[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
DEPENDENCE ON FOREIGN ADVERSARIES:
AMERICA'S CRITICAL MINERALS CRISIS
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OVERSIGHT HEARING
BEFORE THE
SUBCOMMITTEE ON OVERSIGHT AND
INVESTIGATIONS
OF THE
COMMITTEE ON NATURAL RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
Thursday, February 9, 2023
__________
Serial No. 118-2
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Printed for the use of the Committee on Natural Resources
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
or
Committee address: http://naturalresources.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
51-158 PDF WASHINGTON : 2023
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COMMITTEE ON NATURAL RESOURCES
BRUCE WESTERMAN, AR, Chairman
DOUG LAMBORN, CO, Vice Chairman
RAUL M. GRIJALVA, AZ, Ranking Member
Doug Lamborn, CO Grace F. Napolitano, CA
Robert J. Wittman, VA Jim Costa, CA
Tom McClintock, CA Gregorio Kilili Camacho Sablan, CNMI
Paul Gosar, AZ Jared Huffman, CA
Garret Graves, LA Ruben Gallego, AZ
Aumua Amata C. Radewagen, AS Joe Neguse, CO
Doug LaMalfa, CA Mike Levin, CA
Daniel Webster, FL Katie Porter, CA
Jenniffer Gonzalez-Colon, PR Teresa Leger Fernandez, NM
Russ Fulcher, ID Melanie A. Stansbury, NM
Pete Stauber, MN Mary Sattler Peltola, AK
John R. Curtis, UT Alexandria Ocasio-Cortez, NY
Tom Tiffany, WI Kevin Mullin, CA
Jerry Carl, AL Val T. Hoyle, OR
Matt Rosendale, MT Sydney Kamlager-Dove, CA
Lauren Boebert, CO Seth Magaziner, RI
Cliff Bentz, OR Nydia M. Velazquez, NY
Jen Kiggans, VA Ed Case, HI
Jim Moylan, GU Debbie Dingell, MI
Wesley P. Hunt, TX
Mike Collins, GA
Anna Paulina Luna, FL
John Duarte, CA
Harriet M. Hageman, WY
Vivian Moeglein, Staff Director
Tom Connally, Chief Counsel
Lora Snyder, Democratic Staff Director
http://naturalresources.house.gov
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SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
PAUL GOSAR, AZ, Chairman
MIKE COLLINS, GA, Vice Chair
MELANIE A. STANSBURY, NM, Ranking Member
Matt Rosendale, MT Ed Case, HI
Wesley P. Hunt, TX Jared Huffman, CA
Mike Collins, GA Ruben Gallego, AZ
Anna Paulina Luna, FL Raul M. Grijalva, AZ, ex officio
Bruce Westerman, AR, ex officio
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CONTENTS
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Page
Hearing held on Thursday, February 9, 2023....................... 1
Statement of Members:
Gosar, Hon. Paul, a Representative in Congress from the State
of Arizona................................................. 1
Stansbury, Hon. Melanie A., a Representative in Congress from
the State of New Mexico.................................... 3
Westerman, Hon. Bruce, a Representative in Congress from the
State of Arkansas.......................................... 4
Grijalva, Hon. Raul M., a Representative in Congress from the
State of Arizona........................................... 18
Statement of Witnesses:
Loris, Nick, Vice President of Public Policy, C3 Solutions,
Arlington, Virginia........................................ 7
Prepared statement of.................................... 9
Moats, Michael, Professor and Department Chair of Materials
Science and Engineering, Missouri University of Science and
Technology, Rolla, Missouri................................ 18
Prepared statement of.................................... 20
Mintzes, Aaron, Senior Policy Counsel, Earthworks,
Washington, DC............................................. 26
Prepared statement of.................................... 27
Questions submitted for the record....................... 32
George, Jason, Business Manager, International Union of
Operating Engineers, Local 49, Minneapolis, Minnesota...... 33
Prepared statement of.................................... 35
Additional Materials Submitted for the Record:
Submissions for the Record by Representative Stauber
E&E Article titled, ``Biden admin looks to overseas
mining for EV, renewable needs,'' dated January 23,
2023................................................... 52
Submissions for the Record by Representative Luna
Graphic on China's Exploitation of Child Labor........... 49
Submissions for the Record by Representative Grijalva
Cobalt Institute, Letter to the Committee................ 68
OVERSIGHT HEARING ON DEPENDENCE ON FOREIGN ADVERSARIES:.
AMERICA'S CRITICAL MINERALS CRISIS
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Thursday, February 9, 2023
U.S. House of Representatives
Subcommittee on Oversight and Investigations
Committee on Natural Resources
Washington, DC
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The Subcommittee met, pursuant to notice, at 9:05 a.m. in
Room 1134, Longworth House Office Building, Hon. Paul Gosar
[Chairman of the Subcommittee] presiding.
Present: Representatives Gosar, Rosendale, Collins, Luna,
Westerman; Stansbury, Case, Gallego, and Grijalva.
Also present: Representatives Lamborn and Stauber.
Dr. Gosar. The Subcommittee is meeting today to hear
testimony on the dependence on foreign adversaries: America's
critical minerals crisis.
I ask unanimous consent that the gentleman from Colorado,
Mr. Lamborn, and the gentleman from Minnesota, Mr. Stauber, be
allowed to sit with the Subcommittee and participate in the
hearing.
Without objection, so ordered.
Under Committee Rule 4(f), any oral opening statements at
the hearing are limited to the Chairman and the Ranking
Minority Member. I, therefore, ask unanimous consent that all
other Members' opening statements be made part of the hearing
record, if they are submitted in accordance with Committee Rule
3(o).
Without objection, so ordered.
Good morning, and welcome to this important hearing titled,
``Dependence on Foreign Adversaries: America's Critical
Minerals Crisis.''
I am honored to be the Chairman of the House Natural
Resources Subcommittee on Oversight and Investigations, joined
by our Vice Chairman, Mike Collins, our colleagues, and
distinguished guests and experts.
I also congratulate Ranking Member Stansbury on her new
role. Being a neighbor from New Mexico, it is kind of a fitting
title.
This Subcommittee is excited to get back to work.
STATEMENT OF THE HON. PAUL GOSAR, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF ARIZONA
Dr. Gosar. Today, we will examine the dependence of the
United States on foreign adversaries for critical minerals, a
dependence that undermines our national sovereignty, our
economic prosperity, and our technological innovation. We will
explore the current state of our critical mineral supply chain
and the actions we must take to empower our national security
and to unleash America's energy and mineral potential.
This is an urgent matter, as we rely on critical minerals
for our way of life, from smartphones and laptops, to renewable
energy technology, to medical equipment, military gear, energy
storage, defense systems, and many essential aspects of modern
life and national security that depend on an abundance of
critical minerals.
The United States must lead in the production of these
minerals and reduce our dependence on nations that do not share
our values, interests, or our high environmental standards. By
promoting the development of domestic minerals and streamlining
the permitting process, we can create jobs here in America,
increase economic growth, and enhance our energy and national
security.
Minerals are particularly essential for battery storage,
and a lack of sufficient battery storage and transmission
capacity means renewable resources cannot be stored in large
quantities, like coal or natural gas. Without reliable
conventional energy sources, communities are subject to rolling
blackouts, endangering the health and safety of our local
communities. We cannot afford to be dependent on foreign
nations to power America.
I say again, our country has a dangerous reliance on
foreign nations for energy and critical minerals. Recycling
plays an important role, but demand requires American mining,
as well.
Additionally, there is a case for climate optimism. It is
called American innovation. Everyone here wants to maintain
healthy lands and waters, especially many of my Republican
colleagues who live in rural areas. Sadly and concerningly,
most of our critical minerals come from foreign countries,
particularly China, despite there being an abundance of
valuable materials we could source here at home.
Unfortunately, permitting a new hardrock mine in the United
States can take more than a decade. Our unpredictable and
overburdening regulatory framework pushes investment abroad,
where environmental and labor standards are not nearly as
stringent as our own. Promoting responsible renewable American
energy development requires domestic hardrock mining to avoid
supply chain disruptions and to reduce our import reliance on
unfriendly nations.
This hearing is an opportunity to have a constructive
conversation about the challenges we face and the solutions we
can implement to meet these challenges. So, let's work together
with the common goal of unlocking that full potential of our
country, to secure a brighter future for all Americans.
Together we can balance our national security and environmental
goals. Over-regulation, even if well-intended, will simply lead
to more production in adversarial nations with few, if any,
labor or environmental standards.
I welcome our new Members and appreciate the important work
we will do together.
I also welcome and thank our guests for joining. Thank you
all for joining us today.
I now recognize the Ranking Member for any statement she
may have.
STATEMENT OF THE HON. MELANIE A. STANSBURY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW MEXICO
Ms. Stansbury. All right. Thank you, Mr. Gosar, Chairman.
It is an honor to be able to serve alongside you, and welcome
to our first Subcommittee of Oversight hearing. It is with
great joy that I am able to serve as the Ranking Member.
I want to thank our witnesses and guests today and, of
course, all of our Members who are here for the first time
today. I am Melanie Stansbury, and I represent New Mexico's 1st
Congressional District, which is right in the heart of central
New Mexico. It is a vast rural district that includes
Albuquerque and many of the surrounding rural and tribal
communities, which are greatly affected by the work of the
agencies that this Committee and Subcommittee have jurisdiction
over.
These issues that we cover in the Natural Resources
Committee at large, and especially the oversight that we do in
this Committee, are of great personal concern to me and to the
communities that I represent, not only because of the
significance of the beauty and public lands and waters that are
within my district and the tribal communities that I help to
represent and collaborate with, but also because I myself am a
science professional who has worked in natural resources for
more than 20 years. I have worked in water resources and
drought management since the beginning of my career, and worked
on the counterpart of this Committee in the Senate Energy
Committee for a number of years, and in the Office of
Management and Budget.
In fact, during my time working in the Office of Management
and Budget, I was actually the budget and policy analyst who
oversaw the budget for the Bureau--the USGS and the critical
minerals issues that we are talking about today. So, this is
actually a topic that I have worked on for many years,
including during my time in the Senate Energy Committee, where
I also worked on critical minerals issues in a bipartisan
manner with my counterparts on the Committee.
So, the issues that we are going to discuss today are near
and dear to my heart. Of course, they are of national strategic
importance.
But before I dive into that, I just want to take a moment,
since we are beginning the Subcommittee's work, to talk about
some of the priorities that we are hoping to work on over the
course of this Congress. And I hope and am optimistic that we
will find opportunities for bipartisan collaboration, not only
for policies to advance the needs of the American people that
we represent, but also to conduct appropriate oversight and to
root out waste, fraud, and abuse, which, of course, is our role
here on the Oversight Committee.
Among the many issues that this Committee will take up and
which we are hoping to prioritize in our oversight and policy
role are issues around the climate and clean energy transition
and, in particular, helping to empower our communities so that
they can determine their own economic futures in the process.
New Mexico is an energy-rich state of all forms of energy.
And as we are making this transition to a clean energy future,
it is absolutely critical that our workers, our unions, and our
communities have a strong voice in every aspect of how we plan
those local, regional, and national economies.
It is also crucial that we develop the workforces that help
to support the development of those industries, and to help
transition those who are going to see new opportunities as we
build out a climate resilient grid and energy future.
In addition to that, obviously, this Committee has broad
jurisdiction over public lands, forests, and waters. And to the
extent that the Oversight Committee takes up issues surrounding
those, we will be working on those issues, as well as upholding
our responsibilities to our tribes.
So, the issue that we are here to talk about today, of
course, is critical minerals. And as we know, critical
minerals--and as the Chairman discussed--are crucial to the
future of the United States.
Up until the 1990s, the United States was a net exporter of
rare earth minerals. And due to trade policies that began,
obviously, in the 1980s and extended into the 1990s, American
mining companies were no longer able to compete due to global
prices. And as a result of that, we saw the rise in especially
Chinese investment in mining, and not only in China but across
the world.
Recent efforts by the Chinese Government to stockpile and
to restrict the trade of these elements have put the United
States and other global countries at risk. For the United
States, this is a national security issue. This is an issue
that affects every aspect of our economy, as we are completely
dependent, every single one of us, on these electronics that
run our lives these days, and every aspect of our lives.
So, the question before us is how do we responsibly develop
our critical minerals supply chain through recycling, re-use,
innovation, international trade relationships, and making the
best and most appropriate use of existing resources in the
United States?
Let me be clear. We cannot mine and permit our way out of
this problem. There may be mining solutions that may be a part
of what we have to do, but that is not the sole solution to
addressing our critical minerals and national security
shortage.
So, I look forward to working with the Chairman, and with
that I yield back.
Dr. Gosar. I thank the gentlelady. I now recognize the Full
Committee Chairman, Mr. Westerman, for any statement.
STATEMENT OF THE HON. BRUCE WESTERMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ARKANSAS
Mr. Westerman. Thank you, Chairman Gosar, and good morning,
everyone. Thank you for joining us for our first Subcommittee
hearing for the 118th Congress. And it is very fitting that
this hearing be with the Oversight and Investigations
Subcommittee.
As I have said before, I think the purpose of this
Committee, and the whole Committee, is to shine light, discover
truth, and make changes as are needed. And this Committee is
where much of that light-shining will take place.
Oversight should be a bipartisan effort by Congress to
exercise our constitutional duty to have checks and balances
over an administration. And I believe that is true regardless
of who the majority or the minority party is in the Congress,
or who sits at the Oval Office.
I do want to offer my congratulations to Chairman Gosar and
Ranking Member Stansbury. You have an important role here, and
I look forward to your leadership and the work of this
Subcommittee. I appreciate the opening statements of both the
Chairman and the Ranking Member. And I think, with that
attitude, we should be able to do the work of the Committee.
And I would add to what Ms. Stansbury said, that we can't
mine and permit our way out of this. Actually, we would have to
permit and then mine, but it is permit, mine, refine, and
manufacture. We have to create those supply chains that allow
us to compete with the--it is, basically, with the Chinese
Communist Party, it is with Vladimir Putin and Russia. And it
is a lot of bad actors around the world that are supplying the
ingredients that go into these phones and other devices.
In the last Congress, the Inflation Reduction Act, and
there are, literally, hundreds of billions of dollars to build
green energy systems. And all of those green energy systems are
reliant on mining. It comes back to mining, and then the
processes that take place after that.
So, we have been blessed with energy and minerals here in
the United States. Both the Chairman and the Ranking Member
come from states that are abundantly blessed with energy and
minerals and therein the focus of where a lot of these policies
need to be addressed, as well as my friend Mr. Stauber from
Minnesota.
So, at the same time, Congress passed a law to spend
billions of dollars on electrifying our economy. We are also
seeing actions from the Administration to shut down mining, and
those two things really don't go hand in hand. They are
competing interests, and they make the problem even worse.
We talked in the hearing yesterday about some of these
issues, and the fact that the World Bank says we need to mine
as much copper in the next 20 to 25 years as has been mined in
the history of the world. That is a big challenge. If you just
focused every effort that we had to do that, it would still be
hard to meet those challenges. We need to do more recycling,
but there is not enough to recycle to even come close to meet
the demands that we have.
When you look at the critical minerals list and you look at
where those critical minerals are being supplied from,
honestly, we should be embarrassed that we are so far down the
list when we have been blessed with deposits of those critical
minerals here in the United States. And if we develop those
minerals here and develop the other parts of the supply chain,
then that means generating huge amounts of wealth for the
United States, for U.S. workers, for great jobs in rural
communities.
I live in a rural community, and I think just about
everybody on this dais lives in an area that is either rural or
close to a rural community, and we know how important these
jobs are to the local economies.
And we can do it cleaner and safer, and with less human
rights violations, actually, I will say with no human rights
violations.
[Chart.]
Mr. Westerman. And the situation we are in right now, as
these pictures behind me depict, cobalt is Congolese cobalt,
and it is coming from mines with child slave labor. And we have
to be realistic, and understand what is happening. As we pour
more money into an electrified economy, we are increasing the
labor participation rate in Congo with forced labor, with child
slave labor, and people forced to do jobs for as little as $2 a
day or less.
So, those are the challenges we face with Oversight. I look
forward to the hearing, I look forward to additional hearings,
and then I really look forward to taking what we learn from
these hearings, putting it into substantive legislation, or
else informing the Appropriations Committee what needs to
happen on funding for these Federal agencies that are failing
to do their job.
And with that, Chairman, I yield back.
Dr. Gosar. The Ranking Member is on his way. So, when he
gets here, we will go back to him. We will start with our
witnesses.
Our first witness is Mr. Nick Loris, the Vice President of
Public Policy, C3 Solutions from Arlington, Virginia.
Our second witness is Dr. Michael Moats, Professor of the
Department of Materials Science and Engineering, Missouri
University of Science and Technology, Rolla, Missouri.
Mr. Aaron Mintzes, Senior Policy Counsel of Earthworks,
Baltimore, Maryland.
I now yield to Representative Pete Stauber for 30 seconds
to introduce our final witness, Mr. Jason George, Business
Manager for the International Union of Operating Engineers,
Local 49.
Mr. Stauber. Thank you, Mr. Chair. Today, I have the
pleasure of introducing my friend, Jason George.
Jason serves as the Business Manager and Financial
Secretary of the Operating Engineers Local 49, or 49ers, as
they are known in Minnesota, North and South Dakota. There are
few people that have the insight and leadership of Jason.
Our 49ers span Minnesota, North Dakota, and South Dakota,
operating the heavy equipment and doing plant management at
facilities across the upper Midwest. Whatever the project may
be, you are likely to find one of Jason's 49er members putting
in the hard work to build the infrastructure.
Thank you, Jason, and I look forward to your testimony
today.
Dr. Gosar. Let me remind the witnesses that, under
Committee Rules, they must limit their oral statements to 5
minutes, but their entire statement will appear in the hearing
record.
To begin your testimony, please press the talk button on
the microphone.
We use timing lights here. When you begin, the light will
turn green. When you have 1 minute left, it will turn yellow.
And at the end of 5 minutes it will turn red. Then I will ask
you to please complete your statement very shortly.
I will also allow all witnesses to testify before Member
questioning.
The Chair now recognizes Mr. Loris for 5 minutes.
STATEMENT OF NICK LORIS, VICE PRESIDENT OF PUBLIC POLICY, C3
SOLUTIONS, ARLINGTON, VIRGINIA
Mr. Loris. Thank you, Chairman Gosar, Ranking Member
Stansbury, and distinguished members of the Subcommittee. Thank
you for this opportunity to testify this morning.
My name is Nick Loris, and I am the Vice President of
Public Policy for C3 Solutions, which stands for the
Conservative Coalition for Climate Solutions. With my time, I
would like to make three brief points: first, the importance of
critical minerals for the economy and the requirements
necessary to meet clean energy demands; second, the adverse
environmental and social impacts from mining and processing
critical minerals in certain places abroad; and third,
exploring opportunities to capitalize on domestic mineral
abundance, to diversify the market, and to reduce dependence on
foreign adversaries.
First, non-fuel critical minerals are essential for our
quality of life, technological progress, national security, and
environmental ambitions. Critical minerals are the foundation
that empowers companies to build, manufacture, and innovate,
and they are the foundation for the products that keep
Americans and people around the world safe, healthy, and happy.
Critical minerals are also necessary for renewable and
clean energy technologies. Most low-carbon and zero-emissions
technologies require a moderate or high amount of at least two
critical minerals. And several sources, including wind,
batteries, and hydrogen, have moderate to high needs for four
or more critical minerals.
Significant increases in critical mineral supplies will be
necessary to address climate change. To meet the International
Energy Agency's global net-zero targets by 2050, the agency
estimates the world will need 43 million metric tons of
critical minerals, a sixfold increase from 2020 levels.
Granted, we need to take those estimates with a large grain
of humility. But even under much less ambitious scenarios, it
is almost certain that future critical mineral needs will be
substantial.
And to be clear, the massive critical mineral requirements
are not by itself a reason to be pessimistic about the future
of clean energy. Instead, policymakers must recognize the
importance of these minerals, the realities of future demand,
and the challenges and opportunities that lie ahead.
Second, addressing the human rights abuses of critical
mineral development and processing in certain countries will be
essential for having socially just growth in clean energy, in
electric vehicles, and for the continued use of modern
technologies.
The Democratic Republic of the Congo supplies nearly 75
percent of the world's cobalt, and the mining practices are
appalling, to say the least. Having visited and researched the
practices, Harvard fellow Siddarth Kara has extensively
documented the horrors and abuses of artisanal mining in the
DRC, where tens of thousands of child laborers are digging the
cobalt out by hand, while breathing in toxic fumes and dust.
Chinese ownership of most of these mines and Chinese dominance
of cobalt refining exacerbate the supply chain concerns.
And speaking of China, the human rights exploitations of
the Uyghur Muslim minorities and other Muslim minorities in the
Xinjiang region of China has also been well documented, and is
extremely concerning. A recent Breakthrough Institute report
estimates that 42 percent of the global solar grade polysilicon
production capacity was in that region in the year 2021.
In addition to the egregious human rights tragedies, there
are also economic and environmental concerns of over-reliance
on China for minerals and processing. Poor environmental
standards and weak enforcement in China have resulted in
contaminated groundwater and soil, and dangerous levels of air
pollution.
Encouragingly, the rare earth market is diversifying
worldwide to some extent, which will reduce the dependence on
China, and promote more environmentally friendly ways to mine
and process rare earths, which brings me to my third point.
Congress must continue to work with the private sector to
open opportunities to capitalize on resource abundance,
diversify supply chains, promote ethical mineral sourcing, and
develop market alternatives. For instance, modernizing
permitting processes should put America on par with countries
like Canada and Australia that unlock mineral deposits, while
maintaining rigorous environmental safeguards. The more the
United States and other developed countries extract their
resources, the fewer minerals we will need to import from
countries that have lax environmental standards and use morally
unconscionable labor practices.
At a bare minimum, agencies should conduct an environmental
review, rather than place a mining area off limits before any
such review is even conducted.
Further, Congress should continue to support research and
development for critical minerals recycling, mining, and
processing innovations. Collaboration among government labs,
research universities, and the private sector could help unlock
breakthrough technologies, improve efficiencies, and generate
market viable alternatives.
With any subsidies, Congress should also maintain policy
neutrality. To the extent that the government provides any
subsidies, technology neutrality will generate more efficient
outcomes.
In conclusion, rising prices for mineral commodities could
slow the deployment of clean energy technologies moving
forward. Alternatively, rising prices could be an opportunity,
and should be the signal for markets to act, to increase
supplies, to develop substitutes, to secure supply chains,
diversify away from unethically sourced minerals, and reduce
dependence on foreign adversaries where environmental standards
are poor.
Congress can act by removing the barriers that prevent the
private sector from providing clean, reliable energy choices at
lower prices.
Thank you, and I look forward to your questions.
[The prepared statement of Mr. Loris follows:]
Prepared Statement of Nick Loris, Vice President of Public Policy,
Conservative Coalition for Climate Solutions (C3 Solutions)
My name is Nick Loris, and I am the Vice President of Public Policy
at the Conservative Coalition for Climate Solutions (C3 Solutions).
Thank you for this opportunity to appear before the subcommittee to
discuss America's dependence on foreign adversaries with respect to
critical minerals.
My written testimony consists of the following sections:
The importance of critical minerals for the quality of
life, economic well-being and, national security
The need for critical minerals to meet clean energy
demands and climate ambitions
The adverse environmental and social impacts from mining
and processing in certain places abroad
Opportunities to capitalize on domestic mineral abundance,
diversify supply chains, promote ethical mineral sourcing,
and develop market alternatives
Section I. The importance of critical minerals to the economy and to
climate objectives
Critical minerals are just that: critical. Non-fuel mineral
commodities are essential for quality of life, technological progress,
national security, and environmental ambitions. Nearly all the modern
technologies Americans rely on such as cell phones, laptops,
appliances, and vehicles require critical minerals. They are the
foundation that empowers companies to build, manufacture and innovate.
These minerals are necessary inputs to produce affordable energy,
stable food supplies, defense technologies, and advancements in modern
medicine. In short, critical minerals are the foundation for the
products to keep Americans and people around the world safe, healthy,
and happy.
More broadly, mineral development is an important source of jobs
and economic activity in the United States. According to the U.S.
Geological Survey's (USGS) 2021 Mineral Commodity Summaries report, the
estimated value of nonfuel mineral production was $82.3 billion in
2020.\1\ While that figure represents all nonfuel mineral production
(crushed stone account for 22 percent of that value), the value is
nonetheless impressive. The USGS highlights just how essential minerals
are to the overall economy, noting that: ``These mineral materials as
well as imports of processed mineral materials, which increased by 83%
in 2020, were, in turn, consumed by downstream industries creating an
estimated value of $3.03 trillion in 2020, 3% decrease from that in
2019.'' \2\ The United States supplied an additional 10,000 metric tons
of rare earth concentrates, a 36 percent increase from 2019.\3\ The
U.S. continues to be the second largest producer of rare earth
concentrates, though well behind China.
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\1\ U.S. Geological Survey, ``Mineral Commodities Summary,''
January 29, 2021, https://pubs.usgs.gov/periodicals/mcs2021/mcs2021.pdf
\2\ Ibid.
