[Senate Hearing 112-117]
[From the U.S. Government Printing Office]
S. Hrg. 112-117
CRITICAL MINERALS AND
MATERIALS LEGISLATION
=======================================================================
HEARING
before the
SUBCOMMITTEE ON ENERGY
of the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
ON
S. 383
S. 421
S. 1133
__________
JUNE 9, 2011
Printed for the use of the
Committee on Energy and Natural Resources
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70-660 WASHINGTON : 2011
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
JEFF BINGAMAN, New Mexico, Chairman
RON WYDEN, Oregon LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana JAMES E. RISCH, Idaho
MARIA CANTWELL, Washington MIKE LEE, Utah
BERNARD SANDERS, Vermont RAND PAUL, Kentucky
DEBBIE STABENOW, Michigan DANIEL COATS, Indiana
MARK UDALL, Colorado ROB PORTMAN, Ohio
JEANNE SHAHEEN, New Hampshire JOHN HOEVEN, North Dakota
AL FRANKEN, Minnesota DEAN HELLER, Nevada
JOE MANCHIN, III, West Virginia BOB CORKER, Tennessee
CHRISTOPHER A. COONS, Delaware
Robert M. Simon, Staff Director
Sam E. Fowler, Chief Counsel
McKie Campbell, Republican Staff Director
Karen K. Billups, Republican Chief Counsel
------
Subcommittee on Energy
MARIA CANTWELL, Washington, Chairman
RON WYDEN, Oregon JAMES E. RISCH, Idaho
TIM JOHNSON, South Dakota JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana MIKE LEE, Utah
BERNARD SANDERS, Vermont RAND PAUL, Kentucky
MARK UDALL, Colorado DANIEL COATS, Indiana
JEANNE SHAHEEN, New Hampshire ROB PORTMAN, Ohio
AL FRANKEN, Minnesota JOHN HOEVEN, North Dakota
JOE MANCHIN, III, West Virginia BOB CORKER, Tennessee
CHRISTOPHER A. COONS, Delaware
Jeff Bingaman and Lisa Murkowski are Ex Officio Members of the
Subcommittee
C O N T E N T S
----------
STATEMENTS
Page
Burke, Marcilynn, Deputy Director, Bureau of Land Management,
Department of the Interior..................................... 11
Caffarey, Mark, Executive Vice President, Umicore USA, Inc.,
Raleigh, NC.................................................... 40
Cantwell, Hon. Maria, U.S. Senator From Washington............... 1
Duclos, Steven J., Chief Scientist, and Manager, Material
Sustainability, GE Global Research, Niskayuna, NY.............. 35
Erceg, Luka, President and CEO, Simbol Materials, Pleasanton, CA. 31
Hagan, Kay, U.S. Senator From North Carolina..................... 4
Murkowski, Lisa, U.S. Senator From Alaska........................ 3
Price, Jonathan G., State Geologist and Director, Nevada Bureau
of Mines and Geology, Reno, NV................................. 27
Sandalow, David, Assistant Secretary of Energy for Policy and
International Affairs, Department of Energy.................... 8
Udall, Hon. Mark, U.S. Senator From Colorado..................... 6
APPENDIXES
Appendix I
Responses to additional questions................................ 53
Appendix II
Additional material submitted for the record..................... 75
CRITICAL MINERALS AND
MATERIALS LEGISLATION
----------
THURSDAY, JUNE 9, 2011
U.S. Senate,
Subcommittee on Energy,
Committee on Energy and Natural Resources,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:31 p.m. in
room SD-366, Dirksen Senate Office Building, Hon. Maria
Cantwell presiding.
OPENING STATEMENT OF HON. MARIA CANTWELL, U.S. SENATOR FROM
WASHINGTON
Senator Cantwell. [presiding] Good afternoon.
The Energy Subcommittee of the Energy Committee will come
to order. In hearing today is to receive testimony on several
bills relating to critical minerals and materials legislation,
those bills being S. 383, S. 421 and S. 1113. I know my
colleagues are coming back from a floor vote we just had, but
I'm going to go ahead and get started.
We are here this afternoon to discuss the issue of critical
minerals and materials which are essential components of many
of the technologies that are part of our modern economy. Under
the leadership of Chairman Bingaman and Ranking Member
Murkowski, the full Committee has spent considerable time this
Congress discussing and developing legislation to address our
nation's many energy challenges. We have considered legislation
to support the development of conventional and alternative
fuels and technologies, options for low carbon electricity
generation, and efforts to catalyze America's innovation in
private sector investment needed to achieve cleaner and more
diverse energy future.
But we must not lose sight of the fact that our energy
economy also depends on a stable, reliable, materials supply
chain. When it comes to cleaner, alternative energy sources
rare Earth elements and key mineral resources are essential
ingredients in technologies as diverse as solar cells, wind
turbines, energy storage technologies, efficient LED lighting
and SMART grid electronics. Infinia, a company that makes
innovative, high performance, solar power systems in Richland,
Washington, said when we had the last hearing on this topic,
``Access to commercial supply of rare Earth metals is of
critical importance to Infinia and our suppliers and
customers.''
It's not just rare Earth metals. Other critical materials
such as platinum, lithium, palladium are used in a broad array
of essential modern technologies ranging from batteries to
electronics to pollution control technologies. Just looking
around the room I see dozens of ways these critical materials
are being used already.
However, as last year's subcommittee hearing established
while America was once sufficient in supplying the materials
and finished product used in high tech manufacturing today. We
now are more reliant on imports from other nations. As
Assistant Secretary Sandalow points out in his testimony, in
the next 5 years we could face supply disruptions in the
materials needed to produce clean energy technologies.
To my mind the situation we find ourselves in when it comes
to critical materials has many similarities and parallels to
the situation we face in transitioning to a cleaner, more
diverse, energy source in general. Not too long ago, the United
States was the world's largest producer of rare earth elements.
Not too long ago, we were inventing and manufacturing the
world's wind turbines and solar panels.
