. Simmons. So I'll start on that one. Interesting to hear 
what Mr. Mills has to say.
    I think one of the best things that we can do about the 
supply, about this supply chain transparency, is to have U.S. 
supply chains or supply chains that are based in countries like 
Canada, the United States, Australia.
    I had the chance a little while ago to visit the Rio 
Tinto's Kennecott Bingham Canyon Mine in Utah, and one of the 
byproducts of producing copper there is gold and silver. And 
Tiffany's, the jewelry company, buys their gold and silver.
    Like, you saw how incredibly transparent that supply chain 
was. Well, it's because it is a global, one of the largest 
global miners and a large jewelry company, and they are very 
cognizant of those challenges. That's one of the most important 
things.
    One, we have to raise the issue of the challenges of supply 
chains. And two, when it occurs in the United States, it is at 
another level of transparency.
    As has been noted earlier, when it is run by state-owned 
enterprises, when it's, you know, when it's illegally obtained, 
there's no transparency there. And so, a place like the United 
States, like Canada, like Australia, it is just another level 
of transparency that you don't get anywhere else.
    The Chairman. Mr. Mills.
    Mr. Mills. I couldn't agree more.
    I could elaborate on that. If the transparency comes by 
having the supply chain in countries where you can't be 
transparent, and as you, I'm sure, know, the efforts to force 
more transparency on the African nations' supply chain was 
opposed by a group of, I think, 20 NGOs because they were 
worried that that would cause the trade to go underground, 
figuratively disappear and make the supply chain even more 
opaque.
    Maybe the short answer to how to make the supply chain 
better is through a very old technique called shaming. And 
that's a little bit of what's been going on in consumer groups. 
And I think that might help because shaming can often work in 
cultures, even in non-Western cultures it works.
    The Chairman. Let me ask you, Ms. Carlson. You have very 
keenly focused on China and the role that China plays with 
regards to critical minerals and rare earths. I think we 
recognize that in addition to not only having the resource, 
they have worked very aggressively with their own very specific 
strategy, their ``Made in China 2025'' initiative. They are 
clearly looking at the full supply chain. Are there any other 
countries besides China that you are watching that we should be 
watching that, again, has a very clear and focused view of 
this?
    I spend a lot of my time in the Arctic looking at the 
issues of the Arctic and, of course, we know we have 
considerable resources in the Arctic with very few people. For 
some, it is cold and dark and out of the way and there aren't a 
lot of investors that are looking at places like Greenland, for 
instance, and so China can come in and say, here, we will help 
you. We will bring in a workforce. We will be able to extract a 
resource, and we will be able to benefit you. China is very 
clear about that.
    Who else or is there anybody else?
    Ms. Carlson. Thank you for the question.
    I think there are other countries. And as you mentioned in 
the beginning, countries that are focusing on developing their 
mineral strategy writ large as a matter of their economic 
competitiveness, Australia being one of them.
    So I think it's important to look around the world and see 
how those policies are being developed, how they're being 
prioritized and how they're ensuring sustainable production 
with supply chains that are transparent and seeing what we can 
learn and how we can partner and move forward with a 
sustainable strategy ourselves.
    I think it's also important to recognize in those countries 
where minerals are concentrated, other factors that are 
impacting their availability whether it's labor standards, 
geopolitical risks and other factors that could really 
undermine access and supply to those resources. That's 
absolutely critical.
    And also looking into the Arctic, as you say, understanding 
that there have been investments by China and Greenland toward 
that end.
    I do think that there is a tremendous opportunity here as 
Senator King asked earlier, has it been lost and has our 
competitiveness been undermined? And I would say, no. I would 
say that the situation now in addressing this--and thank you 
again to your Committee for doing so--presents an incredible 
opportunity for economic development and competitiveness for 
the United States and our partners, as was mentioned, but will 
require full commitment to investment in R&D, really supporting 
the supply chains that work, that were discussed for recycling, 
partnering with the private sector to do so, understanding that 
there are companies that are recognizing those risks to their 
own supply chain and already starting to do something about it 
themselves.
    So aligning those interests with the public and the private 
sector can help reduce the risk and create the scale that's 
needed so there won't be as much focus, necessarily, on price 
floors or other things that would be challenging to implement, 
but creating the scale, the network and the resource and the 
skills and investment in science and technology that will be 
necessary to really grow that here.
    The Chairman. You speculate about whether or not we are so 
far behind that we can never catch up. I think we have to 
remember that one of the advantages that we have, in addition 
to good environmental laws and standards, good record with 
labor protections, but we have the resource, not every nation 
has the resource.
    I look to my state, a very, very exciting graphite mine up 
in the North, and then down in the Southeastern part of the 
state we have a very favorable opportunity for processing of 
rare earths down in the Bokan Mountain area. And right now, we 
have some folks that are looking to establish a processing 
facility there in Ketchikan, Alaska.
    Now in fairness, there are some challenges with getting the 
investors. But when Senator Stabenow mentioned that we don't 
want to be in a position where we are mining the resource here 
and then shipping it to China, I didn't want to interrupt her, 
but we are doing that now. And it is my understanding that the 
Mountain Pass operation in California is now reopened, and so 
we are mining that resource, those critical minerals that we 
want. But because we don't have any processing facility here in 
this country, we are sending it to China. And then, I suppose, 
if we're good, China will send it back to us. It is not just 
theoretical, what if we have the resources here, but we don't 
have the processing. It is a true enough situation right now.
    Assistant Secretary Simmons, you were kind of challenged by 
Senator Stabenow with regards to your budget there, and I 
concurred. I was a little bit disappointed. That is why, as an 
appropriator, I strongly supported the work that Chairman 
Alexander, the Chairman of that Subcommittee, did in really 
plussing up the EERE account. I think that that is significant. 
I think it is important.
    I certainly hope that the Administration gets a very clear 
message that we feel pretty strongly about this and how we are 
able to do with minerals what we have demonstrated with regards 
to our energy dominance that we can be doing more, not only to 
dominate but to diversify, which I am using as your take away, 
Dr. Bazilian, because I think that is an important part for us 
because with as many of these important minerals as we need in 
today's modern society, I don't think it is possible to 
dominate, but I do think it is clearly possible to be a 
significant player with regard to how we cannot only gain 
access to production but to the processing and to all aspects 
of that supply chain. But it takes a focus. I think it takes a 
vision and it takes a political willingness that, I think, that 
is where we are lacking right now is the willingness to 
actually move forward with a policy. We have an Executive Order 
that is in place. Our American Mineral Security Act, I think, 
is a good step with that.
    But in fairness, I think it needs to be a broader view and 
a broader vision. So that is one of the roles of this Committee 
is to try to look at things from 30,000 feet and figure out 
where we go forward. But I think this is an area where there 
needs to be greater education. There needs to be greater 
awareness. There needs to be better understanding as to the 
very, very significant role that minerals play in a modern 
society--how we extract them safely and responsibly from an 
environmental perspective, from a human perspective, a social 
perspective. It is a tall order but it is certainly something 
that the United States can help lead that charge.
    I thank you for contributing to a very valuable 
conversation here this morning. Know that in addition to all 
that you have provided us, other members may have questions 
that they wish to submit and we will include those and your 
responses as part of the Committee record as well.
    With that, we stand adjourned.
    [Whereupon, at 11:33 a.m. the hearing was adjourned.]

                      APPENDIX MATERIAL SUBMITTED

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