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American Resources Policy Network
Promoting the development of American mineral resources.
  • While Some Reforms Fizzled, Enacted NDAA Contains Potentially Precedent-Setting REE Sourcing Provision

    As we have noted, the recently-signed John S. McCain (may he rest in peace) National Defense Authorization Act for Fiscal Year 2019 (H.R. 5515), stands as a missed opportunity to enact several meaningful mineral resource policy reforms.

    Nonetheless, one provision of the signed legislation marks an important development for the realm of resource policy – so important, in fact, that Jeffery A. Green, president and founder of J. A. Green & Company and member of the ARPN panel of experts calls it “the single biggest legislative development in the rare earth sector since the 2010 Chinese embargo created an awareness of our military’s reliance on foreign rare earth materials.”

    The NDAA’s Section 873, “Prohibition on acquisition of sensitive materials from non-allied foreign nations,” amends Subchapter V of chapter 148 of title 10, U.S. Code by inserting section 2533c – which, among other things, effectively prevents the Pentagon from sourcing of Rare Earth Magnets from China.

    In response to questions from InvestorIntel, Green provides some more context:

    “The new law which sets an increased budget for defense expenditure prevents the purchase of rare earth magnets from China, which currently produces 85-90% per cent of the world’s rare earth magnets. Some 90% of rare earths consumed by the US military are produced by China.

    The new law takes effect immediately, but practically speaking, it will take the DoD some time to implement the law through regulation and to start including the prohibition in new contracts.

    To be clear, this law only applies to the use of Chinese NdFeB (Neodymium, Iron, Boron) and SmCo (Samarium, Cobalt) magnets, the latter being already subject to a previous law requiring domestic sourcing.

    The new law, 10 U.S.C. 2533c, closely mirrors an existing domestic sourcing law, ‘the specialty metals clause’, at 10 U.S.C. 2533b.  While the latter is a Buy American clause, the former states DOD will not allow rare earth magnets and tungsten in weapon systems that is produced by potential adversaries.

    The law explicitly prohibits rare earth magnets and tungsten from being ‘melted or produced’ in China, Russia, North Korea and Iran. That means the production of the magnet can’t be in those countries, so importers and distributors can’t simply bring magnet block into another country and finish into a final part – the law is designed to reinvigorate rare earth magnet manufacturing outside of China.”

    As Green had previously stated in a piece for Real Clear Defense as the bill was being considered by lawmakers:

    “While a good first step, and one long overdue, Sec. 873 addresses just a small percentage of America’s import dependence for essential military components. In next year’s NDAA, Congress should consider expanding this provision, with input from the technical experts at the Department of Defense, to include other critical minerals essential to national security.”

    With the precedent-setting passage of the amendment, the groundwork has been laid for this to actually happen. Writes Green:

    “The DOD may ask in the near future for new materials to be added to 10 U.S.C. 2533c, so there’s a good chance that this precedent continues as the Trump Administration seeks to eliminate the strategic vulnerability of foreign import reliance for critical materials – this bodes well for prospective producers outside China and Russia.”

    Read the full InvestorIntel piece here.

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  • “From Bad to Worse” – Why the Current Focus on Critical Minerals Matters

    Earlier this spring, the Department of the Interior released its finalized Critical Minerals List.  Jeffery Green, president and founder of government relations firm J.A. Green & Company and member of the ARPN panel of experts reminded us in a recent piece for Defense News why the current focus on our over-reliance on foreign mineral resources is relevant. Writes Green:

    “(…) America’s critical minerals problem has gone from bad to worse. The nation’s only domestic rare earth producer was forced into bankruptcy in 2015 after China suddenly restricted exports and subsequently flooded the market with rare earth elements. Adding insult to injury, the mine was then sold last summer for $20.5 million to MP Mine Operations LLC, a Chinese-backed consortium that includes Shenghe Resources Holding Co. Now, according to MINE Magazine, this same mine is exporting critical minerals to a processing plant in China—because the United States cannot process or refine these materials at commercial scale. 

    Without a dramatic change in minerals policies, the United States will not be able to minimize the economic damage that will come when China decides to leverage its minerals monopolies against us.”

