Legislation Introduced to Address Impending Rare Earth Supply Chain Crisis

Rare earth elements are absolutely essential for the manufacture of a variety of today's innovative technologies, including wind turbines, hybrid-electric batteries, computer hard drives and precision-guided munitions.

But, the United States is totally dependent on foreign sources for these minerals.

As I have posted about before, China currently provides virtually all (up to 97 percent, by some estimates) of the world's rare earth raw materials and dominates all aspects of rare earth refining, alloying and manufacturing.

According to the United States Magnet Materials Association (USMMA), here in the U.S., there is one rare earth mine and processing facility (which is not mining), one major United States Geological Survey-validated deposit of rare earths in Idaho, two small alloying facilities and one significant rare earth magnet producer. That means the nation's supply chain for critical renewable energy and defense systems is nearly non-existent, and that the U.S. is dangerously vulnerable to potentially unreliable foreign nations.

Earlier this week, Colorado Congressman Mike Coffman introduced legislation to address what I think could very well be an impending rare earths crisis.

Coffman's bill would:

Establish a Federal government rare earths working group, with representation from senior appointees of the Departments of Commerce, Defense, Energy, Interior, and State as well as the Office of the U.S. Trade Representative and the Executive Office of Science and Technology Policy at the White House;

Assess the domestic rare earth supply-chain to determine which rare earth elements are critical to America's national defense and economic security;

Create a national stockpile within the Department of Defense for important rare earth materials;

Evaluate international trade practices in the rare earth materials market relative to market manipulation and initiate appropriate action through the World Trade Organization and elsewhere;

Provide government-backed loan guarantees for domestic rare earths supply-chain development;

Initiate warranted Defense Production Act projects and programs relative to our national defense and homeland security; and

Support innovation, training, and workforce development of the entire domestic rare earth supply-chain.

The full text of the bill can be found at http://coffman.house.gov/images/stories/hr4866.pdf.

TAGS: Finance
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