But somewhere along the way, that changed. 97 percent of
the world's rare Earth elements are now produced in China,
which also has some of the world's largest endowments of rare
Earth and critical minerals. At the same time China's renewable
energy investment is up 39 percent. China is now the world's
largest manufacturer of wind turbines and solar modules.
China has now overtaken the United States in terms of
installed, renewable, electricity capacity. There are reports
that provide evidence that China is using its strategic
endowments to constrain global supply of selected rare Earth
elements and critical materials. They are using these resources
to monopolize the manufacturing of advanced and efficient clean
energy technologies. The Associated Press reported on Wednesday
that China is consolidating its rare Earth production industry
such that a single company will have a monopoly on rare Earth
production in China's main rare Earth producing region.
The reality is that we can no longer afford to ignore this
problem or to continue to drift without a national energy
strategy, we must have predictable policies in this area. In
many ways the challenges and solutions to critical materials in
energy production shortages are the same. We need to establish
a national plan and priorities, to invest in R and D, to
provide the private sector with certainty and predictability
and to figure out ways to make sure that those efforts are
being undertaken.
Most of all we need to make sure our efforts are leveraging
America's innovative spirit of free market entrepreneurship so
that we can make sure that we catch up again. We cannot risk
having enormous exposure to supply chain shortages of strategic
commodities. To that end I commend and thank my colleagues who
have put 3 bills out for consideration today, Senator Hagan,
Senator Udall and Senator Murkowski.
So I will defer to them now to explain those bills. My hope
is that given the broad range of co-sponsorship and stakeholder
support for these measures and with on the help of our expert
witnesses today, we will be able to come up with bipartisan
legislation to address this important national problem.
When my colleagues arrive, if they wish to make any opening
statements we will allow them to do so. The ranking member,
Senator Risch, I believe is on his way. The full committee
ranking member, Senator Murkowski. We've been joined by Senator
Bingaman, the full committee chair.
Senator Bingaman, would you like to make any statement
today?
OK, if not, then I'm going to proceed to Senator Hagan and
allow her to make a statement about her bill--Senator
Murkowski, would you like to make any statement? We're now
allowing the subcommittee and full committeechairs to make
opening statements.
STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR
FROM ALASKA
Senator Murkowski. I appreciate that, Madame Chair. I
apologize that I am late. I apologized to my Chairman. I was
late for the hearing this morning and just my day.
Thank you to those who have joined us and----
Senator Cantwell. I--just to give you a second. I have made
a statement and then when you're finished or if Senator Risch
arrives in time we'll allow him to make a statement and then
we'll go to our witnesses, Senator Hagan, who also has
introduced legislation today. Then we'll go to our full panel
of witnesses.
Senator Murkowski. Thank you, Madame Chairman. I appreciate
the opportunity to speak on the legislation that we have in
front of us. One of which I am introducing relating to critical
minerals in the supply chain.
We've got a real problem on our hands. Minerals are the
building blocks of our nation's economy. From rare Earth
elements to Mendelevium, we rely on our minerals for the
smallest computer chips to the tallest skyscrapers.
Minerals make it possible for us to innovate and invent and
in the process they shape our daily lives, our standard of
living and our ability to prosper. There's no question that a
stable and affordable supply of minerals is critical to
America's future competitiveness. Yet despite all that, our
mineral related capabilities have been slipping for decades.
Rare Earth elements garner most of the headlines, but the U.S.
remains 100 percent dependent on foreign suppliers for 17 other
minerals and more than 50 percent dependent on foreign sources
for some 25 more.
To revitalize the domestic, critical mineral supply chain,
I've introduced one of the measures that we have before us
today. It's the Critical Minerals Policy Act. I've got 17 co-
sponsors including 8 of my Democratic and 9 of my Republican
colleagues. I thank them all for that support.
The bill provides clear programmatic direction to keep the
U.S. competitive. Will ensure that the Federal Government's
mineral policies, some of which have not been updated since the
1980s are brought here into the 21st century here. The
legislation requires that USGS generate a list of minerals
critical to the U.S. economy, outlines a comprehensive set of
policies that will bolster the production of these critical
minerals, expands manufacturing and promotes recycling and
alternatives all while maintaining strong, environmental
standards.
What sets this bill apart is not only a more comprehensive
look at the various minerals, but also its attention to the
broader supply chain including the permitting process for
domestic critical mineral production. The U.S. ranks dead last
in the world in terms of the amount of time it takes to get to
a yes or no answer to permit applicants. It's our
responsibility here in this Energy Committee to understand why
this is the case. If there's any real purpose for these delays.
If not, what we can do about them.
The U.S. has some of the strongest standards in the world
for environmental protection. Mining operations are subject to
no less than 30 Federal, State and local regulatory programs.
As a country we should be proud and maintain the commitment
that we've displayed over generations to being good stewards of
our natural environment.
We set standards as a result of these laws, standards for
air emissions, waste storage, ground water supplies. I believe
that if operators are capable with complying with these
standards they should be allowed to produce the minerals. If
they're not, then I don't want them doing business here in the
United States.
What we should not do, however, and particularly in the
case of minerals critical to our global competitiveness and our
national security is purposely or unwittingly subject these
projects to an unnecessarily long permitting process. Delaying
projects, standing capital and allowing bureaucratic
intransigence is not a strategy for environmental protection.
To the contrary it is disingenuous--thank you, disingenuous,
and a dangerous thing for us to do as the U.S. struggles to
create private sector jobs and attract long term investments.
There's no question we know that mining has an
environmental impact. It's a process that involves digging
holes in the ground. It's just as simple as that. But we have
to acknowledge that national interests served by reducing our
reliance on foreign, critical mineral supplies and understand
that these projects can be pursued in a more modern and a more
responsible way here at home than abroad.
I've gone to great lengths to take measured inquiry based
steps to address the permitting process in my bill. I think
it's reflected in the broad, bipartisan support that it's
attracted. I do hope, Madame Chairman, that we will be able to
continue to improve, not only on the proposals that we have
before us, but working together to ensure that the significance
of our critical mineral supply chain is recognized and helped
to advance.