\3\ U.S. Geological Survey, ``Mineral Commodity Summary February
2021,'' February 2, 2021, https://www.usgs.gov/media/images/mineral-
commodity-summary-february-2021
As characterized by The Energy Act of 2020, the other factor which
makes minerals ``critical'' is their susceptibility to supply chain
disruptions. Russia's invasion of Ukraine exemplified the economic
uncertainties, supply chain vulnerabilities and fundamental pitfalls of
reliance on mineral producers that are hostile to the interests of the
United States. As a major supplier of nickel, copper, and palladium
(important inputs for batteries and semiconductors), Russia's invasion
and subsequent sanctions drove up prices for these elements.\4\ Though
not a critical mineral, the nuclear industry's reliance on Russian for
high-assay low-enriched uranium (HALEU) brought conversations about
more domestic enrichment to the forefront.\5\ Disruptions around the
world can threaten supplies of minerals necessary for modern
technologies, including renewable, nuclear, and alternative energy
technologies.
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\4\ Dr. Robert Johnson, ``Supply of Critical Minerals amid the
Russia-Ukraine War and Possible Sanctions,'' Columbia Center on Global
Energy Policy, April 2022, https://www. energypolicy.columbia.edu/
publications/supply-critical-minerals-amid-russia-ukraine-war-and-
possible-sanctions and Emily Pickrell, ``Russia-Ukraine War Helps Drive
Nickel Prices, EV Headaches,'' Forbes, March 31, 2022, https://
www.forbes.com/sites/uhenergy/2022/03/31/russia-ukraine-war-helps-
drive-nickel-prices-ev-headaches/?sh=39a102357cd9
\5\ Paul Day, ``US urges haste on domestic HALEU plan as Russia
faces isolation,'' Reuters, March 22, 2022, https://
www.reutersevents.com/nuclear/us-urges-haste-domestic-haleu-plan-
russia-faces-isolation
According to a recent report from the Citizens for Responsible
Energy Solutions (CRES), the U.S. is completely import-dependent for 14
critical minerals and greater than 50 percent-dependent for 17 other
mineral commodities.\6\
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\6\ Phil Rossetti and George David Banks, ``Foreign Mineral Supply
Chain Dependence Threatens U.S. National Security,'' CRES Forum, March
2022, https://cresforum.org/wp-content/uploads/2022/03/
CRES_WhitePager_CriticalMinerals_03212022_v1.pdf
Section II. The need for critical minerals for clean energy and climate
---------------------------------------------------------------------------
ambitions
As it stands today and for the foreseeable future, renewable and
clean energy technologies are quite mineral dependent. A March 2022
report from the International Energy Agency (IEA) details the critical
minerals necessary for low- and zero-carbon dioxide power generation
and transportation.\7\ Whether it is wind, solar, hydro, nuclear,
electric vehicles, battery storage, hydrogen, geothermal, or bioenergy,
every one of these clean energy technologies requires a moderate or
high amount of at least two critical minerals.\8\ Several technologies,
most notably wind, batteries, and hydrogen, have moderate to high needs
for four or more critical minerals.\9\
---------------------------------------------------------------------------
\7\ International Energy Agency, ``The Role of Critical Minerals in
Clean Energy Transitions: World Energy Outlook Special Report,'' March
2022, https://iea.blob.core.windows.net/assets/ffd2a83b-8c30-4e9d-980a-
52b6d9a86fdc/TheRoleofCriticalMineralsinCleanEnergyTransitions.pdf
\8\ Ibid. See chart on page 45.
\9\ Ibid.
As indicted by the IEA charts below, clean energy technologies are
much more mineral intensive than their conventional counterparts. When
comparing electricity generating sources to a natural gas plant,
offshore wind is 13 times more intensive, onshore wind is nearly 9
times more intensive, solar photovoltaics are nearly 6 times more
intensive, and nuclear power is 4.5 times more intensive.\10\
Similarly, electric vehicles are 6 times more mineral intensive than
vehicles powered by an internal combustion engine.\11\
---------------------------------------------------------------------------
\10\ International Energy Agency, ``The Role of Critical Minerals
in Clean Energy Transitions: Executive Summary,'' March 2022, https://
www.iea.org/reports/the-role-of-critical-minerals-in-clean-energy-
transitions/executive-summary
\11\ Ibid.
Included in list of critical minerals for various clean energy
technologies is rare earth elements (REEs). The value of REEs lies in
their unusual physical and chemical properties that give them unique
magnetic and optical capabilities. Rare earth elements are essential
for solar cells, batteries, wind turbine magnets and hydrogen
electrolysers.\12\ They are critical to scaling up clean energy
deployment and global decarbonization.
---------------------------------------------------------------------------
\12\ International Energy Agency, ``The Role of Critical Minerals
in Clean Energy Transitions: World Energy Outlook Special Report,''
March 2022, https://iea.blob.core.windows.net/assets/ffd2a83b-8c30-
4e9d-980a-52b6d9a86fdc/
TheRoleofCriticalMineralsinCleanEnergyTransitions.pdf
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
---------------------------------------------------------------------------
Source: International Energy Agency
Addressing climate change will require significant increases in the
critical mineral supply. Setting aside the attainability and potential
costs of net-zero targets (both necessary considerations), a
substantial number of critical minerals will be needed to meet any
emissions target. To meet the IEA's global net zero targets by 2050,
the agency estimates the world will need 43 million metric tons of
critical minerals, a sixfold increase from 2020 levels.\13\
---------------------------------------------------------------------------
\13\ International Energy Agency, ``The Role of Critical Minerals
in Clean Energy Transitions: Executive Summary,'' March 2022, https://
www.iea.org/reports/the-role-of-critical-minerals-in-clean-energy-
transitions/executive-summary
---------------------------------------------------------------------------
In IEA's less ambitious Sustainable Development Scenario (SDS),
which is the trajectory of clean energy needed to meet the Paris
Climate Agreement targets, critical mineral growth would need to
quadruple. IEA estimates that, ``Lithium sees the fastest growth, with
demand growing by over 40 times in the SDS by 2040, followed by
graphite, cobalt and nickel (around 20-25 times). The expansion of
electricity networks means that copper demand for grid lines more than
doubles over the same period.'' \14\ Notably, these projections exclude
the demand requirements for steel and aluminum.
---------------------------------------------------------------------------
\14\ Ibid.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
---------------------------------------------------------------------------
Source: International Energy Agency
Regarding future critical mineral demand, IEA's sustainable
development scenario and net-zero scenarios are very ambitious. Making
these projections a reality would require ``an unprecedented push in
clean energy.'' \15\ That push includes electric vehicle sales
increasing from 5 percent in 2020 to 60 percent in 2030 and for 90
percent of power generation to come from renewable sources, 70 percent
being wind and solar.\16\
---------------------------------------------------------------------------
\15\ International Energy Agency, ``Net Zero by 2050 A Roadmap for
the Global Energy Sector,'' May 2021, https://
iea.blob.core.windows.net/assets/7ebafc81-74ed-412b-9c60-5cc32c8396e4/
NetZeroby2050-ARoadmapfortheGlobalEnergySector-
SummaryforPolicyMakers_CORR.pdf
\16\ Ibid.
---------------------------------------------------------------------------
Nevertheless, even if the most ambitious net zero target is not
met, it is very likely that critical mineral demand will be
substantial. Energy analysts Philip Rossetti and George David Banks
analyzed several studies that attempt to estimate the demand for
critical minerals. Rossetti and Banks write, ``there is a significant
range in the estimates required across all three analyses, which can
largely be attributed to varying assumptions as to the rates of
improvement in the efficiency of materials utilization and in
recycling, as well as the substitutability of minerals. However, all
three analyses estimate a non-trivial portion of the Earth's total
critical minerals would be required to meet global clean energy demand
[emphasis added].'' \17\
---------------------------------------------------------------------------
\17\ Phil Rossetti and George David Banks, ``Foreign Mineral Supply
Chain Dependence Threatens U.S. National Security,'' CRES Forum, March
2022, https://cresforum.org/wp-content/uploads/2022/03/
CRES_WhitePager_CriticalMinerals_03212022_v1.pdf
---------------------------------------------------------------------------
Certainly, projecting resource requirements across multiple decades
is not a prediction but is instead an assessment of the potential
demand for critical minerals. Expert projections of peak oil, food
shortages, and resource exhaustion have come and gone, often with
little accuracy. These projections often assume that past trends and
the status quo will continue.\18\ However, markets change as innovators
drive efficiency and technological progress. It is worth projecting
future critical minerals needs with some humility and optimism that
markets will find ways to responsibly meet consumers' needs, which may
or may not include the use of these minerals.
---------------------------------------------------------------------------
\18\ ``Malthus, the false prophet,'' The Economist, May 15, 2008,
https://www.economist.com/finance-and-economics/2008/05/15/malthus-the-
false-prophet
---------------------------------------------------------------------------
Moreover, massive critical mineral requirements are not by itself a
reason a reason to be pessimistic about the future of clean energy.
Instead, policymakers must recognize the importance of these minerals,
the economic and technological realities of future demand, and the
challenges and opportunities that lie ahead.
Section III. The adverse environmental and social impacts from mining
and processing in certain places abroad
When considering the environmental effects among all the energy
sources and technologies available, policymakers must consider the
broad range of environmental and social tradeoffs. Environmental
impacts for one product may include impacts on: air quality, water
quality, greenhouse gas emissions, land use, water use, and fish and
wildlife habitat. There are direct, indirect, and cumulative effects to
consider. Some risks are more well-known and others less known. Some
environmental risks are immediate while others span decades or reach
centuries into the future.
Making matters even more difficult is that people weigh
environmental tradeoffs differently and often neglect opportunity costs
and unintended consequences. Does an unobstructed river hold more
environmental value than the air quality and climate benefits from
hydroelectric power? Does blocking a pipeline lead to more
environmental risk because companies shift the liquid fuels transport
to rail, truck, or ship? The reality is that decision-making that
properly weighs costs, benefits, and trade-offs--using sound,
transparent science as a guiding tool--is not an easy task.
The ethics and environmental concerns regarding the sourcing of
critical minerals have generated more public awareness and bipartisan
concern. Addressing the human rights abuses and environmental harms of
critical mineral development will be essential for ensuring socially
just growth in clean energy and for reliance on many modern
technologies.
Rechargeable lithium-ion batteries for smartphones, laptops, and
electric vehicles require cobalt, which primarily comes from the
Democratic Republic of the Congo (DRC). The DRC supplies nearly 75
percent of the world's cobalt, and the ethical and social problems from
cobalt mining in the DRC are appalling, to say the least. Harvard
fellow Siddharth Kara has extensively documented the horrors and abuses
of artisanal mining, or digging by hand, in the DRC. Having visited and
researched the practices, Kara reports that more than 35,000 child
laborers are digging the cobalt out by hand while breathing in toxic
fumes and dust. They risk being buried alive by a collapsing tunnel,
yet earn only a dollar or two per day.\19\ In a recent interview with
NPR, Kara said:
---------------------------------------------------------------------------
\19\ Siddarth Kara, ``Is your phone tainted by the misery of the
35,000 children in Congo's mines?'' The Guardian, October 12, 2018,
https://www.theguardian.com/global-development/2018/oct/12/phone-
misery-children-congo-cobalt-mines-drc and Siddarth Kara, ``I saw the
unbearable grief inflicted on families by cobalt mining. I pray for
change,'' The Guardian, December 16, 2019, https://www.theguardian.com/
global-development/commentisfree/2019/dec/16/i-saw-the-unbearable-
grief-inflicted-on-families-by-cobalt-mining-i-pray-for-change
You have to imagine walking around some of these mining areas
and dialing back our clock centuries. ``People are working in
subhuman, grinding, degrading conditions. They use pickaxes,
shovels, stretches of rebar to hack and scrounge at the earth
in trenches and pits and tunnels to gather cobalt and feed it
up the formal supply chain. Cobalt is toxic to touch and
breathe--and there are hundreds of thousands of poor Congolese
people touching and breathing it day in and day out. Young
mothers with babies strapped to their backs, all breathing in
this toxic cobalt dust.\20\
---------------------------------------------------------------------------
\20\ Terry Gross, ``How `modern-day slavery' in the Congo powers
the rechargeable battery economy,'' NPR, February 1, 2023, https://
www.npr.org/sections/goatsandsoda/2023/02/01/1152893248/red-cobalt-
congo-drc-mining-siddharth-kara
---------------------------------------------------------------------------
Despite attempts to rely on ethical practices for cobalt, cross-
contamination of cobalt from artisanal mines mixed with cobalt from
industrial mining all but guarantees that unethically sourced cobalt is
moving up through the supply chain.\21\ The rampant corruption in the
DRC and the fact that the Chinese own most of the mines in the DRC
exacerbate the problem.
---------------------------------------------------------------------------
\21\ Ibid.
---------------------------------------------------------------------------
Another extremely concerning region for sourcing of critical
minerals and clean energy is China. The human rights exploitations of
Uyghur Muslim minorities and other Muslim minorities in the Xinjiang
region of China has also been well documented. The Department of Labor
(DOL) has tracked and reported on forced labor connected to many
products such as food, clothing, textiles, footwear, coal, thread/yarn,
electronics, cotton, and coal.\22\
---------------------------------------------------------------------------
\22\ U.S. Department of Labor Bureau of International Affairs,
``Against Their Will: The Situation in Xinjiang,'' https://www.dol.gov/
agencies/ilab/against-their-will-the-situation-in-xinjiang
---------------------------------------------------------------------------
DOL and many outside organizations have also reported on the
Xingjian region's connection to polysilicon, a key input for the
production of solar panels.\23\ A recent Breakthrough Institute report
estimates that 42 percent of the global solar-grade polysilicon
production capacity was in that region for 2021.\24\ This percentage
aligns closely with a May 2021 study from the Helena Kennedy Centre for
International Justice at Sheffield Hallam University that found the
Xinjiang region accounted for 45 percent of the polysilicon production
capacity in 2020.\25\ The same research team recently exposed a
connection between supply chains (mining, processing, and
manufacturing) in the auto sector and forced Uyghur labor.\26\
---------------------------------------------------------------------------
\23\ Ibid
\24\ Seaver Wang and Juzel Lloyd, ``Sins of a Solar Empire: An
Industry Imperative to Address Unethical Solar Photovoltaic
Manufacturing in Xinjiang,'' Breakthrough Institute, November 15, 2022,
https://thebreakthrough.imgix.net/Sins-of-Solar_Report_v5.pdf
\25\ Murphy, L. and Elima, N., ``In Broad Daylight: Uyghur Forced
Labour and Global Solar Supply Chains.'' Sheffield, UK: Sheffield
Hallam University Helena Kennedy Centre for International Justice.
https://acrobat.adobe.com/link/track?uri=urn%3Aaaid%3Ascds%3AUS%3
Ad360ffab-40cc-4d83-8b8b-a8bd503286a3&viewer%21megaVerb=group-discover
\26\ Murphy, L., Salcito, K, Uluyol, Y, Rabkin, M, et al, ``Driving
Force: Automotive Supply Chains and Forced Labor in the Uyghur
Region.'' Sheffield, UK: Sheffield Hallam University Helena Kennedy
Centre for International Justice, December 2022, https://
acrobat.adobe.com/link/track?uri=urn%3Aaaid%3Ascds%3AUS%3A69ce4867-
d7e7-4a6a-a98b-6c8350ceb714&viewer %21megaVerb=group-discover
---------------------------------------------------------------------------
Encouragingly, the federal government is ramping up its efforts to
block imports of products made with forced labor. In December 2021,
President Biden signed the Uyghur Forced Labor Prevention Act into law.
Last November, the U.S. Customs and Border Protection seized 1,053
shipments of solar equipment from China over slave labor concerns.\27\
---------------------------------------------------------------------------
\27\ Nichola Groom, ``Exclusive: U.S. blocks more than 1,000 solar
shipments over Chinese slave labor concerns,'' Reuters, November 11,
2022, https://www.reuters.com/world/china/exclusive-us-blocks-more-
than-1000-solar-shipments-over-chinese-slave-labor-2022-11-11/
---------------------------------------------------------------------------
In addition to the egregious human rights tragedies, there is also
economic and environmental concerns of overreliance on China for
minerals and processing. Currently, most rare earth minerals are mined
and processed in China.\28\ According to the U.S. Geological Service,
China accounted for 80 percent of the rare earth minerals imported into
the U.S. in 2020.\29\ Poor environmental standards have resulted in
contaminated water, air, and soil.\30\ Weak enforcement regarding the
storage of mining waste and wastewater has contaminated groundwater,
grasslands, and livestock. A history of illegal mining operations has
created legacy sites that pose human health and environmental risks
with no clear financial liability. While there has been some progress
in enforcing more stringent labor and environmental standards, concerns
remain and efforts in China have not gone nearly far enough.\31\
Rossetti and Banks also comment that ``it is estimated that mining and
extraction of both energy and non-energy related products in China is
2.2 times as carbon intensive as the United States, and mining support
services are 5.2 times as carbon-intensive.'' \32\
---------------------------------------------------------------------------
\28\ International Energy Agency, ``The Role of Critical World
Energy Outlook Special Report Minerals in Clean Energy Transitions,''
March 2022, https://www.iea.org/reports/the-role-of-critical-minerals-
in-clean-energy-transitions/executive-summary
\29\ U.S. Geological Survey, ``Mineral commodity summaries 2021:
U.S. Geological Survey,'' U.S. Department of Interior, 2021, https://
doi.org/10.3133/mcs2021
\30\ Jaya Nayar, ``Not So ``Green'' Technology: The Complicated
Legacy of Rare Earth Mining,'' Harvard International Review, August 12,
2021, https://hir.harvard.edu/not-so-green-technology-the-complicated-
legacy-of-rare-earth-mining/
\31\ Rodrigo Castillo and Caitlin Purdy, ``China's Role in
Supplying Critical Minerals for the Global Energy Transition,'' The
Brookings Institute, July 2022, https://www.brookings.edu/wp-content/
uploads/2022/08/LTRC--ChinaSupplyChain.pdf
\32\ Phil Rossetti and George David Banks, ``Foreign Mineral Supply
Chain Dependence Threatens U.S. National Security,'' CRES Forum, March
2022, https://cresforum.org/wp-content/uploads/2022/03/
CRES_WhitePager_CriticalMinerals_03212022_v1.pdf
While policymakers should take steps to diversify the market and
prohibit the import of products using slave labor, fully decoupling
from China is also likely unrealistic. One reason is that U.S.
companies are not solely importing the rare earth elements or oxides
but products that contain them. The processed rare earths are sent to
another country for assembly and exported to the U.S. so China would
have to restrict rare earths trade to all those countries. In many
cases, the company making the final product also resides in China.
---------------------------------------------------------------------------
Eugene Gholz, professor of political science at Notre Dame, writes:
In some cases, like the rare-earth content of Apple's iPhones,
the final assembly of the consumer product takes place in
China; to stop those rare earths from getting to U.S.
consumers, China would have to ban consumer product exports.
Perhaps the Chinese government would contemplate banning iPhone
sales in a huge trade conflagration, but at that point, access
to rare earths would be the least of America's concerns.\33\
---------------------------------------------------------------------------
\33\ Eugene Gholz, ``Here's the dirty truth about China's rare-
earths threat,'' The Washington Post, May 31, 2019, https://
www.washingtonpost.com/opinions/2019/05/31/heres-dirty-truth-about-
chinas-rare-earths-threat/
An encouraging data point worth mentioning is that China tried to
cut off rare earths to Japan a decade ago, and the rare earths markets
diversified. Prices increased, and mines opened in other countries
including Australia, Brazil, Malaysia, and Vietnam. The rare earths
mining and processing market continues to diversify. Canada's rare
earth mining project began shipping concentrated ore in May of last
year and is functioning without any tailings ponds, making it much more
environmentally friendly.\34\ Japan, through state backing, is
investing to extract an abundance of rare earths off its coast.
---------------------------------------------------------------------------
\34\ The Canadian Press, ``First Canadian rare earth mine starts
shipping concentrate from N.W.T.,'' CBC, May 23, 2022, https://
www.cbc.ca/news/canada/north/nechalacho-starts-shipping-from-nwt-
1.6462745
---------------------------------------------------------------------------
Mountain Pass mine in California re-opened, and it has a processing
facility. MP Materials, which owns Mountain Pass, ``is one of 3 percent
of mining operations--the only one in the global rare earth industry--
that recycles the water used for the process and produces dry
tailings.'' \35\ Several other mining projects and processing
facilities opened in the U.S., and many non-Chinese rare earth
processing facilities opened around the world. Market diversification
is helping to reduce dependence on China and demonstrate more
environmentally friendly ways to mine and process REEs.
---------------------------------------------------------------------------
\35\ Laura Seligman, ``China Dominates the Rare Earths Market. This
U.S. Mine Is Trying to Change That,'' Politico, December 14, 2022,
https://www.politico.com/news/magazine/2022/12/14/rare-earth-mines-
00071102
---------------------------------------------------------------------------
IV. Opportunities to capitalize on domestic mineral abundance,
diversify supply chains, promote ethical mineral sourcing, and
develop market alternatives
Many factors affect the current and future price of various clean
energy technologies such as input costs, technological innovation, the
availability of lower cost substitutes, and market efficiencies through
economies of scale--just to name a few. Cost will be a predominant
factor for the pace and scope of clean energy adoption in the United
States and around the world. For instance, electric vehicles are more
popular, and demand is up, but more than half the respondents of a
recent poll said lack of affordability was, unsurprisingly, the biggest
concern.\36\
---------------------------------------------------------------------------
\36\ ``More U.S. consumers want EVs but prices are a concern--
Deloitte survey,'' Reuters, January 4, 2023, https://www.reuters.com/
technology/more-us-consumers-want-evs-prices-are-concern-deloitte-
survey-2023-01-04/
---------------------------------------------------------------------------
Liberating the abundance of resources domestically and improving
efficiencies for private investment and research, development, and
demonstration programs will help combat rising prices for mineral
commodities, establish more secure supply chains, and diversify away
from unethically sourced minerals. American leadership in critical
mineral development and on climate change should empower innovators to
provide cleaner choices at lower prices.
Thus far, the Biden administration has taken a frustratingly
contradictory approach to procuring the minerals necessary for an
energy transition. A lithium mine project in Nevada and nickel mine
project in Minnesota, for example have faced permitting hurdles. Julie
Padilla, the chief regulatory officer for Twin Metals Minnesota
testified, ``We can mine here better than anywhere else in the world.
But the United States will not be able to do that under the current
regulatory process that is unpredictable, subject to political
manipulation with changing rules in each administration, and in
conflict with the priorities of our nation.'' \37\ The more the U.S.
and other developed countries extract their own resources, the fewer
minerals they will need to import from countries that have lax
environmental standards and use morally unconscionable labor practices.
At a minimum, domestic mining proposals should be granted a rigorous
environmental review process rather than be placed off limits before
any review is conducted.
---------------------------------------------------------------------------
\37\ Press release, ``Twin Metals Testifies at U.S. Senate
Committee on Energy and Natural Resources Hearing on Urgency of
expanding Domestic Mining,'' Twin Metals Minnesota, March 31, 2022,
https://www.twin-metals.com/press-release/twin-metals-testifies-at-u-s-
senate-committee-on-energy-and-natural-resources-hearing-on-urgency-of-
expanding-domestic-mining/
---------------------------------------------------------------------------
In addition to adding layers of red tape and blocking projects,
President Biden's use of the Defense Production Act (DPA) is also
misguided. Using the DPA not only sidesteps the necessary system
reforms but sets a dangerous precedent to have the government usurp the
role of competitive markets.\38\ Eugene Gholz also warns that, ``US
government investments using the Defense Production Act to create still
more rare earth production capacity would add to this glut.
---------------------------------------------------------------------------
\38\ Eli Lehrer, ``President Biden's Defense Production Act power
grab,'' The Hill, April 9, 2022, https://thehill.com/opinion/national-
security/3262612-president-bidens-defense-production-act-power-grab/
---------------------------------------------------------------------------
The government investment could even drive the privately funded,
already-operating US mine out of business again.'' \39\
---------------------------------------------------------------------------
\39\ Eugene Gholz, ``The rare earths industry can weather any
Chinese trade battle,'' CNN, July 23, 2019, https://www.cnn.com/2019/
07/23/perspectives/rare-earths-china-argentina-trade-war/index.html
Upstream mining and refining have been identified as a challenge to
meet the objectives targeted in the infrastructure bill and the Biden
administration's climate targets.\40\ Several private sector-led
initiatives are at various stages of development to increase resource
development, processing, and recycling.\41\ Companies and investors are
also exploring substitutes and alternatives to critical minerals.
