Importing Critical Minerals from Allies and Tracing Origin Important, Witnesses Say
A House Oversight Subcommittee on Economic Growth, Energy and Regulatory Affairs hearing focused on the need for more domestic mining of critical minerals, but administration witnesses noted that imports -- and subsidizing processing of domestically mined minerals -- are just as essential to uninterrupted supply.
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Isabel Munilla, deputy assistant secretary for market development, climate and multilateral engagement in the Energy Department's Office of International Affairs, said imports make up more than half of consumption for 31 critical minerals, "and we rely entirely on foreign sources for more than a dozen of these minerals,"
She said the U.S. needs to find raw materials from multiple countries. "However, that alone will not be sufficient to establish resilient supply chains. A lack of processing and refining capabilities (midstream), as well as manufacturing (downstream), often poses a greater risk to supply chain robustness than the sources themselves," she wrote in her written testimony. She said the U.S. is second only to China in the volume of rare earth elements (REE) it mines, "but we ship much of our REE concentrate to the [People's Republic of China] for future processing and refining. For most critical materials, midstream processing represents the greatest U.S. challenge."
She said because Chinese government interventions mean their processing companies don't have the same profit-making pressures as competitors, "resulting market distortions have made it very difficult for midstream processing capabilities to be built in the United States or other countries."
"It's clear that our global dependence on a single source for our materials leaves the U.S. and our allies vulnerable to economic coercion such as we've seen using export controls earlier this year," she said in her opening statement. "Our reliance on non-allied foreign sources is neither sustainable or secure."
Halimah Najieb-Locke, deputy assistant secretary of defense for industrial base resilience, pointed to recent Chinese export restrictions on gallium, germanium and graphite as evidence of "the urgency of securing U.S. supply chains against such tactics."
She testified that bolstering domestic capacity is important, but critical minerals supply chains are global and complex, and the U.S. must engage with allies "to diversify global critical material supply chains and remove dangerous bottlenecks endangering secure access."
She said the administration is advocating for legislation that would allow Defense Production Act investment in Australian and U.K. processing or mining -- to consider them as domestic sources, just as Canadian production is considered part of the domestic industrial defense base.
Munilla said collaborating with allies can expand the quantity of critical minerals, and keep the prices affordable. "As part of this process, it is important to build capabilities for tracing and verifying the mineral origin for advanced batteries, magnets, and other manufactured products," she wrote in her written testimony.