So I appreciate, again, your support and having the hearing
today.
Senator Cantwell. Thank you, Senator Murkowski. We're now
going to turn to Senator Hagan, who has joined us. Thank you
for being here today to talk about S. 421, your legislation,
Powering America's Lithium Production Act.
Senator Hagan.
STATEMENT OF HON. KAY R. HAGAN, U.S. SENATOR
FROM NORTH CAROLINA
Senator Hagan. Thank you, madame chairman and your Ranking
Member Risch, I really do appreciate you inviting me here today
to join this Subcommittee to discuss the need to secure a
stable supply of rare Earth and other critical materials. I'll
certainly want to thank Chairman Bingaman and Ranking Member
Murkowski also. As members of the subcommittee well know the
topic of today's hearing is vitally important to our Nation's
ability to out innovate and out compete our global competitors.
Chairman Cantwell, you mentioned this and Senator
Murkowski, how important this is. Critical materials are the
building blocks of next generation manufacturing and are
essential components of everything from windmills to IPods to
solar panels to the navigation system of an Abrams tank. As the
Chair of the Senate Armed Services Emerging Threats
Subcommittee, I can tell you that many of these materials are
essential to our national security and our ability to equip our
men and women on the battlefield.
That's why I am encouraged that this Subcommittee is
working together in a bipartisan way to put in place a strategy
that will help ensure reliable and affordable access to
critical minerals well into our future. In particular I want to
thank the chairman and the ranking member for bringing this to
the Subcommittee today this legislation that I introduced in
late February, the Powering of America's Lithium Production
Act. Lithium is the material of choice for rechargeable
batteries, also known as lithium-ion batteries. It's a crucial
component of clean energy products such as electric vehicles
and our SMART grid of the future.
As demand for electric vehicles continues to grow it is
conservatively estimated that global lithium demand will grow
by 20 percent annually through the end of this decade. Through
the Recovery Act, Congress recognized the growing demand for
lithium-ion batteries by making an unprecedented investment in
our ability to manufacture advanced batteries here in the
United States. Recovery Act investments included billions of
dollars in loans and grants to support more than 30 electric
vehicle battery and component manufacturing plants. Without a
doubt these investments will enhance our energy security and
will allow U.S. battery manufacturers to supply our growing
electric vehicle market.
But while we've made significant progress in assembling the
infrastructure needed to manufacture these critical lithium-ion
batteries domestically, we have yet to make similar investments
in the production of the materials found inside these
batteries. Currently the battery grade lithium used to power
the next generation of lithium batteries is supplied almost
exclusively from foreign sources. Even though 2 of the 3 global
manufacturers capable of producing battery grade lithium are
headquartered in the United States, most of their current
production actually occurs overseas close to the major battery
manufacturers in Asia.
So instead of simply encouraging these manufacturers to
replicate their overseas facilities here at home, we really
should be encouraging them to improve on these technologies to
give our domestic battery manufacturers a competitive edge. The
Powering America's Lithium Production Act would do just that.
It will enable these manufacturers to keep pace with escalating
demand and will encourage them to invest innovation here at
home in the United States.
To do so, it provides grants to support the developments
and commercialization of technologies that will enhance
domestic lithium production for use in advanced batteries. When
you combine that with our expanded domestic battery capacity,
breakthroughs in lithium production will help put the U.S. at
the forefront of electric vehicle innovation and manufacturing.
As today's sky high gas prices teach us, dependence on foreign
energy sources leaves our Nation less safe and less competitive
in the global economy. We must not repeat this pattern with our
critical mineral supply.
The strength of the American economy depends on investment
in clean energy technologies such as lithium-ion batteries that
will bolster our national security, reduce our dependence on
foreign oil, protect our environment and to me, most
importantly, it will create jobs. The Powering America's
Lithium Production Act is an important part of this broader
effort. I encourage this Subcommittee to consider this bill
carefully.
Madame Chairman, I thank you for the opportunity to be with
you here today and Ranking Member Risch. I look forward to
continuing to work with the Subcommittee to address this
important issue. Thank you.
Senator Cantwell. Thank you, Senator Hagan. Does anybody
have any questions for our colleague before we let her go?
If not, thank you, Senator Hagan, for introducing this
legislation and for your interest in such a critical issue.
Senator Risch, would you like to make an opening statement
before----
Senator Risch. No, I'll pass. Thank you.
Senator Cantwell. Thank you.
Let's call up the second panel then.
Dr. David Sandalow, Assistant Secretary for Policy and
International Affairs from the U.S. Department of Energy.
Ms. Marcilynn Burke, Deputy Director of the Bureau of Land
Management for the U.S. Department of Interior.
Welcome to both of you. Mr. Sandalow, thank you for being
here the second time to talk about this issue and to brief the
Committee on the Department of Energy's efforts in this area.
So we'll give you a few minutes to get situated. I know you're
also going to be accompanied by Mr. Jeff Doebrich, who is the
Program Coordinator and Acting Mineral Resource--for Mineral
Resources from the U.S. Geological Survey. So welcome, to you
as well.
My understanding is you're not going to give testimony but
are here to answer any questions that committee members may
have. Is that correct? Yes.
Thank you.
Before we do the second panel, I should have recognized
Senator Udall, who has also introduced legislation. So Senator
Udall, would you like to take a few minutes to talk about S.
383?
STATEMENT OF HON. MARK UDALL, U.S. SENATOR
FROM COLORADO
Senator Udall. I would, Madame Chair. Thank you for
recognizing me. I apologize in advance for circulating between
this Committee and the Intelligence Committee which I serve on
and is holding a hearing now as well.
It's a nice confluence. It's a challenging confluence.
Because of what we know about our capabilities on the
Intelligence Committee and what rare Earth materials and
minerals offer to us in the long run.
