Rare earth minerals critical U.S. national security issue ‘with potentially severe consequences'-House Rep. Coffman TNR.v, CZX.v, LMR.v, RM.v, WLC.v,

Washington is slowly getting into the Lithium and REE issues. TREM 2010 which held its place in the capital has provided an alarming set of facts to the government authorities and has issued a set of recommendations for implementation. Will there be any action taken? - you never know with politicians, but this move is a first sign of recognising the importance of secure strategic supply of materials for the new economy based on clean tech, electric cars and smart grid systems. Question is rather simple in nature: who will finance companies involved in Lithium and REE supply chain like International Lithium Corp and TNR Gold American companies, Japanese, Koreans or Chinese? Only one North American company - Canadian Magna has been involved in strategic Lithium deal in Argentina recently in a sharp contrast to aggressive move of Chinese companies in Australia and even more aggressive approach of Japanese Trading Houses in Argentina, Canada and Nevada.

"TREM 2010 is the most important event that will present the information on how technology and rare earth metals are crucial parts of the national security supply chain and necessary mechanism of a green economy. The event will serve as the best forum for mining companies, prominent trade associations, defense and cleantech companies, consultancies and financial institutions. The important substances like Lithium, Rare Earth Metals, and other Technology Metals are required to be observed by policy influencers and decision makers. The event will offer the chance to operate the policies that shape the method America produces, imports and uses technology metals. TREM 2010 is the best location to congregate with principal personalities from the US Departments of Defense, Energy, Interior, Commerce and State."

Technology and Rare Earth Metals for National Security and Clean Energy Assistant Secretary Sandalow Announces New Initiative The inaugural policy summit of TREM is truly a unique event. At our proceedings on March 17, 2010, Assistant Energy Secretary David Sandalow has announced a new initiative. "I am today announcing that the Department of Energy will develop its first-ever strategic plan for addressing the role of rare earth and other strategic materials in clean energy technologies. The plan will apply the approaches described above and draw on the strengths of the Department in technology innovation. We will build on work on these topics already underway, including in DOE’s national labs, and work closely with colleagues from other agencies throughout the U.S. government. We will solicit broad public input, including from the stakeholders and experts here in this room." Full text in the following document. Sandalow Rare Earth Speech - final.pdf Congressman Coffman Announces RESTART Bill Introduction In keeping with the high impact of our event, on March 18, 2010 Congressman Mike Coffman (CO-6) reported on the new Rare Earth Supply-chain Technology and Resources Transformation Act (RESTART Act) introduced the day before in Congress. The Act would require that the United States develop a policy to: "take any and all actions necessary to ensure the reintroduction of a competitive domestic rare earth supply chain, to include the reintroduction of the capacity to conduct mining, refining / processing, alloying and manufacturing operations using domestic suppliers to provide a secure source of rare earth materials as a vital component of national security and economic policy." The full text of the proposed act is in the following document. RESTART Act hr4866.pdf Securing America's Technology Metals Supply Lithium, Rare Earth Elements and other technology metals are critical ingredients in the world’s most sophisticated devices, ranging from advanced weapons systems to renewable energy and clean technology applications. Despite the strategic importance of these elements, and domestic availability, America is almost entirely dependent on a few foreign sources. TREM '10 will not be a standard industry gathering. TREM '10 is a gathering of senior government policy makers and influencers, technology companies from the minerals, defense, energy and automotive sectors. Together, they will discuss and change the policies that affect the way America imports, produces and uses technology metals. This is your best opportunity to influence the policies that will enhance the security and diversity of lithium, rare earth metals, and other technology metals. You will explore and understand the implications of America's growing dependence on imported technology metals and help craft a roadmap outlining the steps to ensure their security and diversity of supply. This roadmap will be distributed to Senate, Congress and US Government agencies to help formulate policies to secure the nation's supply and enhance domestic production. Be a part of the TREM Process UNDERSTAND the technology metals needed for national security and clean energy INFLUENCE the policies that affect the way America produces, imports and uses technology metals INTERACT with key figures from the US Departments of Defense, Energy, Interior, Commerce and State JOIN executives from mining companies, prominent trade associations, defense and cleantech companies, consultancies and financial institutions CONTRIBUTE to the recommendations and roadmap distributed to Congress SECURE America's reliable and diverse supply chain for national security and clean energy

POLITICAL ECONOMY

TRADE ACTION SOUGHT IN CHINA REE MICRO-MANAGEMENT

Rare earth minerals critical U.S. national security issue ‘with potentially severe consequences'-House Rep. Coffman

U.S. House committees and representatives are getting serious about the U.S. rare earths supply chain, China's plan to create a Rare Earth OPEC, and reviving domestic rare earth mining and exploration.