Easing supply chain constraints and securing processed minerals will
best be achieved by opening domestic and international markets to
extraction, processing, and trade. Modernizing permitting processes
should put America on par with countries like Canada and Australia that
unleash energy abundance while maintaining rigorous environmental
safeguards and input from communities.\42\
---------------------------------------------------------------------------
\40\ Camille Erickson, ``Infrastructure bill challenged by dearth
of US upstream mining, refining,'' S&P Global Market Intelligence,
November 10, 2021, https://www.spglobal.com/marketintelligence/en/news-
insights/latest-news-headlines/infrastructurebill-challenged-by-dearth-
of-us-upstream-mining-refining-67508084
\41\ Alex Fitzsimmons, ``Time to Build a Domestic Critical Minerals
Supply Chain,'' ClearPath, October 21, 2021, https://clearpath.org/our-
take/time-to-build-a-domestic-critical-minerals-supply-chain/
?gclid=CjwKCAiAuOieBhAIEiwAgjCvcqsyySUdaKtCmZeOMjwNGyJSeYSgN2M9kDgoSFY
X_cy_CK5H70_krRoCOLIQAvD_BwE
\42\ Minerals Make Life, ``Delays in the U.S. Mine Permitting
Process Impair and Discourage Mining at Home,'' National Mining
Association, May 2021, https://nma.org/wp-content/uploads/2021/05/
Infographic_SNL_minerals_permitting_5.7_updated.pdf
---------------------------------------------------------------------------
Policymakers should:
Strengthen partnerships with the private sector and with
allied countries to ensure that critical minerals are
ethically and responsibly sourced. While challenging, more
stringent verification of ethically sourced minerals is
imperative and should help reduce human rights abuses,
reduce dependence on corrupt, unethical actors, and develop
a more responsibly sourced critical mineral supply chain.
Expedite permitting for natural resource extraction and
energy projects and infrastructure. Modernizing the
National Environmental Policy Act would significantly
improve the permitting process for energy security,
capitalizing on America's abundance of natural resources
and diversifying America's energy sources. Importantly,
sensible resource development in the U.S. and in allied
countries would have a smaller environmental and climate
footprint. Congress should also Prohibit both pre-emptive
and retroactive vetoes under Section 404 of the Clean Water
Act.
Open opportunities for state-led environmental reviews and
permits. Empowering states to conduct the environmental
review and permits could create more efficient and
localized reviews that better address the needs of local
communities. State regulators could acquire technical
expertise from the Federal Energy Regulatory Commission,
the Bureau of Land Management, and the Environmental
Protection Agency as necessary.
Work with the private sector to maximize the efficiency of
money allocated for research, development, and
demonstration included in the Infrastructure Investment and
Jobs Act (IIJA). IIJA includes National Science Foundation
grants for basic research on domestic critical minerals
mining and recycling, $320 million for the U.S. Geological
Survey for its Earth Mapping Resources Initiative, and $140
million to build a Rare Earth Demonstration Facility.
Continue research and development for critical minerals
recycling that can turn mine waste into useful products and
provide research and development support for developing
substitutes for critical minerals. For instance, the
Department of Energy's Advanced Research Projects Agency-
Energy (ARPA-E) Mining Innovations for Negative Emissions
Resource Recovery (MINER) program could help unlock
breakthrough technologies that supply economically feasible
alternatives to critical minerals.\43\
---------------------------------------------------------------------------
\43\ Press release, ``DOE Announces $39 Million for Technology to
Grow the Domestic Critical Minerals Supply Chain and Strengthen
National Security,'' The Department of Energy, October 27, 2022,
https://www.energy.gov/articles/doe-announces-39-million-technology-
grow-domestic-critical-minerals-supply-chain-and
Maintain openness to alternative mining sources. The ocean
floor contains nodules that are rich in minerals that can
be used for batteries, renewable energy and defense
technologies. The nodules can effectively be scooped up
from the ocean floor and the deep ocean (down to 20,000
feet). There is no actual mining, extraction, or tailings
associated with deep seabed mining, and studies have shown
the climate and environmental impact is far smaller than
the conventional mining of minerals. While it is critical
to understand the ecological and environmental risks and
impacts of deep seabed mining, it is also important to
evaluate the trade-offs between the various ways to extract
and refine minerals. More collaboration among companies,
coastal countries, and scientists should establish a
transparent, science-based assessment of seabed mining.\44\
---------------------------------------------------------------------------
\44\ Cecilia Jamasmie, ``Extracting battery metals from seafloor
may beat traditional mining--study,'' Mining.com, April 22, 2020,
https://www.mining.com/extracting-battery-metals-from-seafloor-beats-
traditional-mining-study/ and Daina Paulikas, ``Life cycle climate
change impacts of producing battery metals from land ores versus deep-
sea polymetallic nodules,'' Journal of Cleaner Production, Vol. 275,
No. 123822, December 1, 2020, https://www.sciencedirect.com/science/
article/pii/S0959652620338671?via%3Dihub and Christina Jovanovic,
``Precious and Few: Solving Renewable Energy's Critical Minerals
Problem,'' LSU Journal of Energy Law and Resources, Vol. 9, Issue 1,
Winter 2021, https://digitalcommons.law.lsu.edu/cgi/viewcontent.
cgi?article=1204&context=jelr
Maintain energy source and technology neutrality. The
critical minerals that the economy relies on today may look
much different in 20 or 30 years. Breakthrough technologies
could make certain critical minerals much less valuable if
companies develop an economically competitive alternative.
If government policy tips the scale toward specific mature
technologies, it will be that much more difficult for
innovators to disrupt the market. To the extent government
provides any subsidies, technology neutrality will generate
more efficient outcomes. Congress should also narrow
government procurement and purchase of rare earth elements
---------------------------------------------------------------------------
to Department of Defense and national security needs.
______
Dr. Gosar. Thank you, Mr. Loris.
We have been joined by the Ranking Member for the Full
Committee. He is now recognized.
STATEMENT OF THE HON. RAUL M. GRIJALVA, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ARIZONA
Mr. Grijalva. Thank you, Mr. Chairman, and other than to
congratulate you and the Ranking Member on the positions, a
very important Committee, and associate myself with the Ranking
Member's opening remarks--I thought you said it much better
than I could--and to just put in the hopper that I don't think
we can look at this regulatory side and permitting side in
terms of what needs to be done there, relative to mining and
critical minerals without overlapping on that 1872 mining law,
which many of the controversies that are occurring, not only in
my state but across the country, are in relationship to how
that law is not working for these times.
With that, let me yield back, and thank you very much.
Dr. Gosar. I thank the gentleman from Arizona. The Chair
now recognizes Dr. Moats for 5 minutes.
STATEMENT OF MICHAEL MOATS, PROFESSOR AND DEPARTMENT CHAIR OF
MATERIALS SCIENCE AND ENGINEERING, MISSOURI UNIVERSITY OF
SCIENCE AND TECHNOLOGY, ROLLA, MISSOURI
Dr. Moats. Thank you, Chairman Gosar, Ranking Member
Stansbury, and distinguished members of the Subcommittee. I
thank you for the opportunity to speak before you today on this
important topic related to critical minerals.
My name is Mike Moats, and I am a Professor of
Metallurgical Engineering, the Chair of Materials Science and
Engineering at Missouri University of Science and Technology. I
have 30 years of experience as an extractive metallurgist. I
have worked with many of the mining companies and metal
producers in our country and abroad, and I offer you my
experience and my observations from how to actually produce
metals.
As you know, critical minerals are very important to modern
lives. We have already talked about the importance of what it
is in the cell phone. We often focus on the battery minerals
and the rare earths, but if you don't have gallium, you don't
have WiFi; if you don't have indium, you don't have the touch
screen; if you don't have tellurium, you don't have your solar
panels. There is a lot more to it than just the battery
minerals and the rare earths that are often talked about in the
news.
USGS produced their updated list in 2022. There are 50
critical minerals. We use 87 elements on the periodic table for
manufacturing; 50 of them are on a critical mineral list. This
shows you the dire straits that our country is facing because
of our lack of production.
I appreciate Ranking Member Stansbury's comments this
morning because, over my career, over my lifetime, I have
watched the United States decline. We were once a metal mining
powerhouse, and now we are not. I work with a lot of mining
companies, and I have watched smelters and refineries close
down. And we need to reverse course.
Over the last 30 years, China has built 40 copper smelters.
They will build another four in the next few years, and this is
only to meet internal demand. They now produce 11 million tons
of copper every year; the United States produces 2.
If you produce the copper, if you refine the copper, you
control the tellurium. Many of our critical minerals are by-
products. If you control the zinc production, you control the
germanium which is needed for integrated circuits for
satellites and the indium. If you control the aluminum--which
they now control 40 percent of the world's production, and they
produce over 40 million tons of aluminum, relative to our less
than 1 million--you control gallium.
It is not even on the critical mineral list, but steel
production is essential for all of modern life. We produce
about 82 million tons in the United States. Over two-thirds of
that comes from recycling. The Chinese now produce 990 million
tons of steel every year. That is enough to produce 14,000
Nimitz-class aircraft carriers every year.
While not all steel goes into aircraft carriers, what I am
very concerned about is the fact that all of those plants that
produce lead, zinc, copper, and steel, that are not on our
critical mineral lists--some are--they are going to come out of
their country. And when they do that, they are going to flood
the world. And are we, as a country, going to do things to
protect the plants that we need to produce the raw materials
for our feedstocks?
As we look at what has happened around the world, our
plants, our mines, our facilities have declined, and the
companies are trying the best they can. And again, as Ranking
Member Stansbury--I think you had excellent comments--they are
just not economical. Why? Because other countries are not
playing on the same playing field as we are.
We need to level the playing field for our corporations to
make money and do the right thing. And they will. I work with
many of them. They are on the cutting forefront of
environmental responsibility. They live in the same communities
that they produce in, and they want to do the right things. It
is just hard to make money in this environment.
So, with that, I would also like to point out that, if you
are going to build these plants, if you are going to build
these mines, if you are going to build these recycling
facilities, you need the workforce. Just like the plants have
been under-funded, so have the universities and some of the
community colleges.
We need not only really talented engineers, which, of
course, I would be happy to produce for you, but we also need
the tradesmen. I can tell you that most plants and most mines
are mostly concerned about who is going to run the haul truck,
who is going to put the pipe on, who is going to do the
welding. We need to focus on the trades, as well as the
engineers who are going to develop all of these things that you
want to innovate.
We need to look at how to create more value out of our
existing operations in the short term, while looking at new
deposits and new opportunities to expand our production of
these critical minerals and all minerals and all metals in the
United States. Thank you.
[The prepared statement of Dr. Moats follows:]
Prepared Statement of Dr. Michael S. Moats, Professor and Chair of
Materials Science and Engineering, Thomas J. O'Keefe Institute for the
Sustainable Supply of Strategic Minerals, Missouri University of
Science and Technology
Chairman Gosar, Ranking Member Stansbury, and distinguished members
of the Subcommittee. Thank you for the opportunity to appear before you
today for this important hearing, ``Dependence on Foreign Adversaries:
America's Critical Minerals Crisis.''
My name is Michael Moats, and I am a professor of metallurgical
engineering and chair of the Materials Science and Engineering
department at Missouri University of Science and Technology. I have
dedicated my career to the production of metals, developing technology
to improve these processes and educating engineers. I offer my insights
gained over 30 years in industry and academia. I have worked in
industry for public and private corporations that serve the mining and
metal production industries. In academia, I have worked for the
University of Utah and now am a faculty/administrator at Missouri
University Science and Technology. Today, I offer my own opinion and
views, and not those of past or current employers.
Importance of Critical Minerals
Critical minerals are elements or compounds that have been deemed
by the United States government to pose a significant risk in terms of
supply and impact on our country. The United States Geological Survey
(USGS) has been tasked with maintaining the critical mineral list which
was last published in 2022.\1\ The critical mineral list is created
through an analysis of three criteria: (1) the likelihood of a supply
disruption, (2) the impact to the nation's economy and defense if a
supply disruption occurs, and (3) if there is a significant supply risk
existing. Of the 87 elements that are used for manufacturing, 50 are on
the list! This fact alone reveals the dire situation that our country
faces in terms of raw material supply as we are dependent on foreign
countries, some of which are adversaries.
---------------------------------------------------------------------------
\1\ ``2022 Final List of Critical Minerals'', Federal Register, pp.
10381-10382, 02/24/2022.
---------------------------------------------------------------------------
The importance of critical minerals can be seen in the modern
devices that are important to all Americans. Gallium in the form of
gallium arsenide phosphide and gallium nitride are essential for
integrated circuits (semiconductor chips), laser diodes, light emitting
diodes (LED)s, and radio frequency (RF) cellular used in smartphones.
Tellurium is used in cadmium telluride, which is a high-efficiency
solar collector utilized on 50% of the grid scale solar arrays in the
United States and is combined with bismuth to produce thermal imaging
night vision optics for civilian and military use. Indium is
principally used as indium tin oxide in most flat panel displays and is
growing in use in 5th generation (5G) fiber optic communications. Each
of these critical minerals is captured during the processing of base
metals. They are not mined and produced for their value alone.
Therefore, the country that dominates base metal production controls
the market for these minor tonnage elements.
Chinese Dominance in Base Metal Production
I was born in 1970. In that year, the United States was a mining
and metal producing powerhouse. The nation produced the majority of its
metal needs. We produced 31% of the world's alumina, 35% of the lead,
23% of the copper, and 17% of the world's zinc.\2\ While the 1970s was
a time of energy crises and concerns over foreign oil dependence, metal
production did not worry our nation. A snapshot of U.S. non-ferrous
mining and metal production is provided in Figure 1.
---------------------------------------------------------------------------
\2\ Bureau of Mines/Minerals yearbook: Metals, minerals, and fuels,
Volume 1 (1970)
Figure 1.--U.S. copper, zinc, lead and alumina/aluminum production in
1970
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Bureau of Mines/Minerals yearbook: Metals, minerals, and fuels,
Volume 1 (1970)
However, the seeds of decline were sown during that decade which
would impact domestic metal production for years to come and eventually
result in American dependence on the world to supply many of the metals
needed for modern living. Many countries invested in new or upgraded
metal production facilities that met heightened environmental
standards. This did not occur in the United States. Many U.S. smelters
and refiners could not compete economically against these newer
facilities due to pressures to upgrade their plants to meet tighter
environmental standards and declining ore grades at local mines. The
1980s and 1990s witnessed the closure of primary and secondary smelters
leading to consolidation within the industry, which resulted in few
companies willing to invest in their operations to potentially meet
domestic demand. By 1995, the U.S. was producing 33% less alumina and
33% less zinc as compared to 1970. Due to a significant technology
advancement pioneered in Arizona, copper production increased by 44%
from 1970 to 1995.\3\ That advancement was an outcome of research on
separation processes developed for uranium production with funding from
the Department of Energy.
---------------------------------------------------------------------------
\3\ USGS National Minerals Information Center's Mineral Commodity
1996 Yearbook
---------------------------------------------------------------------------
While the United States seemed content to outsource its metal
production, China executed a different plan. This resulted in
significantly different outcomes between 1995 and 2022. Figures 2-6
offer visual comparisons of mining and metal production for copper,
zinc, lead, aluminum and steel in 1995 and 2022 for the United States
and China.\4\
---------------------------------------------------------------------------
\4\ USGS National Minerals Information Center's Mineral Commodity
Summaries and Yearbooks, 1995 and 2023.
---------------------------------------------------------------------------
Over the past 27 years, the United States lost 30% of its copper
mining capacity and 57% of its copper metal production (Figure 2).
Meanwhile, China built 40 copper smelters and is presently planning to
build four more to meet its internal demand.\5\ This resulted in
Chinese copper production increasing by 1570 percent! While Chinese
copper mining has increased, most of China's copper is mined elsewhere
(e.g., Chile and Peru) and shipped as mineral concentrate. The Chinese
mineral demand to feed its smelters and refineries occurs in several
metal supply chains resulting in a ``Mine for China'' phenomenon that
has swept through developing countries with mineral resources. China
now produces 42% of the world's refined copper, while the United States
produces only 4%.
---------------------------------------------------------------------------
\5\ Based on information made by Wang Wei (NFSoc) during his
presentation ``Development of copper metallurgy technology in China''
on November 16, 2022, at the Copper 2022 Conference in Santiago, Chile.
---------------------------------------------------------------------------
In 1995, the United States and China mined and smelted similar
tonnages of zinc (Figure 3). During the past 27 years, China has
increased its zinc production by 580% and now produces 45% of the
world's zinc. Meanwhile, U.S. production has declined 63% and only
accounts for 2% of the world's zinc. Zinc was added to the 2022
Critical Mineral list by the USGS.
Lead mining and metal production declined in the United States by
28% and 21% from 1995 to 2022 (Figure 4). Domestic lead metal
production has shifted completely to recycling with the last primary
smelter in Herculaneum, Missouri, closing in 2013. Lead mining,
smelting and battery production provides a $2.3 billion impact on the
Missouri economy \6\ and is still critical for all automobiles
including EVs.\7\ Again, while the U.S. lead production declined,
Chinese production expanded dramatically. Between 1995 and 2022, China
expanded in lead mine and metal production by 465% and 1210%,
respectively! China now produces 44% of the world's lead.
---------------------------------------------------------------------------
\6\ Doe Run Company Fact Sheet. Downloaded on 1/31/2023 from
https://doerun.com/wp-content/uploads/2021/03/2021_Doe_Run-
Economic_Impact-Fact_Sheet-08.pdf
\7\ ``How lead batteries could make EVs safer'', World Economic
Forum, Aug 9, 2021.
---------------------------------------------------------------------------
Figure 2.--Changes in copper mine and metal production from 1995 to
2022 for the United States and China
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Figure 3.--Changes in zinc mine and metal production from 1995 to
2022 for the United States and China
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Figure 4.--Changes in lead mine and metal production from 1995 to
2022 for the United States and China
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
.epsSimilar expansions and dominance in Chinese production of
aluminum and steel also occurred (Figures 5 and 6). Steel and aluminum
are two of the major building materials for human civilization. They
are critical for infrastructure, transportation, and defense. While
``critical minerals'' like rare-earths and battery metals have garnered
headlines and grabbed the attention of many, the astonishing production
increases by the Chinese in alumina, aluminum and steel have completely
re-shaped the world's metal markets.
In alumina and aluminum, the Chinese have increased their
production by 3450% and 2100% in the past 27 years! They now produce
54% and 58% of these materials needed for lightweight transportation,
construction, consumer goods and military applications. At the same
time, the U.S. production has decreased by 74% in both alumina and
aluminum. Aluminum is considered a critical mineral by the United
States.
Figure 5.--Changes in alumina and aluminum production from 1995 to 2022
for the United States and China
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
.epsChina dominates the world's steel production with a staggering
990 million metric tons produced in 2022 (54% of the world's total).
China's steelmakers have increased their outputs by 1100% from 1995 to
2022. China now produces enough steel each year to produce 14,000
Nimitz class aircraft carriers. Again, while China expanded, the United
States struggled to maintain its steel mills and declined by 14% over
the same period.
Figure 6.--Changes in steel production from 1995 to 2022 for the United
States and China
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Chinese Dominance in Critical Minerals from Base Metal Production
A consequence of Chinese base metal dominance is its control of
minor by-products that are captured during refining. Many of these by-
products populate the U.S. Critical Mineral list.\8\ Gallium, needed
for advanced electronics, is recovered from alumina production.
Tellurium, used in high efficiency solar panels and military grade
night vision optics, is collected during copper refining. Indium, used
in touch screens, is produced from zinc refining. Chinese dominance in
several non-rare earth critical elements captured during base metal
processing and refining are summarized in Table 1.
---------------------------------------------------------------------------
\8\ ``2022 Final List of Critical Minerals'', Federal Register, pp.
10381-10382, 02/24/2022.
Table 1.--Chinese Percentage of the World's Primary Production for
---------------------------------------------------------------------------
Gallium, Tellurium, Indium and Germanium
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
United States Metal Needs Examined
Inherent to analyses and discussions related to metal production is
what are the needs of the United States. Using data from the USGS
(2018-2021), a comparison of mining and metal production that occurs in
United States, Canada and Mexico to U.S. Consumption for aluminum,
copper, zinc, lead and nickel is presented in Table 2.
Table 2.--Mining and metal production of five metals compared to U.S.
consumption (1000s metric tons)
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
These data indicate that through recycling (secondary), the
U.S. can produce most of the aluminum it consumes and Canada with its
``aluminum valley'' can supply higher purity metal as needed. The
United States is completely dependent on mining of bauxite (aluminum
ore) that occurs in other countries. There appears to be a deficit in
copper, zinc and lead metal production in the United States as compared
to our mining. The country exports mineral concentrates of copper, zinc
and lead and then imports refined metal. This results in losses in jobs
and critical mineral production. Existing smelters could be expanded,
or new ones constructed. The United States relies on its allies for
copper, zinc, and lead metal production.
I have tried to avoid a discussion of battery metals and rare
earths to this point because these elements seem to dominate the news
and government focus. In short, the data shown in Table 2 reveal that
the U.S. produces zero tons of primary nickel metal. The same is true
for cobalt metal and rare earths. The U.S. is entirely dependent on
other countries for these refined metals. Rare-earth, nickel and cobalt
mining does occur in the United States, but not to the level needed for
our consumption. Rare-earth mining and production including magnets is
controlled by China and the U.S. has no refining capacity. Chinese
companies have acquired many of the cobalt mines in Central Africa and
refined the materials in China, so they control this critical element
as well.
Closing Remarks
When I chose to pursue a Ph.D. in extractive metallurgy in 1995, I
was warned by senior colleagues to select a different field of study.
They warned I would chase ever decreasing research budgets and
opportunities. For most of the past 27 years, this has been true. In
the past few years, the U.S. federal government has awoken to the
problems we face in metal production. The difficulties caused by the
global pandemic and heightened geopolitical tensions have only
increased federal concerns.
Federal funding is needed to overcome the uneven playing field
caused by China's massive build-up of its metal producing capacity.
Funding is also needed to ensure all existing smelters, refineries and
mills are updated to maintain their international competitiveness. If
the United States does not reverse the trends in metal production, we
will continue to depend on others for our economy and defense which has
increasing become controlled by current or potential adversaries.
In the past few years, I have studied critical minerals in base
metal supply chains and have been helping domestic metal producers to
develop processes to capture critical minerals. Projects to recover
more tellurium, gallium, germanium, indium, nickel, and cobalt from
U.S. resources are on-going. I have provided input into federal policy
discussions and project selection. I have participated in the annual
critical minerals workshop at Missouri S&T sponsored by the National
Science Foundation to connect and engage researchers and industry.
There is still significant work to be done to create process to recover
critical minerals from domestic sources.
Universities focused on mining and metallurgy are doing our part,
but we have suffered from underfunding for decades like the U.S. metal
production facilities. As the country looks to onshore mining and metal
production, highly trained personnel will be needed to design, build
and operate these mines, smelters and refineries. Federal assistance to
support the remaining mining and metallurgy schools is much needed.
In closing, I wish to thank the subcommittee for this opportunity
to present information on the implications of depending on our foreign
adversaries for critical minerals, and why it is imperative that we
work to solve America's critical minerals crisis. I hope the data and
analysis that I presented before you today will help to inform policy
discussions regarding the importance of critical minerals. Thank you
for the opportunity to testify and I look forward to any questions you
may have.
______
Dr. Gosar. Thank you, Dr. Moats.
The Chair now recognizes Mr. Mintzes for 5 minutes.
STATEMENT OF AARON MINTZES, SENIOR POLICY COUNSEL, EARTHWORKS,
WASHINGTON, DC
Mr. Mintzes. Thank you, Mr. Chairman.
Chairman Gosar, Ranking Member Stansbury, members of the
Subcommittee, thank you for the opportunity to testify before
you on reducing America's dependence on irresponsibly sourced
minerals.
My name is Aaron Mintzes. I am with Earthworks, a non-
profit organization dedicated to protecting communities and the
environment from mineral impacts, while supporting the just,
equitable, and rapid transition to renewable energy.
I would like to just adopt the Westerman-Stansbury approach
about we can't permit or mine our way out of this crisis.
Improving minerals supply chains means fixing the weaker links.
The common misconception is that mining is the weaker link.
Instead, we need to build stronger links of circular economy
infrastructure in the midstream and end of life management for
battery materials, cell phone materials, as well.
The best way to meet this demand is to invest in facilities
and methods to recycle, refurbish, reuse, and substitute the
minerals we already have. The President's supply chain
Executive Order, the Infrastructure Law, and the Inflation
Reduction Act are making important strides toward opening
access to recycled materials and reducing our dependence on
mined minerals.
Currently, the circular economies for mostly allied nations
produce and help supply the markets for recycled materials. The
United States remains years behind Asia's and Europe's circular
economy infrastructure.
Last month, the European Union finalized their battery
directive. Soon, batteries of the EU will come with a traceable
QR code known as a battery passport: recycled content
requirements, producer responsibility, and supply chain due
diligence. Research indicates that, with the right policies in
place like these, we can create a more circular economy that
may approximately have global demand for certain mined minerals
like cobalt, lithium, nickel, key to the clean energy
transition.
Even greater reductions, up to 90 percent for lithium, are
achievable through investments in mass transit and better
battery design.
As the market for secondary use of these materials matures,
this further reduces the pressure to source from new mines.
Government procurement and consumer pressure both play
important roles in driving innovation, driving incentives
toward more responsible material sourcing.
Major consumers, including automakers and electronics
companies, have directed their suppliers to source more
responsibly by committing to the Initiative for Responsible
Mining Assurance, or IRMA, which independently audits and
certifies environmental and social performance at mines.