So I want to thank you and Ranking Member Risch for holding
the hearing. I want to acknowledge the work of the Committee
Ranking Member Murkowski, who in many ways is walking in the
same steps that I did early this year in introducing
legislation on critical material supplies. I came to see that
she picked up and included many of the provisions from my bill
in her bill. I think it's positive that we agree on many of the
steps that we need to take moving forward.
We've already heard from Senator Hagan. We will hear from
the witnesses about how important critical material supplies
are for our national security and our economic well being. I
should also mention that I became aware of this during my
service as well in the Armed Services Committee in the Senate.
We used to dominate, the United States did, the world's
supply chain, not just because we had the mines, but because we
developed the know how as to how to process the minerals and
put them into advanced technology. We sold that technology,
however. The intellectual property rights went to countries
like China and Japan and now we no longer have the
manufacturing capabilities nor a skilled work force at the
level that we need to have it or want in this country.
So even if we were to open and I know we will, more rare
Earth mines in the United States, we currently then have to
ship the products of those mines to China to be processed into
useful materials. That's, in part, my motivation for having
introduced my bill at the beginning of the year to bring back
our capacity to process the raw materials here in the U.S. Then
to ensure that we can produce products along the entire supply
chain.
So I want to thank the chairman's staff, who is here as
well, for working closely with me. Now that we have at least 2
separate bills, I think we have some work to do to make sure
our policies are aligned. I do have some concerns about some of
the sections in the Ranking Member's bill, mainly the mining
permitting piece and some of the mineral specific provisions.
But the Energy Committee is known for its focus on working
through differences between individual members. I know that
Senator Murkowski and I can do that. I know the hearing will
give us an opportunity to highlight the differences and the
similarities and to move forward ultimately in the committee
with a unified voice in ways in which we can better compete as
a country and win the global economic race. We so much depend
on these important natural resources to be able to do so.
So, Madame Chair, I thank you for the opportunity to
comment. I look forward to working with my friend from Alaska.
Senator Cantwell. Thank you. Thank you, Senator Udall for
introducing S. 383 and for your comments today. We'll look
forward to working with you on that legislation as several
pieces have been introduced. The Committee, obviously, has
great interest in this.
So now we're going to turn to our panel. I've already
introduced them. So I'm going to let them just make their
statements. But welcome to this Committee and thank you for
your input.
So, Mr. Sandalow, welcome.
STATEMENT OF DAVID SANDALOW, ASSISTANT SECRETARY OF ENERGY FOR
POLICY AND INTERNATIONAL AFFAIRS, DEPARTMENT OF ENERGY
Mr. Sandalow. Thank you, Madame Chairwoman, Ranking Member
Risch, members of the subcommittee. It's good to be before you
again. Thank you for the opportunity to testify today on
critical minerals and materials.
Earlier this year I visited the Mountain Pass Mine in
Southern California. I was impressed by the facility and its
potential to provide a domestic source of rare earth metals.
According to the owners the mine will produce at an annual rate
of about 19,000 tons of rare earth by the end of next year and
40,000 tons by early 2014 using modern technologies at a
globally competitive cost.
That's an important step in the right direction. The issue
of critical minerals is important and needs priority attention
in the months and years ahead. The Department of Energy shares
the goal of establishing a stable, sustainable and domestic
supply of critical minerals. We look forward to discussions
with the Congress on ways to address this issue as we move
forward.
Madame Chair, the world is on the cusp of a clean energy
revolution. Here in the U.S. we're making historic investments
in clean energy. The American Recovery Act was the largest,
one-time investment in clean energy in our Nation's history,
more than $90 billion.
At DOE we're investing $35 billion of Recovery Act funds in
electric vehicles, battery and advanced energy storage, a
smarter and more reliable electric grid, wind and solar
technologies among many other areas.
Other countries, importantly, are also seizing this
opportunity. The market for clean energy technologies is
growing rapidly around the world. For example, the Chinese
government is launching programs to deploy electric cars in
over 25 major cities while building huge wind farms, ultra
super critical advanced coal plants and ultra high voltage,
long distance transmission lines. India has launched an
ambitious national solar mission. In Europe strong public
policies are driving sustained investments in clean energy.
In recognition of the importance of certain materials in
the transition to clean energy, the Department of Energy is
working to address the use of critical materials in clean
energy components, products and processes. As a first step, DOE
released its critical materials strategy last December. The
report found that 4 clean energy technologies: wind turbines,
electric vehicles, photovoltaic cells and fluorescent lighting
use materials at risk of supply disruptions in the next 5
years.
In the report 5 rare earth elements: Dysprosium, neodymium,
terbium, europium, yttrium along with indium were assessed as
most critical in the short term. For this purpose criticality
was defined as a measure that combined the importance to the
clean energy economy and the risk of supply disruptions. The
critical materials strategy highlighted 3 pillars to address
the challenges associated with critical materials.
First, substitutes must be developed.
Second, recycling, reuse and more efficient use can
significantly lower global demand for newly extracted
materials.
Finally, diversified global supply chains are essential.
Within global supply chains domestic supply is the most
important. That means encouraging Nations to expedite
alternative supplies and exploring potential sources of
materials such as existing mine tailings and coal ash in
addition to facilitating environmentally sound extraction and
processing here in the United States.
This year DOE will update its analysis in light of rapidly
changing market conditions. DOE is analyzing the use of
critical materials in petroleum refineries and other
applications not addressed in last year's report. In addition
DOE may identify specific strategies from materials identified
as critical including strategies with respect to substitution,
recycling and more efficient use.
In support of this year's analysis we issued a request for
information that focused on critical material content of
certain technologies and other topics. That RFI, as we call it,
closed last month. We received nearly 500 pages of responses
from 30 organizations including manufacturers, miners,
universities and national labs. Many organizations shared
proprietary data and material usage that will help us develop a
clearer picture of current and future market conditions. We are
in the process of analyzing that data as we speak.
Madame chair, the administration is currently reviewing the
bills before you today, S. 383, S. 421 and S. 1113. DOE has no
comments on the specific content of those 3 bills at this time.