Author: Dorothy Kosich

Posted: Friday , 19 Mar 2010

RENO, NV -

Rep. Mike Coffman, R-Colorado has introduced legislation in the U.S. House of Representatives aimed at developing a domestic supply of rare earth minerals that are vital to the manufacture of critical advanced technologies such as wind turbines, hybrid vehicles and missile guidance systems.

The House Subcommittee on Investigations and Oversight of the House Committee on Science and Technology is already moving full speed ahead on the lack of a domestic supply of rare earth minerals and the lack of an REE policy for the U.S. in general.

Subcommittee Chairman Brad Miller, D-North Carolina, said, "The United States not so long ago, was the world leader in producing and exporting rare earths. Today, China is the world's leader. If we intend to foster a home-grown capability to make the devices that provide wind energy, we need to rebuild America's capability to supply its own needs in rare earth materials."

The U.S. Geological Survey says between 2005 and 2008, 91% of U.S. REE consumption came from China, which is now reducing its exports of rare earth materials. Worse for U.S. manufacturers, China is working to leverage its REE deposits to bring the manufacture of the high-value added products using rare earths to China Inner Mongolia Region.`

"We need to learn how to compete in attracting and retaining manufacturing firms that need access to rare earth elements in light of China's near monopoly, and their willingness to use their monopoly power to our disadvantage," Miller said.

Among the proposed solutions: increasing domestic REE exploration; finding new overseas suppliers; research to find substitute materials; research to reduce the amount of rare earths needed; and increased recycling of REE materials.

In a news release Thursday, National Mining Association CEO Hal Quinn said, "The march 17 announcement by DOE that it will cooperate with the Department of Defense to investigate the use of these minerals in sophisticated weapons systems is especially welcome in view of China's virtual monopoly on worldwide supplies of these materials and recent indications that China will limit exports to meet its growing domestic needs."

Terrance P. Stewart, managing partner of the Washington D.C. law Stewart and Stewart, is so concerned about China's combination of both export duties and export quotas to limit rare earth exports, he is calling for a trade action against China.

"The fact that in 2010 China has exposed export taxes on 329 product categories, including 23 rare earth categories, creates a strong case of violation by China on the export taxes alone," he told the House Subcommittee this week.

An expert on U.S.-China trade law, Stewart suggested, "China's rare earth industry has three serious problems: overcapacity, disorderly competition, and cheap exports on a large scale. It is of great urgency that we protect our rare earth resources and establish our reserve system."

China's Ministry of Industry and Information Technology (MIIT) 2009-2015 Plan "aims to micro-manage the rare earth industry, strengthen the control of strategic resources, and strictly control production capacity by both administrative and market means," Stewart advised the House Subcommittee.

"In the next six years, no rare earth mining permit will be approved, separation of newly formed rare earth smelting companies will be strictly reviewed, and existing rare earth companies will be eliminated [by judging their performance] in three areas of technology and equipment, environmental protection, and management," he explained.

China will promote merger and reorganization of companies, strengthen and enlarge its rare earth industry, form leading REE companies, establish a China Rare Earth OPEC, and "form companies with absolute dominating power in the market so that China can be the leader in controlling the international market place," Stewart warned.

In his testimony Stewart suggested Congress advocate a report for the civilian sector on whether the stockpiling of rare earth materials is appropriate or feasible.

Critical to the domestic future of rare earths is the fate of mining law reform, Stewart advised. "Certainly, the Congress will want to make sure that any legislation balances our needs for access to critical raw materials with other concerns prompting legislative modifications."

Representative Coffman's legislation, H.R. 4866, the Rare Earths Supply-Chain Technology and Resources Transformation Act of 2010 (RESTART Act) would, through a series of assessments and specific programs, attempt to reestablish a competitive domestic rare earth supply chain.

"There is no rare earth element mining taking place in North American and with worldwide demand growing exponentially the situation is only going to get worse," Coffman warned. "It is a critical national security issue with potentially severe consequences."

The RESTART Act would establish a federal REE working group to assess and monitor strategic needs, create a national stockpile, evaluate international trade practices, facilitate loan guarantees for U.S, supply-chain development, and support innovation and workforce development to support the industry.

Coffman's bill would require the Secretaries of Commerce, Defense, Energy, Interior and State to appoint an Executive Agent at the Assistant Secretary level to serve on the interagency REE working group. That body would be required to establish a baseline for REE supply-chain vulnerability. The legislation also requires the Secretary of Defense to establish a national stockpile for rare earth materials.

The U.S. Trade Representative would be required to initiate "a comprehensive review of international trade practices of the rare earth materials market." The review would include dumping, export quotes and other mechanisms used by foreign REE producers to manipulate the rare earth market.

The Secretary of Energy would be required to establish loan guarantees for the rare earth industry under the American Recovery and Reinvestment Act of 2009, Energy Efficiency and Renewable Energy.

The Secretaries of Commerce, Defense, Energy and Interior would also be required to provide basic R&D funding to academia, government labs, corporate research and development, not-for-profit research and development, and industry associations for REE projects."