We acknowledge the importance of supply chain security in
certain minerals. However, we challenge the notion that our
public lands agencies could or even should resolve the
geopolitics of highly specialized internationally-traded
commodities. While domestic mines will source some raw
materials, the task of managing supply chains has almost
nothing to do with mining.
Congress designated that task to the agencies of the
Critical Minerals Consortium, with well-established tools for
managing that task. Those include authorities to stockpile
minerals, impose trade restrictions, negotiate agreements,
promote research development workforces, discover alternatives.
They blend tradecraft and statecraft with engineering, R&D, all
to reduce risk of supply disruptions and improve environmental
outcomes.
As the U.S. Government pursues these strategies, we urge
agencies to require operators perform due diligence across
their supply chains in accordance with internationally accepted
standards. In particular, we call on the Biden administration
to uphold Indigenous people's rights to self-determination and
right to free, prior, and informed consent.
No solution is perfect. Even with more robust material re-
use and collection, new hardrock mines on public lands will
provide materials. However, mining public lands under a law
explicitly designed for settler colonialism only furthers
environmental injustice, and puts inequitable transition out of
reach. Legislative and regulatory reform can create more
responsible domestic mining policies that put protections for
communities at the forefront.
In conclusion, Earthworks strongly supports immediately
transitioning to a justly-sourced renewable energy economy to
prevent further disruption from the climate crisis. Thank you
very much.
[The prepared statement of Mr. Mintzes follows:]
Prepared Statement of Aaron Mintzes, Senior Policy Counsel, Earthworks
Chairman Gosar, Ranking Member Stansbury, and Members of the
Subcommittee:
Thank you for the opportunity to testify before you on reducing
America's dependence on irresponsibly sourced materials. Please accept
this testimony on behalf of Earthworks, a nonprofit organization
dedicated to protecting communities and the environment from mineral
impacts, while supporting the clean, just, equitable, and rapid
transition to renewable energy.
Building Domestic Circular Economy Infrastructure to Responsibly Secure
Energy Transition Materials
Improving supply chains for energy transition materials means
fixing the weaker links. The common misconception is that mining is the
weak supply chain link. Instead, we need to build stronger links of
circular economy infrastructure in the midstream and end-of-life
management of energy transition materials. The best way to meet demand
is to vest in facilities and methods to recycle, refurbish, reuse, and
substitute the materials we already have.
The President's America's Supply Chains Executive Order, the
Infrastructure Investment in Jobs Act (IIJA), and the Inflation
Reduction Act are making important strides toward opening access to
recycled materials and reducing our dependence on mined minerals.
Currently, the circular economies from mostly allied nations produce
and help supply markets for recycled materials. The United States
remains years behind Asia's and Europe's circular economy
infrastructure to supply our demands for responsibly sourced energy
transition materials.
Last month, the European Union finalized their Battery
Directive.\1\ This regulation establishes the key suite of standards to
responsibly secure supplies for energy transition materials. Batteries
sold in the EU market will come with a traceable QR code/label known as
a battery passport and requirements for recycled content, extended
producer responsibility, and supply chain due diligence. These are
similar to the standards a California state working group recommended
to their legislature \2\ as well as what IIJA directed the Department
of Energy grants to consider.\3\
---------------------------------------------------------------------------
\1\ Please see https://data.consilium.europa.eu/doc/document/ST-
5469-2023-INIT/en/pdf
\2\ Please see Lithium-ion Car Battery Recycling Advisory Group
Final Report. Prepared by CalEPA and UC Davis, March 16, 2022.
Available at: https://calepa.ca.gov/wp-content/uploads/sites/6/2022/05/
2022_AB-2832_Lithium-Ion-Car-Battery-Recycling-Advisory-Goup-Final-
Report.pdf
\3\ Please see IIJA, Public Law 117-58, Sections 40207, 40208, and
40209.
---------------------------------------------------------------------------
Research indicates that with the right policies in place, we can
create a more circular economy that may approximately halve global
demand for certain minerals, like cobalt, lithium, and nickel, key to
the clean energy transition.\4\ As the market for secondary use of
materials from electric vehicle batteries matures, this further reduces
pressure to source from new mines.
---------------------------------------------------------------------------
\4\ Please see Dominish, E., Florin, N., Wakefield-Rann, R.,
(2021). Reducing new mining for electric vehicle battery metals:
responsible sourcing through demand reduction strategies and recycling.
Report prepared for Earthworks by the Institute for Sustainable
Futures, University of Technology Sydney.
---------------------------------------------------------------------------
In addition to policy fixes, the US Government has several tools
available to enhance material supply chain security and reduce pressure
to source from irresponsible mines. Government procurement and consumer
pressure both play important roles driving incentives and innovation in
more responsible material sourcing. Major consumers, including
automakers and electronics companies, have also directed their
suppliers to source more responsibly. Some have committed to the
Initiative for Responsible Mining Assurance (IRMA), which independently
audits and certifies environmental and social performance at mines.\5\
---------------------------------------------------------------------------
\5\ Please see responsiblemining.net
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America's Critical Mineral Industrial Complex Designed to Reduce Supply
Chain Disruption
We acknowledge the importance of supply chain security in certain
materials. However, we challenge the notion that our public lands
agencies should, or even could, resolve the geopolitics and economics
of specialized, internationally-traded commodities. While domestic
mines will source some raw materials, the task of managing supply
chains has almost nothing to do with mining. Congress designated that
task to other agencies, aside from those managing public lands, with
well-established tools to reduce supply chain risk, including for
energy transition materials.
The Energy Policy Act of 2020 and IIJA directed the Departments of
Commerce (DOC), Defense (DOD), Energy (DOE), State (DOS), Interior's
United States Geological Survey (USGS), and other agencies to build a
vast critical minerals consortium.\6\ Congress has repeatedly provided
these agencies with broad authorities to stockpile minerals, impose
trade restrictions, negotiate agreements, promote research, develop
workforces, and discover alternatives. They blend tradecraft and
statecraft with engineering, research, and development to reduce a
material's criticality. Often, this means finding substitutes,
diversifying supply, imposing trade restrictions, or increasing
recycling, reuse, and collection. President Biden's America's Supply
Chains Executive Order, with support from the 117th Congress, uses
three main strategies to manage supply chain risks in energy transition
materials.\7\
---------------------------------------------------------------------------
\6\ See Consolidated Appropriations Act of 2021, Public law 116-260
Sections 7001 IIJA Public law 117-169 Sections 40201-40211
\7\ Please see White House's 100 Day Reviews under Executive Order
14017 (June 2021). Available at: https://www.whitehouse.gov/wp-content/
uploads/2021/06/100-day-supply-chain-review-report.pdf
1. Lowering geopolitical risk of a supply chain disruption by
---------------------------------------------------------------------------
diversifying sources;
2. Secondary recovery of materials from oil, gas, and mine waste;
and
3. Materials recycling, reuse, design, substitution, and building a
circular economy
To diversify sources, in March 2022, the Biden Administration
invoked the Defense Production Act to secure a reliable supply chain
for five minerals used in batteries that power electric vehicles and
other clean energy infrastructure.\8\ The Defense Department has also
vested in mining and mineral processing projects in California,\9\
Texas,\10\ and Idaho.\11\ Last year, Congress provided DOD $1 billion
in the FY 23 NDAA for their National Defense Stockpile.\12\ The State
Department has engaged in diversifying sources through their Mineral
Security Partnership,\13\ Energy Resources Governance Initiative,\14\
Clean Energy Resources Advisory Committee,\15\ and USAID's ``Green
Minerals'' Challenge,\16\ to name a few.
---------------------------------------------------------------------------
\8\ Please see Presidential Determination No. 2022-11 of March 31,
2022. (87 Fed. Reg. 19775, April 6, 2022). The order refers to lithium,
cobalt, nickel, graphite, and manganese.
\9\ Please see Press Release (February 22, 2022) DoD awards $35
million to MP Materials to Build U.S. Heavy Rare Earth Separation
Capacity. Available at: https://www.defense.gov/News/Releases/Release/
Article/2941793/dod-awards-35-million-to-mp-materials-to-build-us-
heavy-rare-earth-separation-c/
\10\ Please see Press Release (February 1, 2021) DOD Announces Rare
Earth Element Award to Strengthen Domestic Industrial Base. Available
at: https://www.defense.gov/News/Releases/Release/Article/2488672/dod-
announces-rare-earth-element-award-to-strengthen-domestic-industrial-
base/
\11\ Please see Press Release (December 19, 2022) DoD Issues $24.8M
Critical Minerals Award to Perpetua Resources. Available at: https://
www.defense.gov/News/Releases/Release/Article/3249350/dod-issues-248m-
critical-minerals-award-to-perpetua-resources/
\12\ Please see Congressional Research Service: FY 2023 NDAA
National Defense Stockpile. Available at: https://
crsreports.Congress.gov/product/pdf/IN/IN12041
\13\ Please see Media Note (September 22, 2022): Minerals Security
Partnership Convening Supports Robust Supply Chains for Clean Energy
Technologies. Available at: https://www.state.gov/minerals-security-
partnership-convening-supports-robust-supply-chains-for-clean-energy-
technologies/
\14\ Please see State Department ERGI fact sheet, available at:
https://www.state.gov/wp-content/uploads/2019/06/Energy-Resource-
Governance-Initiative-ERGI-Fact-Sheet.pdf
\15\ Please see Media Note (March 18, 2022) Inaugural Meeting of
the Clean Energy Resources Advisory Committee. Available at: https://
www.state.gov/inaugural-meeting-of-the-clean-energy-resources-advisory-
committee/
\16\ Please see Press Release (November 15, 2022) USAID Calls for
Innovators to Counter Corruption in the Green Minerals Industry.
Available at: https://www.usaid.gov/news-information/press-releases/
nov-15-2022-usaid-calls-for-innovators-to-counter-corruption-in-the-
green-minerals-industry
---------------------------------------------------------------------------
As the US Government diversifies supply chains for energy
transition materials, we urge agencies to require due diligence in
accordance with internationally accepted standards. In particular, we
call on the State Department and other agencies to uphold Indigenous
Peoples' rights with explicit mention of their right to self-
determination and right to Free Prior and Informed Consent (FPIC), as
described in the United Nations Declaration on the Rights of Indigenous
Peoples (UNDRIP) \17\ and the International Labour Organization
Convention 169 (ILO 169).\18\ While voluntary standards do not
substitute for required due diligence, multi-stakeholder certification
standards like IRMA can help some mining-impacted communities verify
compliance.
---------------------------------------------------------------------------
\17\ Please see Resolution Adopted by the U.N. General Assembly
September 13, 2007, Article 19. Available at: https://www.un.org/
development/desa/Indigenouspeoples/wp-content/uploads/sites/19/2018/11/
UNDRIP_E_web.pdf
\18\ Please see International Labour Organization C169--Indigenous
and Tribal Peoples Convention (1989) (No. 169). Available at: https://
www.ilo.org/dyn/normlex/en/f?p=
NORMLEXPUB:12100:0::NO::P12100_ILO_CODE:C169
---------------------------------------------------------------------------
For mine waste recovery, IIJA provided a huge boost to the United
State Geological Survey's new Earth MRI to, among other things, map and
characterize the concentrations of energy transition materials in
existing mine waste.\19\ USGS established pilot projects in Colorado
and New Mexico for this purpose. USGS has also partnered with the DOE's
National Energy Technology Laboratories (NETL) on promising research
and development in recovering materials by dissolving magnets with
copper-salt solutions, microbial bioleaching, phytomining, and other
mine waste processing techniques that reduce carbon footprint and
adverse environmental impact.\20\
---------------------------------------------------------------------------
\19\ Please see https://www.usgs.gov/special-topics/earth-mri
\20\ Please see Science News (Jan. 20, 2023): Recycling rare earth
elements is hard. Science is trying to make it easier. By Erin Wayman
---------------------------------------------------------------------------
For the circular economy, the Department of Energy announced the
American Battery Minerals Initiative providing $2.8 billion in IIJA
funds for domestic mineral processing and battery manufacturing.\21\
DOE also announced a subsequent award of about $73.9 million devoted to
battery recycling.\22\ These DOE Loan Program Office awards should be
subject to the same due diligence standards as support from other
federal agencies (i.e. State Department), where applicable.\23\ DOE's
partnerships with the Critical Materials Institute, NETL, USGS and the
West Virginia University Water Resources Institute offer exciting
opportunities to strengthen supply chains for energy transition
materials and stimulate domestic circular economy infrastructure.\24\
---------------------------------------------------------------------------
\21\ Please see DOE IIJA Battery FOA-2678 Fact sheet Available at:
https://www.energy.gov/sites/default/files/2022-10/
DOE%20BIL%20Battery%20FOA-2678%20Selectee%20Fact%20Sheets %20-
%201_2.pdf
\22\ Please see DOE IIJA Electric Drive Vehicle Battery Recycling
and Second-Life Applications FOA-2680. Available at: https://
www.energy.gov/sites/default/files/2022-11/Recycling%20and%20 Second-
Use%20Selections%20Factsheets%2011-16.pdf
\23\ Please see DOE's LPO RFI at 87 Fed Reg. 33141 (June 1, 2022)
See also DOE's 2022 Unified Regulatory Agenda at: https://
www.reginfo.gov/public/do/eAgendaViewRule?pubId= 202210&RIN=1901-AB54
\24\ Please see note 20.
---------------------------------------------------------------------------
Providing the right blend of incentives and mandates will drive
more investment where it is actually needed: in battery manufacturing,
collection facilities, and related midstream green infrastructure.
Transitioning the minerals we already mined once, to build what we now
need, will drive the circular economy forward. These alternatives to
mining may help source the materials we need with fewer adverse impacts
to climate, sacred and cultural sites, wildlife, and water.
No alternative is perfect. Even with more robust material reuse and
collection, new hardrock mines on public lands will still provide
minerals. However, sourcing minerals from public lands under a law
explicitly designed to further settler-colonialism only furthers
environmental injustice and puts an equitable transition out of reach.
Legislative and regulatory reform can create responsible mining
policies that put protection for communities at the forefront, to
ensure that any new mines are built with the best standards in place.
Policy Developments and Resources Devoted to Domestic Mine Permitting
Even though domestic mining is not the weak supply chain link,
Congress has already invested significant time and resources into mine
permitting. The Inflation Reduction Act (IRA) included $1 billion to
support timely and effective environmental reviews across federal
agencies, which should lead to better, more equitable outcomes, and
help avoid litigation.\25\ Additionally, the Fiscal 2023 budget will
help fund public lands management agencies to perform more thorough
mining reviews.
---------------------------------------------------------------------------
\25\ Please see IRA, Sec. Sec. 23001, 40003, 50301-03, 60402,
60116, 60505.
---------------------------------------------------------------------------
These mine permitting developments build upon those in the
Infrastructure Investment in Jobs Act (IIJA). IIJA made permanent the
Fixing America's Surface Transportation Act Permitting Council
(Permitting Council), which, in January 2021, added hardrock mining as
a covered sector.\26\ In November 2022, the Administration announced
the Permitting Council will devote $5 million to support consultations
with federally recognized Tribes in hardrock mine permitting.\27\
---------------------------------------------------------------------------
\26\ Please see 86 Fed. Reg. 1281 (January 8, 2021).
\27\ Please see DOI Press Release (December 1, 2022) Departments of
Interior, Agriculture Advance Mining Reforms Aimed at Protecting and
Empowering Tribal Communities. Available at: https://www.doi.gov/
pressreleases/departments-interior-agriculture-advance-mining-reforms-
aimed-protecting-and
---------------------------------------------------------------------------
IIJA also required the Interior Department to identify process
improvements to hardrock mine permitting.\28\ A coalition of Tribes,
Indigenous-led organizations, and conservation groups have also
petitioned Interior for rules that, if finalized, would result in more
timely, efficient decisions for hardrock mine permits without
sacrificing necessary public input.\29\ In response to both, the
administration convened the mining reform Interagency Working Group,
which we hope recommend mining rule improvements consistent with the
petition.\30\ These updates would also help lead to a fair hardrock
mine permitting process, delivering more certainty to both the mining
industry and impacted communities.
---------------------------------------------------------------------------
\28\ Please see IIJA Section 40206 Critical minerals supply chains
and reliability
\29\ Please see https://www.regulations.gov/document/DOI-2022-0003-
14647
\30\ Please see 87 Fed Reg. 18811 (March 31, 2022)
---------------------------------------------------------------------------
The IRA also created an advanced manufacturing production tax
credit (45X) for mining companies to receive an additional handout
equal to 10% of their production costs for the value of the 50 metals
listed in the IRA.\31\ The law also allows taxpayers who buy an
eligible clean vehicle to receive a credit of up to $7,500 (30D). The
IRA's 30D mineral sourcing requirements will likely spur more mining
and mineral processing, both within the United States and in free trade
agreement countries. These same sourcing requirements could also spur
most needed investment, innovation, and development in circular economy
infrastructure to refurbish or recycle these cars' batteries.\32\
---------------------------------------------------------------------------
\31\ Please see Public Law 117-269 IRA Section 13502 Advanced
Manufacturing Production Credit 45X(b)(1)(M) ``in the case of any
applicable critical mineral, an amount equal to 10 percent of the costs
incurred by the taxpayer with respect to production of such mineral.''
\32\ Please see IRA Section 13401(e). By January 1, 2024, 40% of
the value of the battery's critical minerals must be mined in the
United States or free trade agreement countries. Or recycled within
North America. The percentage increases annually until 2028 when the
threshold reaches 80%.
---------------------------------------------------------------------------
Today, it is possible to make some clean vehicles with the IRA's
sourcing requirements. But to truly benefit from this credit, the
United States and our allies need better circular economy
infrastructure to supply demands for energy transition materials.
Congress and the Treasury should view the mineral sourcing provision as
an opportunity to allow more taxpayers to claim the credit and build
domestic supply chain strength within the circular economy links.
The European Union Battery Directive already contains recycled
content requirements similar to the IRA's optional recycling provision.
The Treasury Secretary should issue 30D mineral sourcing rules that
allow constituent materials from the EU to qualify for the credit in
order stimulate investment and help supply meet demand for recycled
battery materials.\33\
---------------------------------------------------------------------------
\33\ See Treasury Department Revenue Procedure 2022-42 December 12,
2022. Available at: https://www.irs.gov/pub/irs-drop/rp-22-42.pdf
---------------------------------------------------------------------------
Conclusion
Earthworks strongly supports immediately transitioning to a justly-
sourced renewable energy economy to prevent further destruction from
the climate crisis. The climate crisis has disproportionately harmed,
and continues to harm, those who have contributed to it the least. We
also share serious concerns about mining's impacts to communities under
the current laws and rules.
Rather than rely on extraction, we urge Congress and the
Administration to drive innovation and development of circular economy
infrastructure to collect, recycle, reuse, substitute, and reduce
minerals used in existing clean energy technologies, thereby lowering
overall demand for new mining. Where mining is absolutely necessary, it
must occur in a more sustainable, just, and equitable way.
For companies, this means accountability to human rights and
environmental due diligence standards, and only operating with the full
consent of the communities they impact. IRMA is the only voluntary
standard that helps achieve this goal.
For Congress, this means passing circular economy legislation and
the Clean Energy Minerals Reform Act. Converting to a leasing system
for hardrock minerals--just like the one that oil and gas companies use
today--would help provide certainty to the permitting process and
result in more timely and socially acceptable decisions.
For public lands agencies, this means modernizing their mining
rules to deliver a more fair, just, and equitable hardrock mine
permitting process for mining-impacted communities.
For other federal agencies, this means forming the linear supply
chain links for minerals into a circle, and requiring companies perform
gender-responsive human rights and environmental due diligence across
their supply chains.
The renewable energy transition must not touch off the kind of
mining rush that has historically killed or displaced untold numbers of
Indigenous and other marginalized peoples, destroyed sacred and
cultural resources, stolen lands, scarred landscapes, and polluted
water and climate. Building a sustainable economy based on clean energy
gives us an historic opportunity to confront the legacy of injustice to
Indigenous communities and damage to the public lands held in trust for
future generations. Seizing that opportunity requires policies
prioritizing recycling and reuse over new mining. Where new mining is
acceptable, the mining industry must undertake the most responsible
methods. Thank you for your consideration.
______
Questions Submitted for the Record to Aaron Mintzes, Senior Policy
Counsel, Earthworks
Questions Submitted by Representative Grijalva
Question 1. Can you expand on the policies that the U.S. should put
in place to develop the circular economy? How does the U.S. compare to
its international competitors in developing a circular economy?
Answer. Ranking Member Grijalva, thank you for these thoughtful
questions. Circular economy policy for energy transition minerals has
the following main components: 1) labeling 2) producer responsibility
3) battery design for recycled content with high environmental
standards 4) supply chain due diligence.
The 117th Congress began to develop the right policies to create a
more circular economy for energy transition minerals. The Investment in
Infrastructure and Jobs Act (IIJA, Public law 117-58, Sections 40207,
40208, and 40209) provided grants and directed the Department of Energy
and Environmental Protection Agency to recommend effective battery
design, labeling, recycling, and producer responsibility models. The
Inflation Reduction Act also provided electric vehicle tax credits for
batteries made from recycled minerals in North America (IRA, Public Law
117-269, Section 13401(e)).
The United States should, where appropriate, open our circular
economy markets to European and Asian investment. If we can responsibly
source more refurbished battery materials from allied nations, the
United States can grow our circular economy and help secure supply
chains. The European Union recently finalized their Battery Directive.
Soon, almost all batteries (in most vehicles with exceptions) sold in
the EU market will come with a QR label (battery passport), recycled
content, producer responsibility, and supply chain due diligence. The
European Parliament begins debate soon on their response to our IRA,
the EU Raw Critical Materials Act. Both continents appear to support
circular economy subsidies.
Congress and the Biden Administration could benefit the domestic
circular veconomy by adapting the IRA's electric vehicle tax credit
(30D mineral sourcing provisions) to take advantage of the market
created by the EU Battery Directive. In addition, applicable free trade
agreements or other State, Treasury, and Commerce Department financing
mechanisms must reinforce our strengths and maintain our global due
diligence commitments, especially to free, prior, and informed consent.
Question 2. During your testimony you spoke about the importance
free, prior, and informed consent in ensuring that any mining in the
U.S. and abroad is respecting the rights of local and Indigenous
communities. Can you describe what free, prior, and informed consent
means and describe specific ways that the U.S. can implement that
practice domestically and throughout the international supply chain?
Answer. Thank you for this question. Free, prior, and informed
consent (FPIC) is a right derived from the United Nations Declaration
on the Rights of Indigenous Peoples (Article 19 of UNDRIP) and
International Labour Organization C169 (Indigenous and Tribal Peoples
Convention No. 169). The U.S. can help operationalize FPIC by requiring
recipients of U.S. Government financial, diplomatic, or technical
support (especially original equipment manufacturers OEMs) to perform
ongoing due diligence across their supply chains, in accordance with
the U.N. Guiding Principles on Business and Human Rights.
In practice this means, as an express condition of government
support, OEMs must receive FPIC as they develop, review, publish,
enforce, and periodically revise their supply chain due diligence
plans. Those plans must also create effective grievance and remedy
mechanisms for compliance failures.
In the domestic context, the same FPIC principle applies to
Government support through the Defense Production Act (DPA), Department
of Energy's Loan Program Office, or other mechanisms. On public lands,
the Interior and Agriculture Departments must also update their mining
rules to respect treaty reserved rights and clarify the Secretary's
authority to deny mines impacting sacred sites and other Indigenous
resources (43 USC 3809 and 36 CFR part 228).
Question 3. In your testimony you talked about the need for due
diligence at all stages of the critical mineral supply chain. Can you
please elaborate on the responsibilities of the U.S., as well as
private companies, in performing due diligence? What policies should
the U.S. be pursuing to improve due diligence standards at home and
abroad?
Answer. Due diligence is an ongoing obligation companies must
perform across their supply chains. Those companies receiving federal
support through an IIJA grant, DOE loan guarantee, or DPA investment,
(or various State Department financing mechanisms) must do more than
merely consult with Tribes. They must receive free, prior, and informed
consent. For instance, DOE loan guarantee terms for domestic lithium,
nickel, or graphite mineral processing facilities should require OEMs
certify ongoing FPIC, specify community benefits, conduct third party
audits, publish audit results, and provide impartial dispute resolution
and effective remedies throughout all phases of the project.
Question 4. Under current mining laws, how much do mining companies
pay in royalties for extracting on federal lands? How does that compare
with other countries that allow companies to mine on public land, such
as Canada and Australia?
Answer. Under the 1872 mining law, companies pay zero royalty to
the Federal Government. Every other nation charges a federal royalty
for mineral extraction. Most other nations, like Canada and Australia,
charge federal royalties through a leasing system. Canada's provincial
governments in British Columbia, Ontario, and Quebec have each passed
leasing statutes that, in principle, require FPIC.
Question 5. Please elaborate on any additional points you would
like to make for the record.
Answer. Mining is not the weak link in energy transition mineral
supply chains. While public lands mines will source some minerals for
the energy transition, Congress designated the task of managing mineral
supply chains to the Departments of Commerce, Defense, Energy, State,
Interior's U.S. Geological Survey, and the Environmental Protection
Agency via the Critical Materials Consortium (Consolidated
Appropriations Act of 2021, Public law 116-260 Section 7001, and IIJA
Public law 117-169 Sections 40201-40211). Public lands agencies can
play an important role by updating their mining regulations to provide
more fairness and certainty to the permitting process.