We share the goal of establishing a secure supply of critical
minerals and very much look forward to discussions with the
Congress on ways to address any issues as we move forward.
One last thing we've learned through experience is that
supply constraints aren't static. As a society we've dealt with
these types of issues before. Working together, being smart and
serious, we can do so again.
Thank you.
[The prepared statement of Mr. Sandalow follows:]
Prepared Statement of David Sandalow, Assistant Secretary of Energy for
Policy and International Affairs, Department of Energy
Chairwoman Cantwell, Ranking Member Risch, and Members of the
Subcommittee, thank you for the opportunity to testify today and
discuss three bills under consideration by this committee: S. 383, S.
421, and S. 1113. I would also like to speak about the critical
minerals that underpin the transition to a clean energy economy and the
Department of Energy's ongoing work on this topic.
Additionally, significant industry efforts are underway on this
topic. Earlier this year I visited the Mountain Pass Mine in southern
California. I was impressed by the facility and its potential to
provide a domestic source of rare earth metals. According to the
owners, the mine will produce at an annual rate of about 19,000 tons of
rare earths by end of 2012 and 40,000 tons by early 2014, using modern
technologies at a globally competitive cost. That's an important step
in the right direction.
The issue of critical minerals is important and needs priority
attention in the months and years ahead. The Department shares the goal
of establishing a stable, sustainable and domestic supply of critical
minerals, and we look forward to discussions with the Congress on ways
to address this issue as we move forward.
GLOBAL CLEAN ENERGY ECONOMY
The world is on the cusp of a clean energy revolution. Here in the
United States, we are making historic investments in clean energy. The
American Recovery and Reinvestment Act was the largest one-time
investment in clean energy in our nation's history--more than $90
billion. At the Department of Energy (DOE), we're investing $35 billion
in Recovery funds in electric vehicles; batteries and advanced energy
storage; a smarter and more reliable electric grid; and wind and solar
technologies, among many other areas. We aim to double our renewable
energy generation and manufacturing capacities by 2012. We are working
to deploy hundreds of thousands of electric vehicles and charging
infrastructure to power them, weatherize at least half a million homes,
and help modernize our grid.
Other countries are also seizing this opportunity, and the market
for clean energy technologies is growing rapidly all over the world.
For example, the Chinese government is launching programs to deploy
electric cars in over 25 major cities. They are connecting urban
centers with highspeed rail and building huge wind farms,
ultrasupercritical advanced coal plants and ultra-highvoltage long-
distance transmission lines. India has launched an ambitious National
Solar Mission, with the goal of reaching 20 gigawatts of installed
solar capacity by 2020.
In Europe, strong public policies are driving sustained investments
in clean energy. Denmark earns more than $4 billion each year in the
wind turbine industry. Germany and Spain are the world's top installers
of solar photovoltaic panels, accounting for nearly three-quarters of a
global market worth $37 billion in 2009. Around the world, investments
in clean energy technologies are growing, helping create jobs, promote
economic growth and fight climate change. These technologies will be a
key part of the transition to a clean energy future and a pillar of
global economic growth.
DOE STRATEGY
In recognition of the importance of certain materials in the
transition to clean energy, DOE has begun to address the use of
critical materials in clean energy components, products and processes.
As a first step, DOE released its Critical Materials Strategy last
December. The report found that four clean energy technologies-wind
turbines, electric vehicles, photovoltaic cells and fluorescent
lighting-use materials at risk of supply disruptions in the next five
years. In the report, five rare earth elements (dysprosium, neodymium,
terbium, europium and yttrium), as well as indium, were assessed as
most critical in the short term. For this purpose, ``criticality'' was
a measure that combined importance to the clean energy economy and the
risk of supply disruption.
The Critical Materials Strategy highlighted three pillars to
address the challenges associated with critical materials in the clean
energy economy. First, substitutes must be developed. Research and
entrepreneurial activity leading to material and technology substitutes
improves flexibility to meet the material demands of the clean energy
economy. Second, recycling, reuse and more efficient use can
significantly lower global demand for newly extracted materials.
Research into recycling processes coupled with well-designed policies
will help make recycling economically viable over time. Finally,
diversified global supply chains are essential. To manage supply risk,
multiple sources of material are required. This means encouraging other
nations to expedite alternative supplies and exploring other potential
sources of material (such as existing mine tailings or coal ash) in
addition to facilitating environmentally sound extraction and
processing here in the United States. With all three of these
approaches, we must consider all stages of the supply chain: from
environmentally-sound material extraction to purification and
processing, the manufacture of chemicals and components, and ultimately
end uses.
This year, DOE will update its analysis in light of rapidly-
changing market conditions. DOE is analyzing the use of critical
materials in petroleum refineries and other applications not addressed
in last year's report. In addition, DOE may identify specific
strategies for materials identified as critical, including strategies
with respect to substitution, recycling and more efficient use. In
support of this year's analysis, DOE issued a Request for Information
that focused on critical material content of certain technologies,
supply chains, research, education and workforce training, emerging
technologies, recycling opportunities, and mine permitting. The RFI
closed last month. We received nearly 500 pages of responses from 30
organizations, including manufacturers, miners, universities, and
national laboratories. Many organizations shared proprietary data on
material usage that will help us develop a clearer picture of current
and future market conditions.
Within this larger context, we do intend to address domestic
production of critical materials in our 2011 report. Production within
the United States is important for at least three reasons. First,
domestic production is the most secure. Second, the United States'
considerable reserves of some critical materials could add
significantly to total global production and to greater diversity in
the global supply of these materials. Third, U.S. technology and best
practices developed during mine operations can help promote safe and
responsible mining in other countries, further contributing to supply
diversity and the sustainable development of resources. With regard to
mining in the United States, it is important to point out that permits
are not the only requirements that can extend the time required to open
a mine. The required accumulation of hundreds of millions of dollars of
capital for mine development can also lead to delay.