    Green outlines several key steps stakeholders should focus on:

    • Creating a “whole-of-market approach to spur innovation in minerals production” – i.e. removing “regulatory hurdles that dissuade would-be investors,” including, most notably, reducing permitting delays.
    • Focusing on “existing Department of Defense programs designed to support the U.S. defense industrial base.” Writes Green: “Each branch of service has a ManTech program intended to improve the productivity and responsiveness of the industrial base and to enable manufacturing technologies.” However, Green believes budget requests for FY 2019 are too low: “[D]edicating just 0.025 percent of the budget to the next generation of manufacturing technologies is nowhere near enough to catch up to China and shore up domestic capabilities.”
    • Ensuring that ManTech and DPA projects are not only prioritized but that respective funds will fill vulnerabilities in the defense industrial base. Writes Green: “Building resiliency and operational capacity throughout the supply chain requires investing in more than just the finished product to include the many tools, technologies, and processes that get us there. With a calculated and strategic focus on filling these gaps in the supply chain, American companies can rise to the task.”
    • Combating unfair trade practices “that have bankrupted American mining companies and left us dependent on China for minerals essential to the defense industrial base.”“The United States must make clear it will not tolerate these practices, and will take a strong stance against continued, aggressive trade actions.”

    As Reuters columnist Andy Home has outlined, coming up with a list of Critical Minerals was the easy part. Green’s suggested list of policy recommendations gives us another glimpse into what comes next – the hard work of overhauling policies to appropriately address our nation’s critical mineral supply issues.

    Click here to read the full text of Green’s piece.

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  • EPA’s Bristol Bay Watershed Assessment: A Factual Review of a Hypothetical Scenario

    Testimony presented by Daniel McGroarty – Oversight Hearing of the U.S. House of Representatives Committee on Science, Space & Technology Subcommittee, August 1, 2013 Chairman Broun, Ranking Member Maffei, Members of the Committee: Thank you for the opportunity to testify today. My name is Daniel McGroarty, and I am president of the American Resources Policy [...]
  • Awareness for REE supply chain issues grows in U.S. Senate

    In a column for the Washington Examiner, Ron Arnold, executive vice president of the Center for the Defense of Free Enterprise, asks why President Obama won’t “let the Defense Department face the rare earth security risk,” stemming from the severity of our mineral resource dependency on China. He cites Congressman Mike Coffman, sponsor of Federal [...]
  • American Resources Policy Network Invited to Take Part in National Defense Stockpile Report

    U.S. Defense Agencies Look to ARPN Experts for Critical Input on Metals and National Security The American Resources Policy Network has been invited by the U.S. Defense Logistics Agency/Strategic Materials (DLA/SM) and the Institute for Defense Analyses (IDA) to take part in the 2015 National Defense Stockpile (NDS) Requirements Report process, assessing potential shortfalls in [...]
  • The Epoch Times on why the Pentagon wants “to buy rocks”

    The Epoch Times’s Matthew Robertson takes a closer look at the Pentagon’s request to Congress “for over a billion dollars. To buy rocks” – at a time when budget cuts should be the order of the day in Washington. He notes that while in previous years, the Department of Defense merely noted China’s near-total monopoly [...]
  • North of 60 Mining News piece traces DoD “About-Face” on REEs

    In a comprehensive new piece for North of 60, Mining News publisher Shane Lasley zeroes in on the Department of Defense’s apparent course reversal on Rare Earth Elements in which the Pentagon recommended the establishment of strategic stockpiles for seven REEs in the near term. This “about-face,” as Lasley calls it, comes less than a [...]
  • New DoD stockpile report finds mineral shortfalls

    In his latest piece for Real Clear World, American Resources principal Dan McGroarty reviews the Department of Defense’s just-released National Defense Stockpile Report to Congress against the backdrop of our mineral dependencies. According to McGroarty, the report reflects a re-thinking on the part of the Pentagon, where, less than a year ago, researchers downplayed the [...]
  • U.S. Department of Defense Studies Alaska’s Rare Earths Potential

    As the Canadian daily Chronicle Herald reports, the U.S. Department of Defense is conducting a study of Canadian mining company Ucore’s rare earth-rich Bokan Mountain property in southeast Alaska. Under the auspices of the Defense Logistics Agency, the study will “focus on the possible development of Bokan Mountain to meet defence department requirements for an [...]
  • American Resources expert discusses defense implications of rare earth shortages in new policy brief

    Earlier this year, a Department of Defense analysis stunned many with its conclusion that concerns about Rare Earths supply shortages were exaggerated. Jeffery A. Green, founder of the Strategic Material Advisory Council and American Resources expert, explains how the Pentagon misses the mark in its assessment in a new policy brief for the Center for [...]

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