Congress should reform our mining laws and provide EPA and DOE
authorities to grow the circular economy, joining our allies in opening
our markets to responsibly sourced energy transition materials. In
particular, Congress should pass legislation modeled after the EU's
Battery Directive and IIJA's recommendations on battery design,
labeling, recycled content, and due diligence, while maintaining high
environmental standards.
Leading researchers at the Institute for Sustainable Futures at the
University of Technology Sydney estimate that the right mix of circular
economy policies can reduce demand for new lithium mines by 25% and new
nickel and cobalt mines by half. As the 21st century rush for energy
transition minerals unfolds, we must avoid the tragic mistakes of the
19th century rush for precious metals and 20th century rush for
uranium. Seizing this historic opportunity to confront this legacy of
injustice means reforming our mining laws and advancing a more circular
economy to more responsibly secure supplies for energy transition
minerals. Thank you again for your consideration.
______
Dr. Gosar. Thank you, Mr. Mintzes.
I now recognize Mr. George for 5 minutes.
STATEMENT OF JASON GEORGE, BUSINESS MANAGER, INTERNATIONAL
UNION OF OPERATING ENGINEERS, LOCAL 49, MINNEAPOLIS, MINNESOTA
Mr. George. Thank you, Mr. Chairman, Members. I want to
thank my friend, Congressman Stauber, for the introduction, as
well. There is no greater champion for workers in their
district than my friend, Pete. And thank you for that.
My name is Jason George. I am the elected leader of
Minnesota's largest construction union, the Operating Engineers
Local 49. Our members operate and repair the heavy equipment
that builds every aspect of our region. Thank you for inviting
me here today to discuss this very serious issue facing our
nation and members I represent.
The mining of critical minerals--specifically, where they
are mined--will have a profound impact on our collective
future. I was born, raised, and currently live in Minnesota.
The vast majority of our nearly 15,000 members live and work in
Minnesota.
Our state has a long, proud history of mining. We like to
remind people that our state mined the ore that produced the
steel that won two world wars. The mining industry has been and
remains the lifeblood of northern Minnesota.
Today, we are at a precipice of a generational opportunity
that could launch another 100 years of prosperity through
mining. Our nation and the world are in desperate need of
critical minerals such as nickel, cobalt, and copper. These
minerals are necessary to build the batteries, wind turbines,
solar panels, and other products the world needs in order to
transition to a clean energy economy.
Ninety-five percent of our domestic nickel resources, a
vast majority of our cobalt, and about a third of our copper
deposits are beneath the ground in northern Minnesota. The only
question before us is whether or not we will be allowed to mine
them. And that, really, is the only question, whether we will
be allowed to do this or not. There really is no debate about
whether we can. We have been doing it for 100 years or more.
We have the technological know-how to extract these
minerals safely. The people who live near the potential mines
want the opportunity. I don't believe--and Congressman Stauber
can correct me--that there is an elected body anywhere where
these minerals are located that does not support these projects
being explored. Not one. They all support it. Everyone who
lives there wants this opportunity. It is people that don't
live there that are preventing that.
What we also don't have is a fair process for permitting
mines that is based on science and reason, from my experience.
Instead, we have a hyper-political process that has been
hijacked by a combination of wealthy cabin owners, wealthy
tourists, business owners who supply their outfitting needs,
and anti-development extremists. This small group of people is
highly influential within the Democratic Party structure in my
home state. They are loud, they give a lot of money, and too
many Democrats in my area and my state are advancing their own
narrow political agenda at the expense of Minnesota and the
American people, in my opinion.
The latest example is a decision by the Department of the
Interior to ban mining on more than 225,000 acres of northern
Minnesota land that contain the vast majority of our mineral
resources. The Department did so without studying any specific
mine plan. It is purely based on hypothetical scenarios and not
specific data. It issued a blanket ban based on hypothetical
scenarios. The decision had nothing to do with science, and
everything to do with Democratic politics, in my opinion.
Too much is at stake to allow this to happen. Good-paying
union jobs are on the line. Members of my union and others will
build these projects, earn family-sustaining wages, world-class
health care, and pensions that ensure a dignity of good life
and retirement. Unlike the data used to ban mining, these jobs
aren't hypotheticals.
Like any good union representative and union leader, we
have it in writing. We have project labor agreements with all
the mining companies that are proposing mines in this area.
They will be built by my members, and they will be good-paying
jobs, and we have it in writing.
As a Labor leader, I would be remiss if I didn't point out
also what happens if we don't mine it in Minnesota. And you see
the pictures behind the gentleman up there about where these
products and where these minerals will be mined if we don't do
it here.
I am running out of time. I will just sum up by saying that
we are extremely frustrated back home. We know how to do this.
We have the minerals in our backyard. The people that live
there want these jobs and want to explore these opportunities.
We absolutely have the know-how to do it safely.
The cleanest water in Minnesota exists where mines have
existed for more than 100 years. The dirtiest water in
Minnesota exists in the districts where the people are trying
to stop us from mining, in the Twin Cities. And that is a fact.
And that is something that is extremely frustrating to
everybody that I represent. And most people in Minnesota,
especially the people that are trying to raise families and
have these good-paying job opportunities in northern Minnesota.
So, I thank you for your time, and I will end with that.
[The prepared statement of Mr. George follows:]
Prepared Statement of Jason George, International Union of Operating
Engineers, Local No. 49
I submit the following written testimony in advance of my
appearance at the House Committee on Natural Resources, Subcommittee on
Oversight and Investigations hearing titled, ``Dependence on Foreign
Adversaries: America's Critical Minerals Crisis.''
My name is Jason George, and I am the elected leader of Minnesota's
largest construction union, the International Union of Operating
Engineers, Local 49. Our members operate and repair the heavy equipment
that builds every aspect of our region. Thank you for the invitation to
be here today to discuss a very serious issue facing our nation and the
members I represent. The mining of critical minerals--specifically,
where they are mined--will have a profound impact on our collective
future.
I was born, raised and currently live in Minnesota. The vast
majority of our nearly 15,000 members live and work there. Our state
has a long and proud history of mining. We like to remind people that
our state mined the ore that produced the steel that won two world
wars. The mining industry has been and remains the lifeblood of
northern Minnesota.
Today, we are at the precipice of a generational opportunity that
could launch another 100 years of prosperity through mining. Our
nation, and the world, are in desperate need of critical minerals such
as nickel, cobalt, and copper. These minerals are necessary to build
the batteries, wind turbines, solar panels, and other products the
world needs in order to transition to clean energy.
95% of our domestic nickel resources, a vast majority of our
cobalt, and about a third of our copper deposits are beneath the ground
in northern Minnesota. The only question before us is whether or not we
will be allowed to mine them. There is no other question.
We have the technological knowhow to extract these minerals safely.
The people who live near potential mines want the opportunity. We have
the skilled union workforce to build the projects, and a productive,
hard-working population ready to operate the mines once they are built.
What we don't have is a fair process for permitting mines that is
based on science and reason. Instead, we have a hyper-political process
that has been hijacked by a combination of wealthy cabin owners,
wealthy tourists, business owners who supply their outfitting needs,
and anti-development extremists. This small group of people is highly
influential within the Democratic Party structure. They are loud. They
give a lot of money. And too many Democrats, including in my home
state, are advancing their own narrow political agenda at the expense
of Minnesota and the American people.
The latest example is a decision by the Department of the Interior
to ban mining on more than 225,000 acres of northern Minnesota land
that contain the vast majority of our mineral resources. The department
did so without studying any plan for a specific project. In fact, it
refused to study a mine plan submitted in this area. Instead, it issued
a blanket ban based on hypothetical scenarios. This decision had
nothing to do with science and everything to do with Democratic
politics.
Too much is at stake to allow this to happen. Good-paying union
jobs are on the line. Members of my union and the others that will
build these projects earn family-sustaining wages, world-class health
care, and pensions that ensure the dignity of a good life in
retirement. Unlike the data used to ban mining, these jobs aren't
hypotheticals. Like any good union representative, we have a signed
contract. All of the companies that have or will soon produce mine
plans in this area have signed project labor agreements with the local
trade unions ensuring we will build their mines.
Our members aren't the only workers with a lot at stake. Mining
plant operation jobs are among the highest paid in the region. The
number of jobs generated by businesses that will pop up to support the
mines is limitless and will pay well. As I said, the opportunity for
workers is generational.
As a labor leader, I would be remiss if I didn't point out what is
happening now and will continue to happen to workers if we don't mine
these minerals in America. Many news sources have documented the
working conditions in mines around the globe where these minerals are
currently produced. A recent program on NPR titled, ``How `Modern-Day
Slavery' in the Congo Powers the Rechargeable Battery Economy,'' is
worth listening to.
It details the conditions people face mining cobalt in the Congo.
This mineral is toxic to touch and breathe in raw form if not mined
properly. Right now, hundreds of thousands of Congolese people,
including many women and children, are mining it with their bare hands,
being poisoned every day.
Siddharth Kara, a fellow at Harvard's T.H. Chan School of Public
Health who has researched modern-day slavery for two decades, said this
on the program:
``We shouldn't be transitioning to the use of electric vehicles at
the cost of the people and environment of one of the most downtrodden
and impoverished corners of the world. The bottom of the supply chain,
where almost all of the world's cobalt is coming from, is a horror
show.''
The Biden administration has agreed these conditions are abhorrent
and must not be supported. Just last year the Department of Labor said
it would add lithium-ion batteries to a list of goods made with
materials known to be produced with child or forced labor under a 2006
human trafficking law. It was widely reported that this decision was
based on the batteries containing cobalt, a mineral largely mined in
the Congo.
I simply cannot understand how our government can rightly
acknowledge the human atrocities in countries like the Congo that mine
our minerals, while the same administration moves to ban the mining of
these minerals in America, where we can ensure such atrocities do not
happen.
This is a shameful position. It is rife with hypocrisy, and it is
an embarrassing example of partisan politics at its worst.
You can't say you are for human rights and then be OK with the
metals in your Tesla batteries being mined in the Congo by women and
children poisoning themselves because you don't want these mines in
your backyard, where they might obstruct your view.
You can't say you are serious about a clean-energy future, knowing
that recycling won't produce an adequate supply of minerals to get the
job done, and yet oppose domestic mining to meet our needs.
You can't say you are serious about protecting our national
security when you are banning mining in America while China buys up
mineral mines in the rest of the world.
Enough is enough. We as a nation must stand up to this small but
vocal class of elite obstructionists. Mining technology has advanced.
We can do this safely here. We have the best-trained union construction
workers in the world ready to build our mines. We have workers hungry
for family-sustaining jobs in operations right here at home. We have
businesses chomping at the bit to support a domestic mining industry.
I will repeat what I said a few minutes ago. The only question is
whether or not the U.S. government will allow us to mine.
A lot is at stake. Opportunities for workers. The lives of poor
people in foreign lands. Our energy future. Our national security. We
must find the will to do the right thing.
Thank you, Mr. Chairman and committee members, for your time today,
and for drawing attention to this critical issue.
______
Dr. Gosar. Thank you, Mr. George. It is always great to
have somebody coming from the ground level to give us some
reality checks.
I am now going to recognize Members for 5 minutes. We are
going to go to Mr. Lamborn first this morning. The gentleman
from Colorado is recognized.
Mr. Lamborn. Thank you, Mr. Gosar, for having this meeting.
Thank you for the witnesses for being here.
And besides being on Natural Resources, Representative
Gosar, I am also on the Armed Services Committee, so I am going
to ask questions that have to do with both of the Committees.
In other words, the connection between critical minerals and
national security. And that is something I think we should all
be aware of.
The balloon incident with China shows us that there are
countries out there that are not seeking to really help us out.
Dr. Moats, that leads to my first question: What country or
countries does the United States source many of its critical
minerals from?
Dr. Moats. Thank you, gentleman. Of course, the answer for
all metallurgical answers, ``It depends.''
So many of the--like the rare earths for the magnets mostly
come out of China. The nickel and cobalt is mined. Cobalt is
mostly mined in Central Africa, and then processed in China to
make the lithium ion batteries that we need.
There are other elements that come from allied countries.
Like, aluminum mostly comes from the Aluminum Valley in Quebec.
And that is probably an OK thing, from a geopolitical
standpoint.
So, it is a very broad answer to a question.
Mr. Lamborn. I am going to probe a little more on the China
connection. We know that China supplies 26 different minerals,
of which the United States is over 50 percent import reliant.
That is far more than from any other country. And some of those
minerals, the United States is 100 percent reliant on China.
So, what implications does this have on our national
security, when a country like China, who is--I won't go into
all the threats that they are posing to our national security,
but what does our dependence do to our national security?
Dr. Moats. One of the critical minerals is tellurium.
Tellurium is added with bismuth to make----
Mr. Lamborn. Could you speak into the microphone a little
better?
Dr. Moats. Sure. Tellurium comes from copper refining.
China dominates copper refining, so most of the tellurium in
the world comes out of China.
From a military standpoint, tellurium is mixed with bismuth
to make thermoelectric night vision materials. So, whoever
controls the tellurium--we do produce some tellurium in the
United States, but it is exported, and then refined, and
brought back into the United States.
But right now, the tellurium that is needed for night
vision goggles and for solar panels--over 50 percent of the
grid storage solar panel uses cadmium telluride--we are heavily
dependent on China for that.
Mr. Lamborn. Yes, and thank you for focusing on those
military applications.
There are tremendous economic applications the Ranking
Member talked about: cell phones, things like that, computers.
We know that there are chip making, there are tremendous needs
there for critical minerals that only come out of China, either
mining or refining.
How can the United States increase its national security,
though, by securing new materials higher up in the supply
chain?
What should we do to make our situation not so precarious?
Dr. Moats. In the short term, I think we need to look at
every mine and every processing plant that is here currently in
the United States, and we need to look at where can we get
critical minerals that we are already processing, and we are
working at that at our university.
I personally work with companies looking at evaluating
where they can get gallium, which is important for WiFi and all
the semiconductor chips that we have. Gallium, right now, could
be--at least a large chunk of it could come out of our two zinc
plants in Tennessee and North Carolina, specifically the one in
Tennessee. Currently, gallium is not recovered. The germanium
is shipped to Europe for refining and brought back.
So, there are lots of opportunities. Cobalt and nickel
could be recovered from the Missouri mines, could be recovered
from cobalt. There is a new cobalt mine that is opening up in
Idaho. There are companies that are looking at their existing
plants right now to determine if they can recover, and what
innovations.
And I am a member of the Critical Materials Institute,
which is funded by the Department of Energy. We specifically
have a project looking at gallium, germanium, and indium
recovery from our zinc plants.
Mr. Lamborn. Are some of our environmental regulations too
stringent to currently allow the productive use of raw or by-
products for these critical minerals?
Dr. Moats. I am not a policy person, so I am not going to
say what is stringent or not stringent. That is for----
Mr. Lamborn. We will say that.
Dr. Moats. Yes, you can say that. I will say that the need
to require--the needs of the policies have shut down plants.
So, there are no primary lead smelters in the United States
anymore because of the requirements that are put on by the EPA
and the local states. The last lead smelter was shut down in
Herculaneum, Missouri in 2013.
We recycle a lot of lead, but any new lead that comes into
the country has to be imported, and most of that comes from
China.
Mr. Lamborn. Thank you very much.
I yield back, Mr. Chairman.
Dr. Gosar. I thank the gentleman. I now recognize Ranking
Member Stansbury for her 5 minutes.
Ms. Stansbury. Thank you, Mr. Chairman. I would like to
start by welcoming Mr. George first.
My mother was an operating engineer, and I come from a
union-strong family, so I really appreciate you being here with
us, and representing the workers of your Local and, of course,
all the operating engineers.
And I wanted to also use this opportunity to say--I shared
this with the Committee yesterday as we were talking about both
mining and oil and gas issues--that I was born while my parents
were actually working. My mom was a machine oiler that worked
at a coal-fired power plant in Farmington, New Mexico, and my
dad was a welder in the oil and gas fields. And it was because
of the fallout of the oil and gas industry in the early 80s
that my family actually had to leave that community and,
ultimately, why I grew up in the biggest city in New Mexico.
So, I understand very intimately, because of my own family
history, how big, international, global issues around our
domestic production of minerals and fossil fuel production
really affects the families and workers of this country. And we
take those issues very, very seriously. And I think, obviously,
your testimony highlights that.
But I also think that it is important to recognize that
much of what has happened around mining in the United States
and its decline is not because of domestic policy, but because,
as we heard here from Mr. Moats and others, it really has to do
with international trade and commodity prices at the
international level.
And I think Mr. Mintzes highlighted this in his testimony,
but it is important to recognize in this hearing that this is
not only an issue of strategic and national security for the
United States, this is a problem for every major country in the
world who is our ally, who depends on these resources for
manufacturing, for national security purposes, and for just
general economic development. This is not just a U.S. problem.
In fact, there are dozens of countries in Europe, Asia,
Africa, and others that are dependent on these resources, and
are unable to source them through the global supply chain right
now. And we are not just talking about one mineral. We are
talking about dozens of minerals, right?
So, just opening a mine in a place is not going to solve
this problem, because we are talking about dozens of minerals
that would have to be sourced from many different geologic
formations from all over the world, as they currently are. But
the problem is that we cannot responsibly source these
materials right now because they are in places where we do not
have ally relationships, there are human rights abuses
happening, and because we do not have responsible practices
happening.
So, there is not a simple solution here. That is one of the
things that I really want to highlight. We need a multi-pronged
approach. We are going to have to work with our allies who are
also seeking these minerals to ensure that we are doing
responsible sourcing, especially if that is abroad. It doesn't
mean we just open a mine to do it here in the United States. It
means that we have to actually utilize and help use our
international support systems and policies to help ensure that
we are holding accountable those multi-national corporations,
some of which are based in the United States and elsewhere, to
the highest possible human rights and environmental standards,
whether they are operating here in the United States and
employing our operating engineers and all of our miners, or
whether they are operating abroad. So, we really need to use
every possible tool at our disposal.
But I want to take the rest of my time to really focus on
the circular economy that Mr. Mintzes brought up here. We know
that recycling, re-use, and design is not going to be the only
solution. It is only part of the solution. But it represents a
significant portion of the supply chain that is under-developed
right now in the United States and, as Mr. Mintzes stated, is
under-developed from a policy standpoint with respect to other
countries.
So, Mr. Mintzes, could you please share more? What exactly
is the circular economy? What is entailed in it? And what does
the United States need to do to really advance its circular
economy?
Mr. Mintzes. Thank you, Ms. Stansbury, for that question.
Some of us may remember bottle bills, or deposits when you
could turn in a can or a bottle and receive a nickel or a dime
back. That is effectively what we are talking about.
In Europe, it really boils down to four things: you have a
producer responsibility, you have supply chain due diligence,
you have recycled content standards. And the state of
California is looking at some of these ideas, because they have
a large EV market, too, as you indicated. And the nations of
Japan and South Korea have really good markets for this.
I want to make one other quick point. In response to the
trade dispute that you spoke about in 2010 between China and,
really, the rest of the world, what happened was Japan and
South Korea did, in fact, begin to build a more circular
economy to recycle there, because they don't have as many mines
as we do, right? So, they are building it, Europe is building
it. And I think that we can do it here, too. We can do it with
union jobs, as well.
Dr. Gosar. I thank the gentlewoman. The Chairman of the
Full Committee, Mr. Westerman, is recognized.
Mr. Westerman. Thank you, Chairman Gosar. Thank you to the
witnesses.
Mr. Mintzes, I know you stated in your opening remarks that
you agreed with the Ranking Member and my position on you can't
mine and permit your way out of it. But I also added to my
remarks you have to permit, mine, refine, and manufacturing.
And under mining you could put recycling in there. So, I just
want to make sure you are in agreement with the whole statement
I said, not just the part about mining and permitting.
Mr. Mintzes. Thank you, Mr. Westerman. Yes, we need to mine
and permit the whole supply chain. We need to do it more
responsibly.
And I appreciate the tenor of bipartisanship that you are
setting for this Committee already.
Mr. Westerman. And going back to Ms. Stansbury's comments,
there is a whole lot we agree on on this.
And we have been taking advantage of foreign countries
through our trade program. I have testified in these trade
disputes before, and the Chinese Government, they don't care
about price fixing, they don't care about playing fair. They
exploit our system of free markets and rule of law to gain
market share. They will use low labor, they will use slave
labor. They will use no environmental regulations to produce
commodities to get them into the U.S. market, to drive our
producers out of business, to capture that market share, and
they do it in many different industries.
So, we do need to work on trade. We do need to make
American, not only mining, but processing and manufacturing,
stronger than ever before. And we have the ability to do that,
because we are blessed with the resources.
And Mr. George, I have been to northern Minnesota, I have
seen the taconite mining, and talking about steel, Arkansas has
become one of the largest producers of steel, and it is all
recycled steel.
But as I think, Mr. Moats, you mentioned in your testimony,
we are like one-tenth or less of the steel production of China.
Dr. Moats. Yes, we are one-tenth of the steel, and about
two-thirds of our recycled. And yes, I was recently in
Mississippi County visiting--which, if you didn't know, more
steel is produced in Mississippi County than any county in the
United States.
Mr. Westerman. Right. But is there any way that recycling
meets the future demands?
Dr. Moats. Obviously, with growth, we can't have a circular
economy to supply all of our new needs. I think any reasonable
person would say we need to recycle. And for lithium ion
batteries, we already have redwood materials, we have life
cycle. People are already building plants in the United States
to recycle the lithium ion batteries.
Mr. Westerman. So, we talk about an all-of-the-above energy
approach. We also need an all-of-the-above minerals approach:
new mining, recycling, and being as efficient and effective as
we can.
And I want to go back to Mr. George. An interesting thing
that I think we fail to take into account all the time is the
mining in northern Minnesota is huge for that area. But when
that taconite is shipped off to the refineries, there is a
value added part to that. And then, if that steel out of those
refineries goes into automobile manufacturing or building
construction, there is even more value added to that.
And I talked yesterday about how we produce about $90 or
$120 billion worth of raw materials through recycling and
mining in the United States, that when that gets processed, it
becomes a value of about $900 billion, but when that process
material gets manufactured, it adds about $3.6 trillion to the
U.S. GDP. And this is about much more than mining, it is about
national security, it is about supply chains, but it is also
about creating incredible jobs for union workers and non-union
workers alike, and being able to grow our economy and prosper
here. But it starts with mining. If you don't have the raw
materials, you can't do the other part of it.
And Mr. Moats, I am a little biased to your testimony
because we are fellow engineers, and I know Missouri Rolla has
one of the best mining engineering programs that is out there.
But I also know that there seems to be a shortage of mining
engineers. And you so aptly talked about the shortage of
workers in these mines and in America. We have to automate and
make things more efficient, safer.
I just used all my time, but--thank you all for your
testimony. It is something we need to really follow up on more.
And if we will work on the real issues and the real
problems, we can really do great things for our country and for
the world, and prevent situations like are represented in these
posters behind me.
Thank you, Chairman. I yield back.
Dr. Gosar. I thank the gentleman, the Chairman of the Full
Committee. I now recognize the Ranking Member, Mr. Grijalva for
5 minutes.
Mr. Grijalva. Thank you, Mr. Chairman.
Dr. Moats, during your testimony, the reference that you
made--and I apologize for the way I ask questions, I am not a
linear thinker like Mr. Westerman, so sometimes I----
[Laughter.]
Mr. Grijalva. I got a liberal arts education. It has messed
me up, I guess.
[Laughter.]
Mr. Grijalva. Anyway, Dr. Moats, the history of decline on
the critical mineral extraction, production, where does
regulatory, environmental standards, clean air, clean water,
for example, and the permitting, where does that fall into that
percentage decline? What part of the cause is that, if that is
what we are talking about here?
Dr. Moats. Yes, I have thought a lot about why our smelters
and mines have closed.
Some of it is just the natural resources. Our smelters and
refineries were built near mines, and as the mines played out,
they were not set up to bring in concentrates from other parts
of the country and other parts of the world. So, economically,
it was not viable.
There are other places where the smelters have shut down
because of the implementation of more stringent environmental
policy. I think we can all acknowledge the history of our
mining and metallurgy was dirty, but that is before my
lifetime. The plants now all operate within the standards that
are set by the local, the state, and the Federal Government.
They do so willingly. But because plants were built before
that, it took money to upgrade and improve them, and the United
States was very happy to shut down plants and outsource that
production to other countries.
So, there is some that is policy, there is some that is
just economics. And I think, like, again, Ranking Member
Stansbury, I think it is a complex situation, and there is no
one answer fits all, but policy is definitely part of it. And
permitting for getting new mines on just takes forever.
Mr. Grijalva. And the 1872 mining law, what role does that
play in the----
Dr. Moats. I am going to defer to that, because I know of
the law, but I am not a mining engineer by trade, and I don't
feel like I know the law well enough to offer an opinion on
that.
Mr. Grijalva. See, so linear thinkers do so well, they
could just kind of defer.