Managing supply chain risks is by no means simple. At DOE, we focus
on the research and development angle. From our perspective, we must
think broadly about addressing the supply chain in our research and
development (R&D) investments, from extraction of materials through
product manufacture and eventual recycling. It is also important to
think about multiple technology options, rather than picking winners
and losers. We work with other Federal agencies to address other
issues, such as trade, labor and workforce, and environmental impacts.
We are already closely working with our interagency partners to address
these important issues.
S. 383, S. 421, and S. 1113
The Administration is currently reviewing S. 383, S. 421, and S.
1113, and the DOE has no comments on the specific content of these
three bills at this time. We share the goal of establishing a secure
supply of critical minerals, and we look forward to discussions with
the Congress on ways to address any issues as we move forward.
CONCLUSION
One lesson we have learned through experience is that supply
constraints aren't static. As a society, we have dealt with these types
of issues before, mainly through smart policy and R&D investments that
reinforced efficient market mechanisms. We can and will do so again.
Strategies for addressing shortages of strategic resources are
available, if we act wisely. Not every one of these strategies will
work every time. But taken together, they offer a set of approaches we
should consider, as appropriate, whenever potential shortages of
natural resources loom on the horizon.
So in conclusion, there's no reason to panic, but every reason to
be smart and serious as we plan for growing global demand for products
that contain critical minerals. The United States intends to be a world
leader in clean energy technologies. Toward that end, we are shaping
the policies and approaches to help prevent disruptions in supply of
the materials needed for those technologies. This will involve careful
and collaborative policy development. We will rely on the creative
genius and entrepreneurial ingenuity of the business community to meet
an emerging market demand in a competitive fashion. With focused
attention, working together we can meet these challenges.
Senator Cantwell. Thank you, Mr. Sandalow. We'll look
forward to asking you questions.
Ms. Burke, thank you for being here.
STATEMENT OF MARCILYNN BURKE, DEPUTY DIRECTOR, BUREAU OF LAND
MANAGEMENT, DEPARTMENT OF THE INTERIOR ACCOMPANIED BY JEFF
DOEBRICH, PROGRAM COORDINATOR, ACTING MINERAL RESOURCES
PROGRAM, U.S.GEOLOGICAL SURVEY
Ms. Burke. Good afternoon. Thank you for this opportunity
to discuss S. 383, the Critical Minerals and Materials
Promotion Act and S. 1113, the Critical Minerals Policy Act.
These bills direct the Secretary's of Energy and the Interior
to perform a number of activities intended to support and
promote the production of domestic critical minerals and to
enhance the Nation's critical minerals supply chain.
In this statement I will address the provisions relevant to
the Department of the Interior. As Madame Chair has
acknowledged, with me today is Jeff Doebrich and he's the
Acting Minerals Program Coordinator at the U.S. Geological
Survey. He will answer questions about the USGS's role.
The Department of the Interior supports the goal of
facilitating the development of critical minerals on Federal
lands in an environmentally responsible manner. Global demand
for critical mineral commodities is on the rise with increasing
applications in consumer products, computers, automobiles,
aircraft and other advanced technology products. Much of this
growth in demand is driven by new technologies that increase
energy efficiency and decrease reliance on fossil fuels. To
begin the process of understanding the potential sources of
critical minerals the USGS has recently completed an inventory
of known domestic, rare Earth reserves and resources.
S. 383 directs the Secretary of the Interior acting through
USGS to establish a research and development program for
undiscovered and discovered resources of critical minerals and
materials in the United States and abroad. These actions are
already underway at the USGS. The USGS continuously collects,
analyzes and disseminates data and information on domestic and
global rare Earth and other critical mineral reserves and
resources as well as production, consumption and use.
S. 1113, the Critical Minerals Policy Act of 2011 directs
the Secretary of Interior through the USGS to perform a number
of actions that build upon the current capabilities including
this recent rare Earth inventory. The bill directs the USGS to
develop a rigorous methodology for determining which minerals
are critical and then to designate them as such. It also calls
for a comprehensive, national resource assessment within 4
years of the bills enactment of each mineral designated as
critical under section 101 of the bill.
Section 104 calls for the establishment of a high level
working group whose members would come from 9 departments and
agencies as well as a designee from the Office of the
President. The working group would review, assess and evaluate
the permitting process for exploration and development of
domestic critical minerals while maintaining our environmental
standards. Section 104 requires the working group to submit a
report of its findings to the President and Congress. The
Department would like to work with the Committee to clarify and
focus the duties of this working group. The Department is also
concerned that the bill provides insufficient time to carry out
both the duties of the working group and to report to Congress.
Section 105 addresses new, critical mineral manufacturing
facilities and seeks to facilitate the permitting processes for
them for all Federal agencies as well as improve coordination
and consideration of permit applications that are under State
review. In this permitting process the BLM sometimes reviews
and analyzes one category of critical mineral manufacturing as
defined in the bill if it is to occur on BLM lands. Often
times, however, these and other manufacturing operations are
located on non-Federal lands. We are concerned about other
portions of section 105 and those are discussed further in our
written statement.
The USGS stands ready to fulfill its role as the Federal
provider of unbiased research, unknown mineral resources,
assessment of undiscovered mineral resources and information on
domestic and global mineral resources for use in global
critical mineral supply chain analyses. Similarly the BLM
welcomes the opportunity to work with the Committee toward the
goal of improving the coordination and efficiency of the mining
permitting process while maintaining our environmental
standards.
Thank you again for this opportunity to present our views
on these bills. We'd be happy to answer any questions.
[The prepared statement of Ms. Burke follows:]
Statement of Marcilynn Burke, Deputy Director, Bureau of Land
Management, Department of the Interior
on S. 383
Good afternoon, Madam Chairwoman and Members of the Subcommittee.
Thank you for the opportunity to discuss S. 383, the Critical Minerals
and Materials Promotion Act of 2011. The bill directs the Secretaries
of Energy and of the Interior to perform a number of activities
intended to promote the domestic production of critical minerals and
materials. In this statement, we will address the provisions relevant
to the Department of the Interior. The Department of the Interior
supports the goals of this bill, although we note that the Departmental
activities called for in S. 383 are within the scope of existing
Department of the Interior authorities.
