Lawmakers to use Defense bill to advance minerals policy

Manuel Quinones and Annie Snider, Greenwire

Lawmakers calling for greater U.S. production of rare earth elements and downstream technologies are planning to continue using the defense appropriations process to advance their agenda.

Rep. Hank Johnson (D-Ga.), who yesterday announced he would co-chair the new congressional Rare Earth Caucus, said he would fight for the 2013 National Defense Authorization Act to include measures to promote rare earths. In a statement, Johnson said, “A strong rare earth policy will reduce our dependence on China and create American jobs.”

About 5 percent of the rare earth materials consumed in the United States go toward the defense sector, but the materials are critical for key military systems including smartbombs and fighter jets. DOD is in the process of tracking down where the materials appear in its supply chain as a first step toward devising a broader strategy, but some lawmakers say the department is moving too slowly.

Advocates cite DOD’s dependence on the materials as a reason that the department should create a stockpile of rare earth elements and related technologies — a move that would provide a boost to domestic production. Critics, however, say this is just a ploy to tap the Defense budget to support industry.

Johnson is working closely on the issue with Rep. Mike Coffman (R-Colo.), the caucus chairman and a colleague on the Armed Services Committee. Coffman has authored several provisions on rare earths, including ones pressing the Defense Department to get a better handle on its use of the materials. Two of those provisions wound up in the 2012 Defense spending bill.

One requires the DOD agency in charge of strategic minerals to devise a plan for establishing an inventory of rare earth products, including magnets. The other requires the secretary of Defense to study the feasibility of recycling, recovering and reprocessing rare earth elements that are in everything from fluorescent lighting to weapons systems.

Jeff Green, a former Armed Services Committee staffer and lobbyist for rare earth companies, said the Pentagon still needed to do more to assess its rare earth element vulnerability. He is counting on Coffman and Johnson to push DOD to finish work on previous and future congressional mandates on the issue.

“The Defense Department seems to be having a hard time really nailing down their internal demand and coming up with their mitigation approaches,” Green said in an interview. His company, J.A. Green and Co., recently formed an advisory council on strategic materials, which includes retired military officers.

With production of rare earths elements still predominantly in China, companies elsewhere are reaching out to lawmakers about what they can provide. “There has definitively been good engagement with members of the Rare Earths Caucus and outreach by industry,” Green said.

Australia-based rare earths producer Lynas Corp. Ltd., one of Green’s clients, spent $80,000 in lobbying last year. Molycorp Inc., the current U.S. leader, spent more than $600,000, disclosure records show.

Legislative language authored by Johnson and Rep. Ed Markey (D-Mass.), ranking member of the House Natural Resources panel, wound up in H.R. 2011 passed in the committee last year. The measure also included proposals by Coffman (E&ENews PM, July 20, 2011).

But with the legislation still waiting in line for consideration by the full House, and the Senate stalled on its own proposals, boosters say spending bills are a useful policy avenue. Johnson said: “We’ve got to move more aggressively on rare earths and the defense bill is a great vehicle.”