Mr. Mintzes, in your testimony, I think one of the things
that--and I back-referenced to the 1872 mining law--I have said
that many of the controversies that we confront in terms of
siting, and permitting, extraction have to do with the public's
right to know and the public's involvement in it, in
particular, Indigenous communities that have become much more
active, involved, and assertive about sacred sites, cultural,
and historic resources. 1872 does not address that, and yet we
have the conflict that is going on now in terms of consultation
and trust responsibility to these Nations.
Talk a little bit more about that role that you referenced
in your testimony, in particular.
Mr. Mintzes. Thank you, Mr. Grijalva. I really appreciate
that. I also appreciate your long-standing support for reform
of the 1872 mining law. And we are urging Congress to pass the
Clean Energy Minerals Reform Act again this Congress.
Let me just highlight the Hualapai Nation, just for
example.
Mr. Grijalva. OK.
Mr. Mintzes. If you have an exploratory mine and it is
fewer than 5 acres, which many of them are going to be. Under
the law what happens is you stake your claim, you go to the
local BLM office, you file a piece of paperwork and a fee. The
way that the government interprets the law is that they have no
discretion to deny that exploratory project.
Now, the Hualapai have no idea that the exploration is
going to happen until the drills hit the ground, because the
notice that the mining company needs to provide is only to the
government, but not to any of the people. So, Mr. Grijalva,
that is actually part of the real source of most of the
conflict in mine permitting. It is because we are operating
under a 19th century statute, where we could stake claims, and
then those minerals go wherever the claim owner wants them to
go, unlike a leasing system, which the rest of the world does.
Mr. Grijalva. OK.
Mr. Mintzes. Thank you.
Mr. Grijalva. I appreciate it. And I think royalties is an
issue, as well. If we are going to fund dealing with the due
diligence on the chain, expediting permitting processes, a
source of revenue should come from those that are profiting
from that extraction. And since we have no royalties at all on
mining except for coal, I think that is open for discussion, as
well, going forward in this overall discussion about permitting
and critical minerals, and accessing those.
And I yield back, Mr. Chairman, and thank you.
Dr. Gosar. I thank the gentleman from Arizona. The
gentleman from Montana, Mr. Rosendale, is recognized for 5
minutes.
Mr. Rosendale. Thank you very much, Mr. Chair.
Everyone on this Committee is extremely interested in
protecting our land, air, and water quality across the nation
and, quite frankly, around the world. And most of us, as
Chairman Westerman said, have extremely close ties to the land
ourselves.
We also recognize the need and the benefits realized by
utilizing our natural resources, in most cases, rendering the
land more productive after the extraction or harvesting of
timber, making the land actually more productive than it was
prior to any of that activity taking place.
Mr. Mintzes, I would like to ask a couple just real basic
questions.
If the raw materials that are necessary to, literally,
support civilization have not even been produced yet, they
haven't been, as we have heard, permitted, mined, and refined,
we just can't recycle our way out of this situation, either. We
need some more materials.
Do you believe that we should produce them in the most
environmentally friendly methods that are available?
Mr. Mintzes. Thank you, Mr. Rosendale, for that question.
Yes.
Mr. Rosendale. OK. Do you believe that they should utilize
the safest and most advanced labor standards as they mine these
materials?
Mr. Mintzes. Yes, thank you.
Mr. Rosendale. Thank you. And do you believe that China
uses the most advanced and friendly environmental standards and
labor standards?
Mr. Mintzes. Thank you, Mr. Rosendale, for that question.
My understanding from the State Department is no, at least in
some regions they are in, yes.
Mr. Rosendale. OK. I appreciate that. I don't know why we
would continue to allow them to take on all these activities,
as we see on the posters behind us, and not take over some of
this production ourselves.
Mr. Moats, I have a couple of questions here for you.
Yesterday, we heard testimony about the refining process, and
that the United States has dramatic limitations on the
processing itself. So, it is not just the need to mine these
materials, but, obviously, they have to be smelted, they have
to be processed, all of the above.
What, in your opinion, is the primary reason that we don't
have these facilities in the United States?
You mentioned it a little bit earlier, but, if you could,
expand on that some.
Dr. Moats. Yes. So, we export minerals and many of the
metals that I have referred to. We don't have the smelting
capacities we used to. They, again, shut down for both economic
reasons, because of the lack of a level playing field, because
when you sell into a commodity market, everybody sells into the
same commodity market. And if you are subsidized, if your
competition is subsidized, then you are in an economic
disadvantage.
Additionally, the environmental regulations that have been
put into place created more costs to operate in the United
States, and so, therefore, it became more difficult.
Mr. Rosendale. So, as many people around the room continue
to raise the questions about colonialism and the management of
our resources, and accusing us of that, by exporting all of our
raw materials to another country, having them process it, and
then us having to purchase the finished product back, doesn't
that sort of relegate the United States to be acting like a
colony of yet one of these other powers?
You don't have to answer that. That would just be it.
We did learn a lot during COVID that the supply chains are
completely disruptable, and that it presents major problems
with us, whether we are talking about medications or other
finished products that are necessary for our life.
I have another avenue. The Northern Crow, the Northern
Cheyenne and the Crow in Montana, they rely heavily on the coal
resources that they mine in Montana. And while I know coal
hasn't been the top of the subject today, I want to go down a
different little road.
The regulatory conditions that have been imposed on the
power industry has caused the closure of 50 percent of the
Colstrip Electric plant that the Crow and Northern Cheyenne
depend on completely for jobs and for revenue. Without it, they
would have 65, 70 percent unemployment rates. It is a mine-to-
mouth operation, so they mine it and then it goes directly to
this power plant.
If we don't have the baseload electricity, what challenges
does that present for processing, and manufacturing, and things
like that?
As we talk about trying to electrify the nation for not
only the electric cars, but also to the processing of the very
materials.
Dr. Moats. Am I allowed to answer the question?
Mr. Rosendale. Mr. Chair, I have expired all my time, but--
--
Dr. Gosar. The gentleman can answer the question.
Mr. Rosendale. Thank you very much, Mr. Chair.
Dr. Moats. Obviously, you have identified the ability to
generate electricity is going to be substantial if we are going
to electrify our vehicles, and then the raw materials that we
need to do that.
Obviously, the United States sits on 250 years of coal
reserves to supply all of our electrical needs. We have chosen
not to do that. We have a lot of natural gas reserves because
of fracking and other things. So, they are there. And the
opportunity to use those energy resources responsibly, I think,
are still available.
Mr. Rosendale. Thank you very much, Mr. Chair, and I would
yield back. Thank you for your----
Dr. Gosar. I thank the gentleman from Montana. The
gentleman from Arizona, Mr. Gallego, is recognized.
Mr. Gallego. Thank you, Chair Gosar and Ranking Member
Stansbury.
As a member of both the Natural Resources and Armed
Services Committee, I agree that securing our supply of
critical minerals is a national security concern. That is why
we need to look seriously at all possible solutions for
sourcing and securing responsibly produced minerals.
My first question is to Mr. Mintzes.
In your testimony, you describe the actions this
Administration and the 117th Congress took to manage supply
chain risks for critical minerals. Could you please elaborate
on why this diversified approach is strategic for national
security?
Mr. Mintzes. Thank you, Mr. Gallego, for that question.
The Biden administration and Congress have really taken
three major approaches: diversifying supply, pursuing
recycling, and also looking at mine waste. The steps that the
Administration and the Congress last took, I wanted to just
disclaim I don't necessarily support all of them.
But I just wanted to share that the infrastructure law made
the FAST Act permanent. The FAST Act has included hardrock
mining as a covered sector therein. The IRA funded $1 billion
to our agencies to help speed permitting. The infrastructure
law also created a working group designed to help speed
permitting. We will be seeing those reports coming out soon.
So, when you think about the infrastructure law, the
funding for the agencies through Fiscal Year 2023 budget,
making the FAST Act permanent, and also the tax cuts for mining
in the Inflation Reduction Act, and the mineral sourcing
provisions of the electric vehicle battery tax credit, we have
a lot of incentives to go mine, and also to responsibly source
materials that we need.
So, we have already taken a lot of steps through the IRA
IIJA in that respect.
Mr. Gallego. Thank you. To make our nation secure, we must
proactively plan also for the future.
Mr. Loris, in your testimony you note that the critical
minerals that the economy relies on today may look much
different in 20 or 30 years. Could you please elaborate on the
importance of investing in research and development to reduce
our critical mineral dependency?
Mr. Loris. Yes, sure. I think we have heard a lot of
different predictions over the years about peak oil, about
running out of food. A lot of them have not come true. And in
terms of research and development, our national labs have been
critical in exploring ways to recycle, ways to extract
alternative resources. And I think the more we can have
flexibility in those processes so that they can shift in case
of national security needs shift or economic shift, the better
off they are going to be, and I think the better off the
private sector, working with the national labs, will be able to
pivot.
So, I view the national labs, I view our research
universities, as fundamental in the solution to this all-of-
the-above approach that we need to take.
Mr. Gallego. Right. And again, all of the above.
So, taking this kind of long-term, all-of-the-above
approach to national security, it is clear that our critical
mineral needs and sources will also change. Mr. Mintzes, you
have spoken about the benefits of a circular economy. Why is a
circular economy an effective, long-term national security
solution?
Mr. Mintzes. Thank you, I appreciate that. The reason is we
are not really sure, Mr. Gallego, today what mineral we will
need tomorrow. So, if we build the infrastructure to recycle it
now, we will already have it.
Let's speak about cobalt for a second. Cobalt is not going
to be around in batteries in 5 or 10 years, I don't imagine. It
will be a different metal, won't it? So, why don't we recycle
the batteries now, and the materials we have now, so that if we
make it to the 22nd century, and we are on the verge of another
minerals rush, by then we have reformed the law, surely. But by
then, at least we will have the circular economy infrastructure
we need to actually source the material that we are looking for
at the time.
Mr. Gallego. OK. Thank you. I am not going to ask about
your if we make it to the 22nd century thesis, but I appreciate
everyone's testimony here. And I think to, at least to re-
emphasize, I think both sides have actually had some very valid
claims, and we do need to look at this, but at least I look at
it from a national security perspective. Let's have an all
above, all methods to get that approach.
And I appreciate everyone's testimony. Thank you.
Dr. Gosar. I thank the gentleman from Arizona. The
gentleman from Georgia, Mr. Collins, is recognized, the Vice
Chair of the Committee.
Mr. Collins. Thank you, Mr. Chair, and before I get started
with my questions, I just want to thank you, Mr. Chairman, for
the honor of serving as Vice Chair for this very important
Subcommittee. I am looking forward to serving under you as we
look to unleash American energy and hold the Biden
administration accountable for the America-last policies that
have caused energy prices to rise as high as Chinese spy
balloons.
Now for my questions. Mr. Loris, the Chairman mentioned in
his opening statement that permitting a new hardrock mine in
the United States can take more than a decade. Can you or any
of the other witnesses tell us why this is, and what exactly
causes this process to take so long?
And how has the Biden administration made this even more
difficult?
Mr. Loris. Yes, I am happy to start, and welcome input from
others.
If you look at some of our bedrock environmental laws,
chiefly the National Environmental Policy Act, it has gotten
much harder to permit processes for everything from clean
energy projects to conventional fuel projects. And that, in
conjunction with the seemingly endless litigation for a lot of
these projects, just holds up any type of investment and any
type of development for years in the courts.
And Congressman Lamborn said our environmental regulation
is too stringent, and I think that is the wrong way to look at
it. I think it is that they are incredibly inefficient. We
should welcome strong, stringent environmental safeguards that
protect air quality and water quality. But we can't have
processes where they are just held up for years by certain
agencies.
There is a lot of overlap, there is a lot of duplication,
and then there are a lot of lawsuits from public interest
groups, too. I think sometimes public interest groups can be
helpful for people who don't have the resources to bring forth
litigation, but a lot of times they are doing it because they
just don't want the project being built, which is something I
think Mr. George commented on in his oral testimony.
So, if you look at some of the data, the private landowners
and tribal groups from the years, I think, 2001 to 2013 brought
only 3 percent of the litigation for filing NEPA lawsuits; over
50 percent was from public interest groups. So, we just need a
much more efficient process to get an up-or-down vote on
whether these projects should move forward.
And I think a lot of the private sector in the United
States welcomes stringent environmental safeguards. They just
want some regulatory certainty, more than anything else.
Mr. Collins. Good, thank you.
Would anybody else like to comment on that?
Yes, sir, Mr. George.
Mr. George. Thank you. Yes, I would just add that, in my
experience working on projects that need these types of
permits, whether it be--we just replaced an old oil pipeline in
Minnesota with a brand new one and that took 8 years to permit
and get done--lawsuits, process.
We have a mine right now in Minnesota that has gone through
a process for 20 years. They had their permits, lawsuits. Some
of them were taken back. Now they have been repealed. It is in
the Supreme Court. And that is on an existing mine site, where
they have mined before.
So, the frustration is real. I think certainty is exactly--
what Mr. Loris is talking about--is what is critical.
What I have seen--you asked about what has been done--
banning mining in 225,000 acres where you have these minerals
is a chilling impact on business and exploration and on
companies' willingness to put up money to explore these
projects. There was a particular project in that area that is
now banned, and it has spent hundreds of millions of dollars
already, just to see their leases pulled and mining banned in
the region arbitrarily.
So, I think all of these things are troubling. I think what
you all can do is provide certainty, and not allow government
agencies to bypass a process. Hold them accountable to that,
because right now they are just doing whatever they want, from
my experience.
Mr. Collins. Yes, sir. And I don't want to cut anybody else
off, but I want to go to a quick question that really plays
into that, Mr. George, because there is a lot of talk about
mining and jobs versus tourism jobs in certain parts of the
country. And it seems as though some opponents of domestic
mining like to pit these industries against each other.
As someone in the mining industry, and based on your
experience, how much do tourism jobs pay in comparison to what
mining jobs pay?
Mr. George. Thank you for the question. I can tell you, our
members that will build these mines make, on average, $40 an
hour on the check, in addition to world-class health care,
where there is no family coverage, where there are no premiums,
low deductibles, in addition to a defined benefit pension,
defined contribution plan.
And I can tell you that the tourism jobs--I actually went
on one of the outfitters' websites to see exactly how much they
are paying. They don't advertise how much they pay, but we know
how much they pay, and it is about $15,000 a year with no
benefits.
So, when people in northern Minnesota are told, well, we
just need to innovate our economy and have more tourism jobs,
people up there know exactly what that means. It means a lower
standard of living, period.
Mr. Collins. Thank you.
Mr. Chairman, I had one more question, but----
Dr. Gosar. You will get another chance.
Mr. Collins. Thank you.
Dr. Gosar. I thank the gentleman from Georgia. The next one
is a young lady from Florida, Mrs. Luna.
Mrs. Luna. Thank you, Chairman Gosar. If I can just ask for
unanimous consent to enter this into the record?
Dr. Gosar. So ordered.
[The information follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Mrs. Luna. Thank you. I can't stop thinking about, Mr.
Loris, what you told us earlier about some of this stuff that
you had witnessed with some of the human rights abuses.
Real quickly, what is the youngest age of some of the
children that you have heard have been working in these mines?
Mr. Loris. Ranging from 5 to 6 years old. And sometimes
teens will have babies strapped to them while they are digging
out the cobalt by hand. So, I mean, you are literally talking
about infants at these mindsets.
Mrs. Luna. I just want to share a stat with everyone on the
panel. Children who work in these mines are frequently drugged
to suppress extreme hunger and fatigue of working in such harsh
conditions.
If you can, just pass it that way.
From our perspective, I think everyone on this panel would
agree that if there is a way to move our industry away from
China, it is probably the best thing, from a human rights
perspective.
But my question is, Mr. George, because I am not from a
mining community, I am from a fishing community--how does the
United States' mining standards differ from countries,
specifically in the Congo, or where China is operating to
conduct some of these mineral mining processes?
Mr. George. Well, I can talk about labor standards in the
terms of our rights here in this country to organize unions,
which we have done. And the standards, the people that have
done that, and people have literally died for those rights here
in this country to obtain those rights. And when people
organize and they have unions, that lifts everybody up.
So, whether you are union or non-union, you benefit from
those standards that we set. And----
Mrs. Luna. And sorry to interrupt you. Is it in your
opinion that this Administration's policies have put a
hindrance on domestic mining operations?
Mr. George. One hundred percent, yes. When you ban 225,000
acres of land where these minerals exist, I don't see how you
could argue otherwise.
Mrs. Luna. So, I guess this would bring me to my next
question, Mr. Mintzes.
I had heard your perspective, and I understand what you are
saying about respecting the rights of Indigenous peoples in
regards to mining. However, this Committee has the ability to
recognize that, and I think it is in, again, our opinion, to do
the least harm possible, not just to the environment, but to
other people, as well, right, the human rights perspective.
And if we have the ability in the United States to bring in
these resources, and then export them and ensure that people
are not only being respected, but also, too, that we are
protecting the environment in the process, don't you think that
that would be an opportunity for us to responsibly harvest
these minerals, even if it is on Indigenous lands?
Mr. Mintzes. Thank you, Mrs. Luna, for that thoughtful
question. I think that there are a lot of really great
opportunities for us----
Mrs. Luna. Sorry, can you pause for a second?
I didn't know if that was funny, but I was asking a
question, and so I am just asking for you guys to be respectful
while I am asking the question, thank you.
Go ahead.
Mr. Mintzes. Thank you, Mrs. Luna. I do think that there
are opportunities for us to be able to onshore the stronger
links of the circular economy infrastructure here in the United
States, and that we ought to be able to raise standards here,
labor standards, environmental standards here and everywhere
around the world, which is why, in particular, when the Biden
administration is going to the Mining Indaba in Cape Town, we
are urging real due diligence standards.
And part of the bipartisanship, I think, of this Committee
is we all want oversight. We all want accountability from the
Biden administration. I want to know what those due diligence
standards really are. I want to know.
So, Mrs. Luna, I think we can work together in trying to
figure out how we can raise the standards here and abroad.
Mrs. Luna. Then my final question for you would be, right
now the United States has re-entered the Paris Climate Accord,
and that has enabled places like China to not only go forward
and economically just completely dominate us, but also, too,
from an energy perspective and a mining perspective, they are
not only complicit in human rights abuses, but they are also
destroying the environment.
If we have the opportunity to pull back, would you say that
that would be in the best interest of our country to do so?
Mr. Mintzes. Thank you, Mrs. Luna. That is a really good
question.
I would actually like to associate myself with Mr. Loris'
comments with respect to China's position vis-a-vis rare earth
elements and their position in the market. It is my view that
they have actually lost market share since the recent 2010
trade dispute. So, there are, I think, as we have discussed,
some trade options available to sort of reduce our dependency
that way.
Notably, Senator Wyden, earlier this week, just sent
several letters to a number of original equipment
manufacturers, mostly domestic ones, who were sourcing
materials from the Xinjiang region of China, allegedly. So,
what they are saying, what Senator Wyden is asking, same thing
I am asking, ``Where is your due diligence plan?''
So, we are asking the Administration, we are asking OEMs to
show us how it is that we are making sure that slave labor
isn't happening within their supply chains, so that we can all
responsibly source the materials that we need.
Mrs. Luna. Thank you.
Dr. Gosar. Does the gentlelady yield back?
Mrs. Luna. Yes, sir.
Dr. Gosar. Thank you very much. The gentleman from
Minnesota, Mr. Stauber.
Mr. Stauber. Thank you, Mr. Chair. And Mr. Chair, I ask
unanimous consent to enter into the record an E&E News article
titled, ``Biden admin looks to overseas mining for EV,
renewable needs,'' and it was dated January 23, 2023.
Dr. Gosar. No objection. So ordered.
[The information follows:]
GREENWIRE
Biden admin looks to overseas mining for EV, renewable needs
A State Department official says the Minerals Security Partnership with
allied nations has zeroed in on projects to support around the world
and will require a host of environmental and social governance
standards.
By: HANNAH NORTHEY / 01/23/2023 01:46 PM EST
Politicopro.com/eenews
****
GREENWIRE -- The Biden administration plans to back as many as 16
overseas projects to mine, refine and recycle minerals for electric
vehicle batteries and other renewable technology, while moving forward
with requirements to ensure those deals don't result in environmental
degradation and human rights violations.
Jose Fernandez, the undersecretary of for economic growth, energy and
the environment at the State Department, said during a wide-ranging
interview that the United States and other members of the so-called
Minerals Security Partnership are carefully vetting ``critical''
minerals projects across the globe to support--either through advocacy
or funding.
In doing so, the White House is threading a needle, pushing to advance
climate goals and wrest more control over foreign-produced minerals and
supply chains, even as questions loom about labor abuses and pollution
at mines in some countries. Meanwhile, House Republicans are gearing up
to probe Biden's climate and mineral agenda (E&E Daily, Dec. 13, 2022).
In addition to addressing a massive vulnerability for the U.S. given
skyrocketing demand for battery and green-tech minerals, Fernandez said
the partnership is zeroing in on a host of environmental and social
governance, or ESG, standards that companies and foreign governments
will need to abide by.
``It may be it's not every country will want to adhere to those
principles, in which case, simply, that's been part of what we've had
to do in winnowing out from 170 projects to 16,'' said Fernandez.
``It's our business model, and it's a conviction, but it's also an
understanding that if it gets to see who can extract the most while
doing the least for communities, we're not going to win that game.''
The Biden administration is touting the partnership investments as
complementary to a surge of cash-flowing into the domestic market from
the newly minted Inflation Reduction Act, a climate law that promises a
financial boost for the mining industry in this country given its
mineral sourcing requirements for EVs (Greenwire, Aug. 18, 2022).
Members of the partnership include the U.S., Australia, Canada,
Finland, France, Germany, Japan, Korea, Sweden, the United Kingdom and
the European Union.
House Republicans in recent days have launched a legislative effort to
limit environmental reviews and curb lawsuits to bolster domestic
mining (E&E Daily, Jan. 10). They also want to restrict any business
relationship with the Democratic Republic of Congo, where the Labor
Department last year said a large share of cobalt is mined at
facilities ``where thousands of children work in hazardous conditions''
(Energywire, Oct. 5, 2022).
But Fernandez said any support overseas, should it be done responsibly,
would complement the initiatives in the 2021 bipartisan infrastructure
law and the Inflation Reduction Act, noting that the U.S. is already
seeing more domestic manufacturing.
The partnership, he said, will offer up everything from political
backing to technical guidance, loans, financing through the Export-
Import Bank or International Development Finance Corp., and political
risk insurance, as well as imposing high environmental and social
standards. The potential funding of about a dozen projects was first
reported by Axios.
Federal studies, he said, show demand for minerals that the U.S.
Geological Survey has been deemed ``critical'' to the economy, and
national security will increase fivefold by 2040 as the clean energy
transition unfolds, as well as a forty-twofold increase in demand for
lithium.
``You cannot leave, no pun intended, any stone unturned,'' he said.
``We have to look at domestic supply chain projects, and we also have
to look abroad, and that's what we're trying to do.''
`It is not about China'
The national focus on critical minerals spiked during the Trump
administration amid a trade war with China and has carried over, with
fervor, under President Joe Biden, said Simon Moores, founder and CEO
of the U.K. mining data firm Benchmark Mineral Intelligence.
Minerals have taken on an urgency for the Biden administration as
officials seek to jump-start the energy transition away from fossil
fuels, which will require materials needed to build turbines for
offshore wind farms or EV battery components, as well as other
technology.
``All of this started with the Trump administration . . . they kicked
off the concept . . . they put critical minerals back on the map
because of the trade war with China, and that's been carried through to
the Biden administration with some intensity,'' Moores said.
Fernandez said the focus today goes beyond China, emphasizing that the
goal is to diversify and create a more resilient supply chain both
domestically and abroad given how little of the needed minerals are
produced in the U.S.
``It is not about China. If we've learned anything from the Covid
pandemic, it's that we cannot depend on single-point supply chains,''
he said. ``If you look at rare earths and critical minerals, the U.S.
produces very little. We've got to be able to secure supplies, and the
[Minerals Security Partnership] is intended to be one of the means
through which we do that.''
A recent International Energy Agency echoes that point, noting that the
market for clean energy technology could more than triple in size by
2030 as countries push to fulfill their climate and energy pledges
while also facing supply chain pitfalls (Energywire, Jan. 13).
``As we have seen with Europe's reliance on Russian gas, when you
depend too much on one company, one country or one trade route, you
risk paying a heavy price if there is disruption,'' IEA Executive
Director Fatih Birol said in a release.
China, according to IEA, currently dominates the solar and wind energy
supply chain, while critical minerals are mined in only a small number
of countries. Australia, Chile and China, for example, produce more
than 90 percent of the world's lithium.
The report concludes that international collaboration will be key to
preventing supply chain bottlenecks, a point Fernandez also emphasized,
calling it a challenge that the U.S. and private market cannot solve
alone, but instead a ``vulnerability we're trying to solve with our
partners.''
Each member country of the partnership, he explained, submitted
projects that had company interest, and the coalition winnowed more
than 170 proposals down to 16 ``pilot'' projects--based on factors like
demand for the mineral and investment potential. Once a final lot of
projects is selected for support, the partnership will reach out to
private companies to attract investments, financing or offtake
agreements, he said.