The U.S. Geological Survey (USGS) is responsible for conducting
research and collecting data on a wide variety of nonfuel mineral
resources. Research is conducted to understand the geologic processes
that concentrated known mineral resources at specific localities in the
Earth's crust and to estimate (or assess) quantities, qualities, and
areas of undiscovered mineral resources, or potential future supply.
USGS scientists also conduct research on the interactions of mineral
resources with the environment, both natural and as a result of
resource extraction, to better predict the degree of impact that
resource development may have on human and ecosystem health. USGS
mineral commodity specialists collect, analyze, and disseminate data
and information that document current production and consumption for
about 100 mineral commodities, both domestically and internationally
for 180 countries. This full spectrum of mineral resource science
allows for a comprehensive understanding of the complete life cycle of
mineral resources and materials--resource formation, discovery,
production, consumption, use, recycling, and reuse--and allows for an
understanding of environmental issues of concern throughout the life
cycle.
Global demand for critical mineral commodities is on the rise with
increasing applications in consumer products, computers, automobiles,
aircraft, and other advanced technology products. Much of this demand
growth is driven by new technologies that increase energy efficiency
and decrease reliance on fossil fuels. To begin the process of
understanding potential sources of critical mineral commodities, the
USGS has recently completed an inventory of known domestic rare-earth
reserves and resources (Long and others, 2010). This study restates
basic geologic facts about rare earths relevant to assessing domestic
security of supply and reviews current U.S. consumption and imports of
rare earths, current knowledge of domestic resources, and possibilities
for future domestic production. The report also includes an overview of
known global rare-earth resources and discusses the reliability of
alternative foreign sources of rare earths.
Though rare earth elements are currently of most concern to many,
including the Department of Defense, which funded the inventory, it
should be noted that in 2010 the United States was 100 percent
dependent on foreign suppliers for 18 mineral commodities and more than
50 percent dependent on foreign sources for 43 mineral commodities.
Import partners include Brazil, Canada, China, France, Germany, Japan,
Mexico, Russia, and Venezuela. In 2008, a National Research Council
committee, funded largely by the USGS, developed a ``criticality
matrix'' that combines supply risk with importance of use as a first
step toward determining which mineral commodities are essential to the
Nation's economic and national security (National Research Council,
2008).
S. 383
S. 383 directs the Secretary of the Interior, acting through the
USGS, to establish a research and development program to (1) provide
data and scientific analyses for research on, and assessments of the
potential for, undiscovered and discovered resources of critical
minerals and materials in the United States and other countries; (2)
analyze and assess current and future critical minerals and materials
supply chains; and (3) if appropriate, cooperate with international
partners to ensure that the research and assessment programs provide
analyses of the global supply chain of critical minerals and materials.
These actions are within the scope of existing authorities, and
already underway at the USGS. The USGS continuously collects, analyzes,
and disseminates data and information on domestic and global rare-earth
and other critical mineral reserves and resources, production,
consumption, and use. This information is published annually in the
USGS Mineral Commodity Summaries (USGS, 2011) and includes a
description of current events, trends, and issues related to supply and
demand.
The USGS stands ready to fulfill its role as the federal provider
of unbiased research on known mineral resources, assessment of
undiscovered mineral resources, and information on domestic and global
production and consumption of mineral resources for use in global
critical-mineral supply chain analysis. Any study conducted to fulfill
the objectives of the bill would require substantial resources and
would need to compete for funding with other Administration priorities.
Thank you for the opportunity to present the views of the
Department on S. 383. We are happy to answer any questions you or the
other Members may have.
______
On S. 1113
Good afternoon and thank you for the opportunity to discuss S.
1113, the Critical Minerals Policy Act of 2011. The bill directs the
Secretaries of Energy and of the Interior to perform a large number of
activities intended to support and enhance the Nation's critical
mineral supply chain, beginning with developing a methodology to
determine which minerals are critical to the Nation's economy. In this
statement, we will address the provisions relevant to the Department of
the Interior.
The Department of the Interior supports the goal of facilitating
the development of critical minerals in an environmentally responsible
manner. We note that many of the activities called for in S. 1113 are
within the scope of existing Department of the Interior authorities. We
would like to work with the Committee toward the goal of improving the
coordination and efficiency of the mining permitting process while
maintaining environmental standards.
Background
The U.S. Geological Survey (USGS) is responsible for conducting
research and collecting data on a wide variety of nonfuel mineral
resources. Research is conducted to understand the geologic processes
that concentrated known mineral resources at specific localities in the
Earth's crust and to estimate (or assess) quantities, qualities, and
areas of undiscovered mineral resources, or potential future supply.
USGS scientists also conduct research on the interactions of mineral
resources with the environment, both natural and as a result of
resource extraction, to better predict the degree of impact that
resource development may have on human and ecosystem health. USGS
mineral commodity specialists collect, analyze, and disseminate data
and information that document current production and consumption for
about 100 mineral commodities, both domestically and internationally
for 180 countries. This full spectrum of mineral resource science
allows for a comprehensive understanding of the complete life cycle of
mineral resources and materials-resource formation, discovery,
production, consumption, use, recycling, and reuse-and allows for an
understanding of environmental issues of concern throughout the life
cycle.
Global demand for critical mineral commodities is on the rise with
increasing applications in consumer products, computers, automobiles,
aircraft, and other advanced technology products. Much of this demand
growth is driven by new technologies that increase energy efficiency
and decrease reliance on fossil fuels. To begin the process of
understanding potential sources of critical mineral commodities, the
USGS has recently completed an inventory of known domestic rare-earth
reserves and resources (Long and others, 2010). This study restates
basic geologic facts about rare earths relevant to assessing domestic
security of supply and reviews current U.S. consumption and imports of
rare earths, current knowledge of domestic resources, and possibilities
for future domestic production. The report also includes an overview of
known global rare-earth resources and discusses the reliability of
alternative foreign sources of rare earths.
