Dependency on China for Critical Minerals Examined in Hearing

The House Natural Resources Committee's Oversight Subcommittee hosted witnesses and advocates of mining and recycling at its Feb. 9 hearing. Committee Chairman Bruce Westerman, R-Ark., said, "There’s a whole lot we agree on. I’ve testified in these trade disputes before -- the Chinese government, they don’t care about cost fixing, they don’t care about playing fair." He said not only do they have a cost advantage in labor, they will use slave labor, and their lack of environmental regulations also makes their production cheaper.

The end result, he said, is "to drive our producers out of business to capture that market share, and they do it in many different industries. We do need to work on trade. We need to make American mining, processing, and manufacturing stronger than ever before."

Professor Michael Moats, the department chair of the Materials Science and Engineering Department at the Missouri University of Science and Technology, said, "We were once a metal mining powerhouse. We need to reverse course."

He noted that many critical minerals are byproducts of primary metal and mineral smelting -- such as tellurium, needed for solar panels, a byproduct of copper refining -- and that China's production of those primary metals dwarfs our own. China has 40 copper smelters and plans to build another four in the near future -- the U.S. has two, he said.

"If you refine the copper, you control the tellurium," he said.

Not all of our dependency is on China, he noted -- gallium, a mineral needed for WiFi equipment and semiconductors, is a byproduct of aluminum, and we rely mostly on Canada for aluminum, which is not a geopolitical risk.

Subcommittee ranking member Rep. Melanie Stansbury, D-N.M., emphasized that interdependency on allies is to be expected. "We’re not just talking about one mineral, we’re talking about dozens of minerals," she said. "There’s not a simple solution here, that’s one of the things I want to highlight. We’re going to have to work with our allies who are also seeking these minerals."

Some Republican questions focused on environmental costs preventing U.S. production, and on the lengthy litigation that stalls or stops new mines or new refining plants.

Stansbury said her mother worked as a union mining worker until the oil bust caused her father to lose his job in rural New Mexico. She said, "Much of what has happened was not around domestic policy" and "more has to do with international trade," and foreign countries' production effects on global commodity prices. "This is a problem for every major … ally in the world," she said.

Moats supported that perspective, though he said the last domestic lead smelter's closure was a result of the higher costs imposed by EPA regulations. He said the U.S. can start refining gallium and indium where it's already processing zinc in Tennessee. He said the germanium that is recovered there is sent to Europe, where it's refined and then exported back to the U.S.

But, he said, the financial support for more critical minerals production in the U.S. may not be enough to make domestic production cost-competitive with the volume that will enter the market from China as that country continues to expand its refining.

He asked rhetorically: "Are we as a country going to do the things we need to to protect the plants we need?"

Rep. Doug Lamborn, R-Colo., questioned Moats on where the U.S. is 100% reliant on China, and the implications for our national security. Moats said more than 50% of cadmium telluride used in grid-scale solar panels comes from China; he said that night vision goggles use a combination of bismuth and tellurium, and while the U.S. does produce some tellurium, it is mostly exported and refined abroad.

Rep. Pete Stauber, R-Minn., asked Moats: "If today China and Russia stopped selling us rare earths and critical minerals, what would it do to us?"

Moats replied, "It’d be devastating." He said China produces 80% to 90% of some minerals.

Stauber responded, "How could we allow this to happen? When we have these natural resources in the palm of our hand. How did we get this way?"

Moats said one of the problems is that the waste produced when refining rare earths is radioactive, and the U.S. does not have a policy for storing radioactive waste. Until that is solved, the U.S. will source it outside its borders, he said.

After the hearing, subcommittee Chairman Paul Gosar, R-Ariz., issued a statement on what was learned. "U.S. dependence on foreign sources for critical minerals has reached alarming rates. Sadly, Mr. Biden and Democrats in Congress don’t see this as a problem, or they simply don’t care. While the magical fantasy of roads filled with only electric cars occupy their dreams, the reality is Democrats have no concept, let alone a plan, to address the complexity of our growing reliance on critical minerals. We must stop the funding and profiteering of hostile foreign countries, many who rely on unconscionable child labor to line their pockets. Instead, we must fight to advance American economic and energy security while providing American working men and women good paying jobs and ensuring revenues flow to our communities that help fund investments in our environment and education."