``We've got to get some deals in the door,'' he said, ``but obstacles,
actually, have been surprisingly few.''
`Race to the top'
The partnership spent months discussing what's meant by ESG, said
Fernandez, and is now zeroing in on existing standards that companies
and countries will need to meet in order to receive assistance.
``It will not be a new standard,'' he said. ``I think you will see that
there'll be a choice of different standards, and any of those will
suffice, but they will be standards that will be and that are well-
known and respected in the industry.''
The Organisation for Economic Co-operation and Development, or OECD,
for example, provides so-called due diligence guidance for responsibly
sourcing of minerals in conflict-affected and high-risk areas, while
the Extractive Industries Transparency Initiative, or EITI, is a global
standard for the good governance of oil, gas and mineral resources.
Environmental groups have for months been calling for more
accountability both here in the U.S. and abroad, namely through
requiring companies supplying minerals to commit to obtaining ``free,
prior and informed consent'' from nearby communities and relying on the
use of third-party verification and certification for any voluntary
industry standards.
The Biden administration has already made moves overseas, some of which
have raised eyebrows. The Energy Department, for example, has provided
a $102 million loan to build out a refinery in Louisiana that will
process raw graphite from a mine in the Cabo Delgado region of
Mozambique, where militant insurgents have a history of attacking
resource projects owned by Western companies (Greenwire, May 11, 2022).
Fernandez said countries seeking help from the partnership will need to
display transparency around any bidding process, for example, and
ensure local communities and Indigenous populations are consulted.
``You will see that all around the world, mining projects often run
into local community opposition because they don't take the time to
develop support, and they don't take the time to explain the
benefits,'' he said.
While a recent memorandum of understanding the State Department inked
with Congo and Zambia--two countries rich in cobalt and nickel--did not
stem from the Minerals Security Partnership, Fernandez said it's a good
example of the collaboration that can happen in what he calls a ``race
to the top.''
The State Department pledged to help establish battery processing and
manufacturing facilities in the two African nations, which currently
send most of their raw materials to China--and have been criticized for
child labor in various sectors (Energywire, Jan. 20).
The agreement, Fernandez said, shows how the U.S. can offer its
financial institutions, technical assistance and some of the best
environmental practices in the world to help countries develop supply
chains for battery minerals while meeting high ESG standards.
``We can't compete in a race to the bottom,'' he continued. ``We can
only [succeed] if we . . . follow higher standards and bring more
benefits to local communities.''
______
Mr. Stauber. Mr. Gosar, again, thanks for allowing me, for
waiving me on, and allowing me to question some of our
witnesses.
Mr. George, thank you once again for coming here. I think
this is three Congresses in a row that you have testified on
behalf of mining and your membership in Minnesota. Your
testimony speaks for itself. Banning mining in 225,000 acres of
a working national forest--Superior National Forest is a
working industrial forest.
And guess what? They banned 225,000 acres without any
environmental impact statement, without looking at the specific
mine plan. It was purely political. The biggest copper nickel
find in the world, and this Administration, not only did they
pull the leases and ban mining, including taconite mining, what
they did was take union jobs away because there was a project
labor agreement in place, the best labor standards and best
environmental standards, and this Administration turned a blind
eye.
Yet, the article that I just entered, Biden administration
goes to foreign overseas mining that used child slave labor. It
is unacceptable and immoral that this Administration is using
child slave labor to mine the critical minerals to get to the
green economy.
Meanwhile, many anti-mining lawmakers and advocates look
down on union jobs building our mines, saying they are not
lifetime employment. They are lifetime employment. They are
multi-generational jobs with project labor agreements.
Mr. George, can you explain real quick the importance of
these jobs, and the project labor agreements, the union
membership, and what it does for our communities?
Mr. George. Thank you, Congressman, happy to. These jobs
are dignity. These jobs are respect. These jobs allow people to
raise families. These jobs, those mining jobs in northern
Minnesota are the only reason people are there. And they spin
off. Every industry is related to the mines, as was pointed out
earlier.
So, these jobs could not be more important. And they are
that quality because the standard of living and the labor
standards in our area have been raised by unions like mine.
Mr. Stauber. Mining is our past, our present, and our
future. This Administration banned mining in northern Minnesota
to include taconite mining.
The union members, they have children, they go to our
hospitals, they go to our grocery stores, they recreate up
there. It is simply unacceptable.
Mr. Moats, it is great to see you again, and thank you for
joining us today. And I appreciate you mentioning China's
already enormous and growing percentage of global steel. As you
know, we have been mining iron for steelmaking in my district
for over 135 years. And, as Mr. George says, we have the
cleanest water in the state of Minnesota in the heart of our
mining region.
The mineral withdrawal we discussed earlier includes a ban
on taconite in the 225,000 acres of the Superior National
Forest, which is an industrial working forest. As the United
States loses its steel supply to China, how damaging would it
be to take known and possible taconite reserves off-line to our
production?
Dr. Moats. Thank you for the question. While we recycle a
lot of steel, it always gets degraded. Copper is a bad element,
so we always need a certain amount of virgin material coming
from our iron ore mines.
Therefore, if you want the lightweight steels that are
needed for cars, for tank armor, those types of things, we need
to have mining capabilities in the United States to produce it.
And, of course, your state produces most of our mine from
taconite mines.
Mr. Stauber. Eighty percent of it.
Dr. Moats. Yes.
Mr. Stauber. Thank you.
Mr. Loris, thank you for joining us in the last 30 seconds.
I introduced the Permit for Mining Needs Act, which
provides needed updates to our broken permitting process. It is
supported by the National Association of Building Trades
Unions, energy groups, mining trades, and more. Can you please
discuss quickly how permitting reform and the provisions to
improve mining permitting in my bill will actually lead to
lower emissions in the long run?
Mr. Loris. Yes, as several members and witnesses have
mentioned, if we are not doing the permitting, and processing,
and extraction here in the United States and other developed
countries, it is going to happen elsewhere, especially with a
lot of policies, government-induced demand that is going to
increase the demand for these minerals, and therefore the
prices are going to increase, and that is only going to
increase supplies in other parts of the world.
So, if we don't do it here, where those emissions standards
are the most stringent, emissions worldwide are going to be
likely higher.
Mr. Stauber. Thank you.
Mr. Chair, I yield back, and again thank you for waiving
me----
Dr. Gosar. I thank the gentleman. I am going to recognize
myself.
Mr. George, I want to come back to you. Trust is a series
of promises kept. So, I would look at it that, when we make
agreements in regards to national forests or multiple use of
public lands, you are forming an internal treaty.
On the forest we are talking about, the national forest,
there is something very unusual about this agreement, because
it actually had a buffer system enclosed. Right?
Mr. George. I am not an expert on--are you talking about
the boundary waters, and----
Dr. Gosar. Absolutely.
Mr. George. Yes. Yes, there was. When the boundary waters
were created--and I am not an expert in that policy, but my
understanding is--and we have all come to understand that
mining was an activity that was supposed to happen in the
region.
Dr. Gosar. Right, there were areas set aside for logging
and for mining.
Mr. George. Correct.
Dr. Gosar. So, we have to start looking at this.
And Dr. Moats, actually, one of my other points, you just
can't recycle. You have to add virgin material into almost all
the stuff.
Mr. Mintzes, have we started really any of the recycling
for the solar cells right now?
Mr. Mintzes. Thank you, Mr. Gosar. Thank you for that
question.
Yes, recycling of the solar products is fairly robust. It
is a growing industry. And, in fact, the truth is that, with
respect to the solar industry, I don't think we will need to do
much mining to source the minerals we need for the solar
technologies. We do have weak links in other areas of the solar
supply chain. It is just not in mining.
Dr. Gosar. Dr. Moats, you are shaking your head. Do you
want to respond to that question?
Dr. Moats. So, I agree with him that most solar panels are
already recycled here in the United States. I am very familiar
with some of the processes. They are very robust.
But if you look at--and there have been multiple studies
done that the growth of solar energy that is being projected,
there is no way we are going to be able to recycle to supply
all of the silicon panels and the tellurium that is needed. I
have written several research papers on this, looking at where
we can get more tellurium in the world. And the simple answer
is we need to produce more from our existing operations and
future mines. Thank you.
Dr. Gosar. And you made a statement, I think several of you
made statements in regards to we don't know what the needs are
for the future. And when you start looking that way, you have
to inventory these minerals as we go.
So, are you familiar with some of the new technology, and
actually the smelting process in regards to extraction of some
of these metals, or minerals? In fact, all of the minerals out
of the ore body, Dr. Moats?
Dr. Moats. Yes, we have several research projects ongoing
at the university, and I am aware of other ones, as well, where
we are looking at advanced technologies to really analyze why
are we not recovering more.
The current research believes that about--again, we will go
to tellurium, because that is what I have been looking at most
recently--60 to 90 percent of the tellurium that is mined is
not being recovered. Why is that? Why are we not doing that?
So, we are using advanced technologies and looking at why that
is, and that can be applied across the board to all of our
mining operations, all of our processing plants. And that is
what I would encourage you to look at.
Dr. Gosar. Thank you.
Mr. Mintzes, again, why would it be a problem that we have
existing mine sites--for example, a manganese mine site--in my
district?
Why would the Federal Government, because of technology
that we have today that we can extract almost all the manganese
from those tailings that are sitting there, why would the
Federal Government resist and say no to that?
Mr. Mintzes. Thank you, Mr. Gosar, for that question. The
Federal Government has said yes, resoundingly has said yes. The
infrastructure law funded $320 million to the United States--I
think that is right--to USGS to do exactly what you just
described.
And it is my understanding, it is my belief--and I am not a
geologist, but I think the geologists are pretty excited right
now, because there are real opportunities to, for example, look
at mine waste as a potential source of some of these materials.
I think it is really important.
There are some places where that actually may--I am going
to just speak for some of Earthworks' constituents. We have had
some people come to us and say, ``Under some circumstances that
could be a good idea, that could work.'' Others have said,
``No, no, no, we are already an EPA Superfund site. Please
don't come back here and start mucking around in the metals
already.''
So, the answer is yes, Mr. Gosar, at least in some areas,
under some circumstances, that is a viable opportunity.
Dr. Gosar. Well, I would agree. But we need to make it
uniform all the way across the board. If these are sites that
have had previous mining, yes, we ought to make sure that those
areas are prioritized. And that has not been the case in
Arizona, with the manganese.
My time has expired. We have votes any time now, if I am
not mistaken.
Do we want to do a second round?
OK, you are up.
Ms. Stansbury. Well, thank you, Mr. Chairman. I appreciate
it, and I am trying not to talk with my mouth full, so I
apologize.
But I do want to take this opportunity as we are closing
out this hearing to just revisit some of the discussion today.
And I really want to frame this conversation around the urgency
of this issue. I think some of that got lost in the details
today.
This is not only a national security emergency for the
United States. This is about making sure that we can make good
on our responsibility to ensure that we are not passing a
global tipping point in climate change over the next decade. If
we do not address these supply chain issues, we will not be
able to implement the technologies and changes to our energy
systems that will enable us to cut carbon emissions so that we
can hit our carbon emissions standards to prevent catastrophic
climate change.
So, this is an urgent issue. It is a national security
issue. It is an economic issue for the United States, and it is
a global issue. But in the pursuit of addressing these global
and national security issues, we cannot return to this. We
cannot mine and permit our way to a solution, I think as we
have heard here today.
And I don't think anyone in this room--obviously, those of
us who serve on this Committee care deeply about nature, the
environment, the outdoors--I don't think anyone in this room
wants to return to the past, where corporations went into
communities, made mining claims, and then strip-mined them. I
bet we have a lot of outdoors people here, a lot of fishermen,
a lot of people who are hikers and spend time outside. Can you
imagine?
What I am hearing in this hearing--and I think oftentimes
the false equivalency that gets put forward--is the idea that
if we just gutted our environmental laws, if we just took away
the Clean Water Act, if we just took away the Clean Air Act, if
we just got rid of NEPA, we could just open up all these mines
and solve this problem.
Well, first of all, that is not true. That is not going to
solve the problem. And I don't think that anyone in this room
wants to return to an era when we had rivers on fire, when
smelters were poisoning children and communities across the
country, and where, when people went to their favorite fishing
spot or a tribal community went to pray in one of their most
sacred sites, they found that a mining claim had been laid and
strip-mined. I don't think anyone wants to return that to that
era. And, certainly, I don't think American workers want to
return to that era.
So, what we need to do is really take an approach that is
smart, that is science-based, that is a human-rights-based
approach that really addresses this issue from all aspects.
Of course, we have to address the international security
and trade issues. Of course, we have to address the human
rights abuses that are happening from the sourcing of some of
these minerals.
And I want to be clear. This is a mine with cobalt. We are
talking about dozens of different minerals across the world.
There are mines that are doing responsible sourcing that do
have good labor practices. But what we need is to make sure
that we have a multi-pronged approach that addresses these
issues.
Finally, I just want to say that this body has already
taken significant action to help address these issues. This
last Congress we passed a Bipartisan Infrastructure Law. It
makes some of the largest investments in infrastructure in the
history of our country in certain sectors, particularly in
natural resources, and it includes a number of provisions that
will help to build out a sustainable supply chain for our
critical minerals.
We also passed the Inflation Reduction Act in August. And
while we did not have bipartisan support for that bill here in
the House, what I can tell you is that it is the largest single
investment in climate action, not only in the history of the
United States, but the history of the world. And it sets us on
a path not only to clean energy for the United States, but
energy dependence and the ability to address the catastrophic
change that will happen from global climate change.
The future of our country, of our communities, and of our
children depends on bipartisan action on this issue. And, Mr.
Chairman, I deeply appreciate your bipartisanship this morning,
and truly look forward to working with my colleagues across the
aisle, because the urgency of this issue demands that we do.
Thank you, Mr. Chairman, and I yield back.
Dr. Gosar. I will take the liberty of making one comment.
If we are worried, really worried, about climate change, we
ought to be looking at bringing the smelting process back to
the United States. Think about this. This is heavy material. It
is being transported out, transported back. That is an
unnecessary type of a process. So, we need to start looking
differently, and that is what Einstein said. Don't think more,
think differently. And I think we can make this all work.
The gentleman from Montana is recognized for 5 minutes.
Mr. Rosendale. Thank you, Mr. Chair. We have been hearing a
lot of discussions about the mining law of 1872, and that is
the only thing that groups act like that we are relying upon in
order to authorize, permit, and open a mining facility. And I
just really, really think that that premise needs to be
clarified here.
There is an awful lot of additional regulation, and the
problem is that this body has allowed those regulations to be
drafted and created by outside agencies, thereby granting them
the ability to impose those just like they are the rule of law.
Well, we are supposed to be the lawmakers, and we need to make
sure that we provide that clarity for industry.
We need to provide that clarity for the agencies, and it
hasn't happened. And because of that, there are groups that
have emerged across the nation that have financially benefited
from the different laws that are put in place, making sure that
they are able to get their legal fees back again once they tie
up many of the mines, and extractive industries, and harvesting
of timber, things that, again, would not only benefit the
nation economically, financially, and from a national security
standpoint, but actually help the environment, as well, because
it is just good management of the land.
So, Mr. Moats, I would like to ask you, it is clear that we
don't rely just upon the mining laws of 1872. Could you tell me
just a few of the things that an organization would have to go
through, and the permitting that they would have to achieve in
order to open up one of these facilities?
Dr. Moats. Thank you for the question. Again, I am not
sure, as I am not a mining engineer, and I am not sure that I
know the depth of the knowledge that I would like to have to
answer your question.
I do know that the 1872 law is one of the laws. There were,
again laws in 1970, and a revision in 1977, and another one in
the 1990s. And then every state and every local community can
have their own laws.
I think before the House, the National Mining Committee, or
National Mining Association, brought before you, and it is in
your minutes from the last Congress where they brought forth
the poster that they made to permit a mine in the state of
Nevada. And it started over there, and it went all the way
around the room, and it is quite extensive. And there are now
mines in Minnesota and Arizona that have been trying to be
permitted for 13 to 15 years.
And I would just echo what has already been said by my
fellow witness, which is I don't think we are asking to get
away and gut existing laws. I think the mining industry and the
processing industry just wants certainty.
If you look at the Australians and the Canadians, they have
a 2-, 3-year permitting turnaround. You can make business
decisions. Right now, with the uncertainty, open-endedness of
whether or not, who is in the administration that is in charge,
and whether or not licenses will be pulled and so forth, it is
the uncertainty.
I can give you numerous examples over my career where
people have brought in--we could have a copper smelter in Texas
right now, except for that a company from, we will say an Asian
country, not an allied Asian country was going to put one in in
Japan. I mean, Japan was going to put in a smelter in Texas.
And after having to deal with the permits for 10 years, they
said, no, we are not going to do that. So, it is a real
problem.
Mr. Rosendale. Thank you very much. And, again, if none of
us are sure what minerals and elements are going to be utilized
and most efficient in 10 years from now, it certainly makes it
difficult to drive permitting today for something that is
unknown.
Once we determine what we need, if it is going to take
another 10 years or 20 years before you can actually refine it,
mine it, and utilize it, by then it very well could be replaced
by yet another mineral.
And I can tell you that, in the state of Montana, which is
known as the Treasure State because of all of the minerals that
we produce, we have not issued a new mining permit in 20 years,
in 20 years, and that is a shame.
Mr. Chair, I yield back.
Dr. Gosar. I thank the gentleman from Montana. The
gentleman from Arizona is recognized, the Ranking Member.
Mr. Grijalva. Thank you, Mr. Chairman, and I am one that,
in my time on this Committee, I have hated this second round of
questions, but I am going to take advantage of it today.
[Laughter.]
Mr. Grijalva. Dr. Moats, this time sequence issue. We are
dealing today--the urgency is that, as my colleagues across the
aisle have made pointedly clear today, and yesterday, and the
day before, is that the Biden administration is effectively not
only standing in the way, but making it impossible for the kind
of critical mineral extraction in this topic to get done. That
is the timeline that we are dealing with right now, politically
and, I guess, in terms of a reaction to a policy. It is the
Democrats, it is this, and that, and that is the timeline, 2
years.
Things were much rosier for the previous administration
during those 4 years? Everything was fine? The regulatory
demand wasn't there? NEPA wasn't there? Litigation wasn't
there?
Dr. Moats. Thank you for the question. No, this has been a
problem for 20, 30 years.
Mr. Grijalva. And the root of the issue is still, in my
mind and your reaction, an antiquated mining law that has not
been reformed, updated to this particular century we are in?
Dr. Moats. I would not classify my comments that way. I
think the mining law has been modified, maybe the mining law
has not, but there has been additional legislation that has
been passed that all the mining companies and processing
companies have to adhere to.
Mr. Grijalva. And it was around issues of public health,
primarily, where they started to get generated in the 70s, when
health issues became the critical question.
So, that is the root of why this discussion is going on,
the practices and abuses of the past. And that legacy is not
something that people want to repeat. The processes that are
being put in place and being talked about now are--in terms of
permitting reform--to begin to eliminate some of those
protections. And as the Ranking Member said, the complexity of
this issue doesn't mean that you leave something behind that
was put in place in order to protect public health and
communities.
I think this question is not simplistic, and this question
is not going to be solved by just talking about permitting
reform and the poor mining companies.
The other question I would like to ask, Mr. Mintzes, is
ownership. I mean, this isn't the guy that was putting things
on his boot and going up the mountain to look for gold and
silver, 1872 kind of style. We are talking about multi-
national, foreign-owned companies across the whole area.
One of the things I have been promoting, if we are serious
about, is that those mining companies that have those
horrendous human, environmental, and labor abuses, and are
doing businesses in other parts of the world, wouldn't it be
prudent for the United States to ban them from doing business
on our public lands and waters, as a consequence to those
practices, as a deterrent to those practices, as an incentive
to stop those practices?
Mr. Mintzes. Forgive me, Mr. Grijalva. Do you mean as an--
go ahead.
Mr. Grijalva. We keep talking about this as an American
issue, and it is. But the ownership and the exploitation of
most of these minerals is foreign, including Chinese. Even some
of the mines in Arizona have a percentage of which are Chinese-
owned. So, should they be banned? Because they are the bad
guys.
Mr. Mintzes. Thank you, Mr. Grijalva. You illustrate a
really important point about the way the 1872 mining law
functions. And I am going to defer to you and to your
colleagues who serve on Armed Services to make decisions about
what is in our national security.
What I am suggesting, though, is that if anybody, foreign
or domestic, friendly or not, can stake a claim to American
minerals, and then they own those by virtue of this statute, I
am suggesting that makes me feel insecure, so that is why we
are urging your reform, so that we have a leasing system for
public lands minerals, where we can have an upfront suitability
determination, and know who is going to be leasing these
things, and other reforms, too.
Mr. Grijalva. And apply and provide assurety to the private
sector and assurety to the workers at that level. I think that
is why this law works against that assurety, I think.
Anyway, I yield back.
Dr. Gosar. I love the gentleman's--where he is going with
this. But you never do treaties from a weak point, you do it
from a power of strength. So, in the aspect of trying to say no
to China, we actually make it worse for us and better for them.
Look what we did with Russia, with oil. We said we were
barring them. Oil shot up. They had more profits. They had more
tanks. They had more things to buy with that money.
So, once again, this goes back to what Einstein said: Don't
think more. Think differently. I will give you an example.
What if I told you about oil sands, and the gentlemen, the
three chemists who figured out how to extract oil sands, want
to give it to the American people? They don't want to give it
to a company, they want to give it to the United States. It is
very profitable. They can produce a barrel of oil, sweet crude
that we have very little of, for $11 a barrel. Wow. Wow. So, we
have to think creatively here, and we can't pick one aspect.
The gentleman from Georgia is recognized for 5 minutes.
Mr. Collins. Thank you, Mr. Chairman.
Before I get into some other comments, Mr. Moats, or Dr.
Moats, I think your comment on 20 to 30 years is exactly why I
am here today. We are sick and tired of the agencies in this
Federal Government regulating and pushing people out of
business. It is one of the reasons we have an oversight in
every Committee that we have up here. They act like they are a
fourth branch of government, and they need to be brought under
control. So, I appreciate your comment.
The Chairman was talking about solar panels. As someone
that is in the transportation industry, you may not realize
this, but we utilize solar panels. And, today, we can't hardly
get them because there is such a backorder on them. So, they
are being utilized more and more, and we really don't know what
the potential for solar panels are. So, that is just another
added example of how we need to be mining, instead of just
recycling.
Mr. George, I wanted to follow up on something real quick.
You were talking about replacing a pipeline that took 8 years,
an old mine that was trying to get re-permitted, and it took
over 20 years. I understand there are regulations and then
there is Federal Government just dragging their feet.
Do you have percentages of how much of that was litigation
versus just the Federal Government dragging their feet?
Mr. George. I probably can't give you a percentage, but it
is both. It is local, state government dragging its feet, those
agencies, it is the Federal Government permits dragging their
feet or just ignoring permit requests. It is lawsuits. It is
litigation. It is all of it.
And I would just add real quickly, my friends here who are
talking about recycling, I don't know if you have ever been
around a metal recycling plant, but good luck getting those
permitted.
Mr. Collins. Thank you.
Mr. Loris, I had a question at the very beginning. We
didn't get to it. You referenced a decline in metal smelters
and refineries in the United States. And why have we lost our
domestic facilities, and how do we compare with competitors
like China?
I think we are down to, what, two, maybe three copper
smelters in the United States? Three? Versus what, 50 in China?
Mr. Loris. That might be more for Dr. Moats. I think he has
more information on that.
I will just say I think it is a combination of factors. I
think regulations certainly play a part. I think the flooding
of markets and competition abroad certainly play a part and
certainly render some of these things uneconomical.
But Dr. Moats is more of an expert on that than I am.
Dr. Moats. We currently have three copper smelters and two
copper refineries in the United States. There is a German
company who is looking to install a secondary or a recycling
smelter in Georgia. Aurubis is getting the permits and, I
believe, is starting to break ground.
Why did we used to have 13 to 14 smelters when I started my
career and have shut down? It is because of (1) the mining
grades have declined; (2) because it is more profitable for
mining companies to export the minerals than to upgrade their
existing smelters, so they shut them down from an economic
standpoint.
Mr. Collins. Is that due to regulations?
Dr. Moats. That is part of it. I mean, they have to adhere
to the Clean Air Act, and the Clean Water Act, and all the
other acts, and all the local things. So, they made an economic
decision that it was more profitable to ship the minerals
elsewhere. It is not just copper, it is lead, it is zinc. It is
many.
Mr. Collins. Thank you.
Thank you, Mr. Chairman. I will yield back.
Dr. Gosar. The gentleman from Minnesota is recognized.
Mr. Stauber. Thank you, Mr. Chair, and I just want to
reiterate some comments from Chairman Westerman, and this is to
our Ranking Member.
We have to reform our permitting process in order for us to
mine, bring processing and manufacturing back to our country.
That is a great start. That is going to help secure our
strategic national security.
I have a question for Mr. Moats, and the question is this:
If today China and Russia stopped selling us rare earths and
critical minerals, what would it do to our national security?
