During yesterday’s oversight hearing on the subject of “Examining Consequences of America’s Growing Dependence on Foreign Minerals,” before the House Natural Resources Committee, panelists raised some of the key issues we have consistently highlighted on our blog.

Panelists included:

• Mr. Ronnie Favors, Administrator, U.S. Defense Logistics Agency, Strategic Materials, U.S. Department of Defense
• Dr. Murray Hitzman, Associate Director for Energy and Minerals, United States Geological Survey
• Dr. Richard Silberglitt, Senior Physical Scientist, Rand Corporation
• Ms. Katie Sweeney, Senior VP, Legal Affairs and General Counsel, National Mining Association
• and Ms. Carlotta Tilousi, Council Member, Havasupai Tribe, Sepia, Arizona

Full written testimony along with the video of the hearing are available on the committee website, but we wanted to highlight some of the points raised by one of the panelists, Dr. Silberglitt.

Invoking the example of Tungsten, and the findings of a “RAND Corporation Study entitled Critical Materials: Present Danger to U.S. Manufacturing,” Dr. Silberglitt argued that

“Dependence on imports is not necessarily a problem, as long as manufacturers have access to a global supply chain with fair market prices. Concerns arise when supply chains are dominated by countries that have weak governance or exercise control over their materials production sector. In such cases, U.S. manufacturers are vulnerable to export restrictions that limit their access. This can result in lower prices for manufacturers in the producing country, thereby hindering the international competitiveness of U.S. manufacturers and creating pressure to move manufacturing away from the United States and into the producing country.”

The elephant in the room, according to Silberglitt, is – you probably guessed it – China, which as ARPN followers know is the biggest producer of global supplies for many metals and minerals we are dependent on — and is no stranger to export restrictions and other market distortion tools.

According to Silberglitt,

“Actions to increase resiliency can take two different forms: those that encourage diversified production and processing of critical materials and those that involve the development of alternative sources, such as secondary production or alternative inputs to manufacturing.”  

Silberglitt said progress was being made in the former, but maintained that “the uncertainty created by a highly concentrated market is a barrier that must be overcome by actions at the local, national, regional and global levels to create a favorable and sustainable climate for the investments and time needed to bring diversified supplies into place.”

Later in the hearing, the National Mining Association’s Katie Sweeney made the case for a merit-based review of federal land withdrawals, and stressed the issue of an onerous and duplicative permitting system hampering the United States’ ability to compete with jurisdictions like Canada and Australia – both of whom have equally high social and environmental standards when it comes to mining yet offer a significantly more streamlined permitting structure.

Towards the end of the Q&A, Chairman Paul Gosar (R-Ariz.) entered into the record a study recently authored by the latest member of the ARPN expert panel – Dr. Ned Mamula’s “Strategic Minerals: The Embarrassment of Riches.” Most panelists agreed with the thrust of his report that the United States, which has vast mineral resources beneath our own soil, could and should do more to harness this potential.

With a Senate hearing on the permitting processes at the Department of the Interior and the Federal Energy Regulatory Commission for energy and resource infrastructure projects also held yesterday, this week is a good week for mineral resource policy awareness on Capitol Hill. Here’s hoping policy makers mull over what they heard during the holidays and begin tackling the issues at hand in the new year.