Dr. Moats. It would be devastating. I mean, we can't
survive. Not just us, but the entire world is dependent on
China, specifically. But the Russians produce some nickel and
some platinum group metals, so we are also dependent on them.
It is an inter-connected world economy. And if you take off the
China, specifically, because they produce 40 to 50, to 80 to 90
percent of each of these things, it would be devastating.
Mr. Stauber. I just want everyone to understand his answer
to my question. If today the Communist country of China and
Russia stopped selling us their rare earths and critical
minerals, his response, it would be devastating to the United
States.
How can we allow that to happen, the strategic national
security, when we have these natural resources in the palm of
our own hand, in our country, using our environmental and labor
standards? How did we get this way? Why?
And then I entered into the record the E&E News article,
where this Administration goes to foreign nations to process
these. Give me a break.
I want to just reiterate something that was the question my
friend from Georgia asked. The Boundary Waters Canoe Area
Wilderness was incorporated in 1978. The Democrat Member of
Congress who sat in this position, James Oberstar from
Minnesota, did not support that. He did not support the
wilderness, taking that off-line.
But the fact of the matter is the wilderness was made, and
then a buffer zone around the wilderness was put forth. And I
want everybody to know there will be no mining in the Boundary
Waters Canoe Area Wilderness, and there will be no mining in
the buffer zone around it. But like my colleague way back in
the late 70s said, ``If you are going to make this wilderness
on that outside, do not take our livelihood away,'' and he was
referring to timber, harvesting, and mining. He was so far
ahead of us in his thinking, because he knew today we would be
fighting for these jobs and these minerals. That is how far
Congressman Oberstar was ahead of the thinking.
And it really, really pains me to hear your answer that it
would devastate the United States of America. We need to have
permitting reform to mine in our country, to process, and
manufacture. We, for strategic reasons, need to do this, and I
am looking forward to a healthy debate on how we can do that,
how we can bring back our manufacturing, and our mining, and
our processing to the shores of this country.
If we didn't learn anything from COVID, shame on us. Shame
on us. The dependency that we have allowed this nation to go
forward and depend on adversarial nations for our strategic
national security, we can't allow that. We have to change
course today.
And I yield back.
Dr. Gosar. I thank the gentleman. I am going to recognize
myself, and then I want to prepare the witnesses. One of the
things I have always done in the past is ask you, after I am
done with questions, what was the one question you wanted to
have been asked? What is its answer, but it was never asked?
So, I thank the gentleman from Minnesota. I want to enter
into a colloquy with him, if he will stay behind.
Are mining and enjoying the wilderness and the environment
mutually exclusive?
Mr. Stauber. We can do both. We have proved we can do both,
because we have been mining for 135 years in northern
Minnesota, and northern Minnesota is a great recreational area
to live, work, raise a family, and make a good wage.
Dr. Gosar. I also would ask him, who is more stringent on
things in our backyard, the Federal Government or the people of
the towns, counties, and cities of Minnesota?
Mr. Stauber. The towns, counties, and cities have their
pulse on these issues. And as Mr. George said, they support
mining on the Iron Range.
Dr. Gosar. Do they also believe in the same principle that
I brought up of Einstein, think differently, not more,
particularly with the re-purposing of the taconite mines?
Mr. Stauber. That is correct.
Dr. Gosar. Great fishing there, right?
Mr. Stauber. Very. I would say, Chair Gosar, would you
yield to me for 20 seconds?
Dr. Gosar. Sure.
Mr. Stauber. You came up to northern Minnesota several
years ago with my predecessor in the Western Caucus. The same
issues that we were dealing with back then, the same two major
mines, it has been how many, 7, 8 years ago. And the permitting
for one of the mines is in its 20th year, and another going
into its 10th year.
And the biggest copper nickel find in the world, 95 percent
of the nickel, 88 percent of the cobalt, over a third of the
copper and other platinum group metals are sitting in a
beautiful reserve in northern Minnesota.
Dr. Gosar. I am going to take it from there.
Dr. Moats, there were comments made today in regards to the
permitting process. Part of the problem that I have found--and
I am the one responsible to getting the Resolution Copper
through Congress, but we still haven't mined a damn thing--is
the bureaucracy. The bureaucracy, you have people inserted that
believe that they are there to stop something. That is not what
I understand. My understanding is they are here to facilitate
the implementation of the laws that Congress passes. Are you in
agreement with that?
Dr. Moats. Having done my degree at University of Arizona,
bear down.
I have listened to Rio Tinto talk a lot about the
Resolution Copper project over the years and, of course, they
are very politically sensitive, and don't really say anything.
But it seems very clear that, when they make a step forward, it
is two steps back for many years. And we are now over 13, 15
years trying to permit that, and I know there are lots of
problems with that. There are tribal lands, there are deep,
deep mines, there are lots of issues related to that.
So, I think, again, what my colleague next to me said, I
think the mining companies are just looking for clarity on--
there is a fixed time, and if we don't make it through, then we
don't make it through, so we can make an investment somewhere
else, as opposed to just the uncertainty of if we will ever be
allowed to do this.
Dr. Gosar. And I also want to set the record straight.
So, royalties. There are royalties that are paid for this,
right? They just go to the state.
Dr. Moats. Yes, there are royalties.
Dr. Gosar. Yes, that is what I thought.
I agree with the certainty. And one of the things that I
have been very poignant with Resolution Copper is trust is a
series of promises kept. Everything you do, go for transparency
and go above the grade.
They have done more than their fair share. They have
invested over $1 billion to reclaim the mine that was there
before, $1 billion. No one talks about that. None, notsoever.
So, now I am going to go to Mr. Loris. And what was the
question you wanted to ask that wasn't asked, and what is its
answer?
Mr. Loris. Just quickly, one, I think, is just a lot of
these conversations are about trade-offs, and those trade-offs
can be very difficult conversations from an environmental
standpoint. Some people might like an unobstructed river, some
people might like a dammed-up river, because it provides clean
electricity. So, having those conversations about environmental
trade-offs is often complicated, and we should acknowledge
those complications.
I would also add that we have talked a lot about community
engagement and respecting the rights of tribes, which I think
is critically important for any process moving forward.
I think we also need to be cognizant of when tribes are
supportive of these projects. The Thacker Pass mine in Nevada,
the McDermitt Tribe is supportive of that. Indigenous groups
have been supportive of oil and gas development in Alaska. So,
I think it cuts both ways.
Dr. Gosar. Thank you.
Dr. Moats?
Dr. Moats. Thank you. I feel like I have been asked a lot
of questions. I think the question that I would like to have
been asked is why don't we do rare earths in the United States?
And the short answer is we know where they are. We know how to
get them. We know how to make the metal. So, why aren't we?
And that resides to--many of the questions that we have
here is whenever we are doing this, we will always produce
waste. And that waste that comes out of rare earths is
radioactive. It is the thorium, it is the elephant in the room.
So, until we come up with a policy and a plan to deal with
thorium, we are going to be beholden to other countries, and we
are going to export our wastes somewhere else. Thank you.
Dr. Gosar. I am very aware of that. In fact, in La Paz
County we have a deposit of Scandium that has no association
with thorium. So, why aren't we mining? Just FYI.
Mr. Mintzes, your question?
Mr. Mintzes. Thank you, Mr. Gosar, I appreciate this. I
actually want to take a shot at the permitting question.
Dr. Gosar. OK.
Mr. Mintzes. Is that OK? OK. I disagree with my dear
friends here sitting next to me.
I believe that the average time it takes the BLM and the
Forest Service to permit a large hardrock mine on public lands
is 2 years, according to the Government Accountability Office.
And when you look at the mining company's own data that they
annually supply to the Fraser Institute, which is a Canadian
think tank that is supported by the mining industry, for
exploration permits the amount of time is 11 to 14 months here
in the United States, 8 to 10 sometimes, OK?
And just quickly noting that, as we discussed, under the
1872 mining law, if you explore, you discover the valuable
minerals, that is kind of the ball game. So, 8 to 10 months,
maybe 14 months to get an exploration permit, then it is ball
game under the 1872 mining law. So, that is my two cents on
mine permitting reform, besides what the Congress did last
time.
Thank you, Mr. Gosar.
Dr. Gosar. Thank you, Mr. Mintzes.
The gentleman from Minnesota is recognized for his
question.
Mr. George. Mr. Chairman, you touched on this briefly. The
question that I was hoping would be asked is, and I touched on
it briefly, too, what do the people that live where the
resources are think? They want to mine the resources, is the
answer to that question.
And why don't we trust them? Because they want to mine them
responsibly. It is their back yard. They are the ones that are
going to hold the mining companies accountable to labor
standards, to environmental standards. They are never going to
support a mine that would not follow those. I wouldn't. Why
aren't we allowed to do what we know we can do, and why doesn't
anybody trust the people that live in these areas is the
question that I have.
Dr. Gosar. That is a great, great question. And one of the
things that I will tell you, and particularly on the way that
Arizona was admitted into the country, they were forced to take
the Federal Doctrine, but they were actually guaranteed the
multiple-use doctrine aspects of public lands for the maximum
to be shared.
So, in that aspect, it implies contract. And in that
contract, it is not the Federal Government as a last resort, it
is the State. So, we have to start looking at this creatively.
The Federal Government has been given way too much power. That
was the exercise that happened earlier this year. We had made a
speaker much too powerful. It wasn't the person, it was the
position. And the correcting aspect is the 10th Amendment.
Folks, this has been a great meeting, great conversation.
And with that, I adjourn this meeting.
[Whereupon, at 11:13 a.m., the Subcommittee was adjourned.]
[ADDITIONAL MATERIALS SUBMITTED FOR THE RECORD]
Submission for the Record by Rep. Grijalva
COBALT INSTITUTE
Hon. Bruce Westerman, Chairman
Hon. Raul Grijalva, Ranking Member
Natural Resources Committee
1324 Longworth House Office Building
Washington, DC 20515
Hon. Paul Gosar, Chairman
Hon. Melanie Stansbury, Ranking Member
Oversight and Investigations Subcommittee
Natural Resources Committee
1324 Longworth House Office Building
Washington, DC 20515
Dear Chairman Westerman, Ranking Member Grijalva, Chairman Gosar,
and Ranking Member Stansbury:
I write on behalf of the Cobalt Institute noting that your
Committee conducted hearings last week to examine the critical minerals
supply chain. The Cobalt Institute is a global trade association
composed of producers, users, recyclers, and traders of cobalt, and our
members include companies in the US and North America.
Cobalt is vital for lithium-ion batteries as used in our phones,
computers, and electric vehicles. It is also essential for defense and
aerospace applications, for example through the production of
corrosion-resistant super alloys, and well as in magnets, wear-
resistant tools, high-strength steel, pigments and coatings, and as a
catalyst for the desulfurization of oil.
Summary
In the coming decade, the cobalt value chain, batteries and green
technologies will be a major driver of growth and job creation in the
United States. With the right conditions for industry, the US has the
potential to be a leader, securing market share and creating resilient
supply chains based on successful home-grown businesses. This will only
happen with early, decisive actions, taken in cooperation with
international partners. Areas and regions that are first movers will be
well-placed to benefit from the industry's growth. The Cobalt Institute
is a leading authority on the cobalt industry and can support
understanding of the industry and the opportunities that exist.
In terms of the topics being explored by the Committee.
On diversification, the Democratic Republic of the Congo (DRC) will
remain an important source of cobalt. Its government has indicated its
eagerness to work closely with the United States and develop ``win-
win'' partnerships on the supply of critical minerals, including
investment in mining, processing, refining and infrastructure.
Diversification is possible, with the world's second largest cobalt
reserves being in Australia, and large reserves being available in
Canada, Indonesia, the and the Philippines. Cobalt is typically mined
as a byproduct of copper and nickel mining. Additionally, cobalt is
highly recyclable and--with the right policies--the United States can
establish a largely circular economy for cobalt.
On human rights: Conditions at artisanal and small-scale mining
(ASM) sites in the DRC are generally poor. The ASM cobalt sector is
largely informal and connected to some very negative impacts including
highly hazardous working conditions, gender discrimination, unfair
trading practices, and, in certain instances, child labor. ASM remains
a business reality in the Congolese cobalt supply chain and cannot
simply be shut down. Cutting ASM out of the cobalt supply chain is
neither feasible, due to the interwoven nature of the cobalt supply
chain, nor desirable from a development perspective. Rather than
excluding the ASM sector from markets, a truly just transition would
bring artisanal workers and communities along by promoting
formalization, capacity building, professionalization of mining
techniques, and fair-trading practices, among other drivers to improve
outcomes for ASM communities.
Diversification
There is enough cobalt for the US to achieve a resilient long-term
supply of cobalt, albeit it also needs to take steps to ensure it can
continue to access these resources. Globally, new cobalt streams can be
brought online in a number of ways, including undeveloped mining
assets, extracting cobalt from tailings sites, recycling, and--assuming
it can be done sustainably--nascent exploration of deep-sea resources
(where there is estimated to be 120m tons of cobalt, compared to 8.3m
on land \1\). While the US does have exploitable cobalt reserves, there
will remain a need to source cobalt by other means.
---------------------------------------------------------------------------
\1\ United States Geological Survey, Mineral Commodity Summaries
2023--Cobalt.
---------------------------------------------------------------------------
Lithium-ion batteries will be the main driver of demand for cobalt
over the next decade. This growth is expected to be significant,
primarily driven by the increased use of electric vehicles. While there
are many alternative cathode chemistries available for electric
vehicles, none can match the range, performance, durability, and
sustainability of those containing cobalt, which is why they have been
the preferred technology choice for manufacturers.
It is possible to achieve increased diversification of supply
chains for cobalt, but there will remain a need to source from the
Democratic Republic of the Congo (DRC). Therefore, it is important for
the US to engage in the DRC and invest in it as well at the same time
as seeking partnerships outside of the DRC. The recently signed
Memorandum of Understanding is a step in the right direction. The DRC
recently outlined plans to secure more of the battery value chain,
including refining and cathode manufacturing, domestically. There is an
opportunity for the US to support and benefit from this.
One advantage cobalt-containing chemistries have versus some other
cathode types is their high recyclability. The US can take advantage of
this if it plans ahead. Cobalt is a valuable metal, and this makes
cobalt-containing batteries economically attractive for recyclers.
Cobalt is also highly recyclable from cathodes (90%+) and endlessly
recyclable, helping used batteries be efficiently transformed into new
batteries, while reducing the need for primary cobalt. It's worth
nothing that alternative cathode chemistries may also use critical
minerals but without the ability to be well recycled. Recycling rates
have doubled through 2010-2021, going from 4% to 9% in 10 years.
Recycling is expected to continue to rise especially due to new
technological innovations that will come onstream. It is expected to
reach 20% of the total cobalt supply in 2030.\2\
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\2\ The Global Cobalt Socio-Economic Analysis (SEA), Cobalt
Institute/Wood Mackenzie, 2021 (can be made available on request).
---------------------------------------------------------------------------
However, whilst recycling can play an important role in the medium
term, there will also be a need to use primary cobalt in the coming
years. Reserves of cobalt in the DRC constitute about 48% of all global
reserves; Australia has the second largest (18%), with Indonesia third
(7%. Significant reserves also exist in Canada, Madagascar, and the
Philippines. Diversification is therefore achievable.
As with many industries, refining of cobalt is currently
concentrated in China (72% \3\). Cobalt refining does take place in
developed Western economies, and there is the potentially for this to
be ramped up if there is a political desire to do so. The second
largest refining country is Finland albeit at only 8% of global supply
and Canada at 4%.\4\ The DRC recently outlined plans to try to secure
more of the battery value chain domestically--including domestic
refining of cobalt and cathode production--to secure more value
addition from their natural resources. This plan will require
investment, both in facilities themselves but also in associated
infrastructure, and the US is well-placed to support them.
---------------------------------------------------------------------------
\3\ Wood Mackenzie.
\4\ ibid.
---------------------------------------------------------------------------
It is also important to note that batteries can be used for years
once manufactured. This means supply chain fluctuations would likely be
more of an industrial concern than a consumer one.
We suggest a number of ways to achieve stable long-term cobalt
supplies. This includes broad mining capacity (DRC, rest of world, and
domestic) as well as investment in domestic mining capacity and
exploring possibilities for sea-based resources.
Below are some specific policy recommendations for each of these,
the totality of which will contribute significantly to supply chain
resilience:
1. Domestic mining--the US is unlikely to be self-sufficient for
cobalt from its own land-based reserves however it does
have reserves that it can exploit, and this can certainly
support supply chain resilience.
2. Democratic Republic of the Congo--the current administration in
the DRC has a reasonable relationship with the US and is
keen to secure economic growth from its natural resources.
There is an imperative on the US to engage proactively with
its government, to support its ambitions and to make
strategic investments in projects and infrastructure. This
would help the US secure access to cobalt whilst also
creating additional supply. It should be a key part of its
international engagement.
3. Invest outside the DRC--more mining capacity needs to be
developed in the next decade to meet the expected demand
for cobalt. US and Western companies can make those
investments across the world in order to ensure long-term
stable access to cobalt. The US Government might choose to
make these investments a strategic priority, especially in
countries like Australia and Canada.
4. Recycling--a circular economy for cobalt can be established,
although the main barrier currently is collection rates for
used batteries. Policy mechanisms could support the
collection and recycling of end-of-life batteries. This
will take time to create, so primary materials will be
needed until a critical mass of recycled content is
achieved. The EU has already done work on this via its
proposed Battery Regulation.
There is also the opportunity for the US to support investment in
cobalt refining and processing capacity. This can be done profitably in
Western nations but tends to have migrated to China where the economics
have typically made more sense for companies. There is notably also a
trend toward the co-location of the electric vehicle supply chain--
vehicle manufacturing, battery production and cathode production--which
means having a robust value chain for cobalt creates synergies for the
whole green economy. Therefore, having processing and battery
manufacturing capacity is a catalyst for competitive electric vehicle
manufacturing.
Human rights
The majority of all cobalt mined in the DRC comes from industrial
mines that are mostly operated by large or global companies. Some 12%
of DRC supply is estimated to come from artisanal and small scale
mining (ASM),\5\ although estimates are difficult to make and can vary
between 10-20%. Responsible mining practices is a priority for the
cobalt industry. The mining industry provides the resources necessary
for creating and developing modern materials and enabling technological
progress and, as a responsible industry, has also provided substantial
benefits including economic advantages, environmental stewardship,
health and safety standards, social welfare, infrastructure, education
and training, alternative livelihoods and human rights awareness.
---------------------------------------------------------------------------
\5\ Cobalt Institute, State of the Market report (produced by CRU),
2021.
---------------------------------------------------------------------------
We acknowledge that conditions at ASM sites generally are poor. The
ASM cobalt sector is largely informal and connected to some very
negative impacts including highly hazardous working conditions, gender
discrimination, unfair trading practices and in certain instances child
labor.
The production of cobalt from artisanal sites in the Congo
represents the second-largest cobalt-mining sector in the world after
industrial production in the DRC. Cobalt extraction through ASM
therefore is an important source of cobalt and an important development
opportunity for the DRC, on the condition that responsible practices
can be established.
ASM remains a business reality in the Congolese cobalt supply chain
and cannot simply be shut down. Cutting ASM out of the cobalt supply
chain is neither feasible, due to the interwoven nature of the cobalt
supply chain, nor desirable from a development perspective. Instead,
companies committed to setting up responsible cobalt sourcing practices
must consider how to take responsibility for addressing the severe
practices that blemish the ASM sector.
The Cobalt Institute advocates on the need to move forward mindful
of the need for a green, equitable and just transition. Rather than
excluding the ASM sector from markets, a truly just transition would
bring artisanal workers and communities along by promoting
formalization, capacity building, professionalization of mining
techniques, and fair-trading practices, among other drivers to improve
outcomes for ASM communities. Failure to do so risks amplifying the
existing inequities that have exacerbated the climate crisis. It also
drastically reduces the ability of downstream companies, particularly
those subject to ever more stringent human rights due diligence
legislation and import bans, to source artisanal cobalt at all without
risking significant penalties.
The Cobalt Institute advocates for standards that reflect the
unique needs of the ASM sector and that are aligned with international
frameworks such as the U.N. Guiding Principles on Business and Human
Rights and the OECD Due Diligence Guidance. This must be accompanied by
the recognition from downstream users, and indeed regulators, that
these cannot be achieved overnight and that there must be upfront
investment and capacity building to support sites to progressively meet
these standards.
Addressing deep-rooted challenges that hinder the progress of the
ASM cobalt sector is not the sole responsibility of any individual
company. Only by working through a multi-stakeholder approach with key
actors in the supply chain, globally and in the DRC, including the
government, cooperatives and concession holders, civil society,
workers, as well as companies further up the value chain, will
effective systems that promote responsible cobalt practices be
developed. Coupled with standards, is the need to address the root
causes driving some of these severe practices through multi-stakeholder
approaches.
There are several initiatives already set up to with the objective
of achieving formalization of the ASM community and eradication of
child labour, which the CI is engaged with. However, although there has
been some effort recently for the initiatives to coordinate amongst
each other, and particularly through the RMI's creation of an ASM
Coordination Dialogue Group, it is hard to get access to the data to
demonstrate the collective impact they are having on the ground. We
therefore call for more transparency and disclosure of these efforts
and common metrics to help us to demonstrate tangible progress to
stakeholders and the country itself.
Key initiatives and partners include, among others:
The Fair Cobalt Alliance (FCA)
Responsible Minerals Initiative (RMI), which is developing
its ASM Cobalt Criteria (formerly spearheaded by the Global
Battery Alliance's Cobalt Action Partnership). It also
convenes an ASM Coordination Dialogue group.
The Entreprise Generale du Cobalt (EGC)
Cobalt For Development (C4D)
Global Battery Alliance
Pact
OECD
U.N. Global Compact
Responsible Batteries Initiative
Copper Mark
Better Mining
Drive Sustainability
Afrewatch
SARW
US Department of Labor
EU DG for International Partnerships (DG-INTPA)
ILO
Project COTECCO
The political and legal context has been challenging and impeded
progress to making positive changes on the ground. The Cobalt Institute
advocates for the DRC Government to be clear and coherent on its
commitment to progress the formalization of the ASM cobalt sector. This
in our view is key to instilling greater confidence amongst downstream
players and financial institutions to invest in formalization efforts
as well as in other ambitious plans the Congolese Government has to
retain more value in-country through the development of a local battery
value chain.
The Cobalt Institute believes that the solution to ASM governance
must be on Congolese terms, in accordance with Congolese law, and in
line with existing formal and informal governance frameworks, at
national, provincial, and on-the-ground levels. Congolese agency must
be a key part of the discussion.
The Cobalt Institute is keen that all international actors handling
matters relating to ASM acknowledge Congolese frameworks and
institutions already involved in this issue, including--but not
exclusive to--the following:
Clauses in the Mining Code covering ASM, such as
stipulations on Zones d'Exploitation Artisanale (ZEAs) or
requirements around cooperatives.
The Service d'Assistance et d'Encadrement de
l'Exploitation Miniere Artisanal a Petite Echelle
(SAEMAPE), the oversight body charged with improving
conditions on ASM sites.
The Entreprise Generale du Cobalt (EGC), with the mandate
to manage formalized ASM sites, and which has staff,
equipment, and an established purchaser, albeit without
ZEAs on which to operate, and with its legal monopoly in
question.
The Autorite de Regulation et de Controle des Marches de
Substances Minerales Strategiques (ARECOMS), with the
mandate to set regulation and standards in the artisanal
sector, albeit as yet not operational.
The Centre d'Expertise, d'Evaluation et de Certification
(CEEC), charged with certifying the origin of mined
material.
The Musompo trading centre of the Lualaba provincial
government, the management of which is subcontracted to Sud
South, aimed at ensuring traceability and improved
standards in the trade of ASM cobalt.
The Cobalt Institute recognises--and communicates clearly to our
partners--that the Congolese government is willing and able to work
with large scale miners (LSM) and ASM operators and wants to welcome
further operators and Western investment.
The Cobalt Institute acknowledges the existing regulatory
frameworks on community development alongside LSM, which provide
substantial volumes of finance from LSM operators toward local
development outcomes. These include, but are not limited to:
The requirement that mining firms implement a commitment
register (cahier de charges)
Community endowment (dotation)
Local government share of royalties (redevance miniere)
The Fonds Minier pour les generations futures (Fomin).
This receives funds from the royalties.
The Cobalt institute acknowledges the existing informal norms for
governing ASM operations developed by ASM actors themselves, which rely
on informal contracts and structured informal organizations.
Concluding remarks
The Cobalt Institute advocates a coordinated approach to critical
minerals sourcing, based on using US foreign policy and labor standards
to raise standards, whilst also supporting security of supply.
Political engagement with sourcing countries will create ``win-wins''
for the US, that include access to critical minerals and ensuring US-
standards of worker safety and protection are ensured. This will also
bolster the competitiveness of US companies and industries in fast-
growing sectors.
On artisanal mining, industry is keen to work with the U.S.
Government and Congress to address concerns and ensure the highest
standards of human rights are maintained, including for example through
supply chain transparency initiatives.
We look forward to the opportunity to be a resource to you and your
staff and thank you for your kind consideration of this communication.
Sincerely,
Caroline Braibant,
Interim Director General
[all]