Though rare earth elements are currently of most concern to many,
including the Department of Defense, which funded the inventory, it
should be noted that in 2010 the United States was 100 percent
dependent on foreign suppliers for 18 mineral commodities and more than
50 percent dependent on foreign sources for 43 mineral commodities.
Import partners include Brazil, Canada, China, France, Germany, Japan,
Mexico, Russia, and Venezuela. In 2008, a National Research Council
committee, funded largely by the USGS, developed a ``criticality
matrix'' that combines supply risk with importance of use as a first
step toward determining which mineral commodities are essential to the
Nation's economic and national security (National Research Council,
2008).
S. 1113
S. 1113, the Critical Minerals Policy Act of 2011, directs the
Secretary of the Interior, through the Director of the USGS, to perform
a number of actions that build on current USGS activities and
capabilities, including the recent rare-earths inventory. The bill
directs the USGS to develop a rigorous methodology for determining
which minerals are critical, and then to use that methodology to
designate critical minerals. It calls for a comprehensive national
mineral resource assessment within four years of the bill's enactment
for each mineral designated as critical under Sec. 101, and it
authorizes field work for the assessment, as well as technical and
financial assistance for States and Indian tribes. The bill establishes
a collaborative effort between USGS and the U.S. Energy Information
Administration for annual reviews of domestic mineral trends as well as
forward-looking analyses of critical mineral production, consumption,
and recycling patterns. The bill repeals the National Critical Minerals
Act of 1984 and parts of the National Materials and Minerals Policy,
Research, and Development Act of 1980 but retains Sections 1604(e) and
(f) of the 1980 Act, which authorize the mineral information tracking
and analysis activities of the USGS.
Sec. 104 calls for the establishment of a high-level Working Group
whose members would be the Secretaries (or designees) of the Interior,
Energy, Agriculture, Defense, Commerce, and State, the U.S. Trade
Representative, the Administrator of the U.S. Environmental Protection
Agency, and the Chief of Engineers of the Army Corps of Engineers, as
well as a designee from the Executive Office of the President. The
Working Group would review, assess, and evaluate the permitting process
for exploration and development of domestic, critical minerals, while
maintaining environmental standards. Sec. 104 requires the Working
Group to submit a report to the President and Congress on the Working
Group's findings. The Department would like to work with the Committee
to clarify and focus the duties of this Working Group. We are also
concerned that the bill provides insufficient time to both carry out
the duties of the Working Group and to report back to Congress.
Section 104 also calls for the development of a performance metric.
The Department of the Interior issued its FY 2011-2016 Strategic Plan
in January 2011. As part of developing this plan, the Department
developed performance metrics. Throughout the process, and in
accordance with the Government Performance and Results Act (GPRA), the
Department sought public input into the plan, goals, and performance
measures selected. Within the Department's Strategic Plan framework,
the BLM already measures and reports in its Budget Justifications
information regarding non-energy mineral (which include critical
minerals) exploration and development leases, permits, and licenses.
Sec. 105 addresses new ``critical mineral manufacturing
facilities'' and seeks to facilitate the permitting processes for them
for all Federal agencies as well as facilitate coordination and
consideration of permit applications that are under state review. The
bill defines one category of ``critical mineral manufacturing'' to
include ``the production, processing, refining, alloying, separation,
concentration, magnetic sintering, melting, or beneficiation of
critical minerals within the United States'' (Sec. 2(4)(A)). In its
permitting processes, the BLM sometimes reviews and analyzes such
operations if they are to occur on BLM lands. Oftentimes, however,
these and other manufacturing operations are located on non-Federal
lands.
Sec. 105 of the bill also lists several activities that the
President may undertake in cooperative agreements with states regarding
the processing of critical mineral mining permits, including memoranda
of agreement for the coordination and concurrent review of state and
Federal permit applications. The bill also provides for use of
consolidated permit applications for all Federal authorizations and
memoranda of agreement between Federal agencies to coordinate review of
permit applications. The Department supports the goals of optimizing
efficiencies in the review of permit applications and would welcome the
opportunity to explore with the Committee the circumstances under which
a consolidated application for all permits required by the Federal
government would be efficient and effective, bearing in mind the
diverse missions and authorities of the Federal agencies involved. The
Department also supports the goal of coordinating consideration of
mining operations across Federal agencies and is working on many levels
to improve interagency cooperation.
With respect to concurrent Federal and state review of permit
applications (Sec. 105(b)(3)), while the Department supports the idea
of sharing information and coordinating with states to the extent
practicable, we must remain mindful of the multiple authorities
governing the authorization of mineral development, including those
delegated to the states to regulate in certain areas such as the Clean
Air Act and the Clean Water Act.
Conclusion
The Department maintains a workforce of geoscientists (geologists,
geochemist, geophysicists, and resource specialists) with expertise in
critical minerals and materials. The Department continuously collects,
analyzes, and disseminates data and information on domestic and global
rare-earth and other critical mineral reserves and resources,
production, consumption, and use. This information is published
annually in the USGS Mineral Commodity Summaries (USGS, 2011) and
includes a description of current events, trends, and issues related to
supply and demand.
The Department, through the USGS, stands ready to fulfill its role
as the federal provider of unbiased research on known mineral
resources, assessment of undiscovered mineral resources, and
information on domestic and global production and consumption of
mineral resources for use in global critical-mineral supply chain
analysis.
Similarly, we welcome the opportunity to work with the Committee
toward the goal of improving the coordination and efficiency of the
mining permitting process while maintaining environmental standards
We note, however, that many of the activities called for in S. 1113
are already authorized by existing authorities. Any activities
conducted to fulfill the objectives of the bill would require
substantial resources and would need to compete for funding with other
priorities.
Thank you for the opportunity to present the views of the
Department on S. 1113. We will be happy to answer any questions.
Senator Cantwell. Thank you, Ms. Burke. Again, thank you,
to all the witnesses for being here today.
I'm going to start with you, Mr. Sandalow. You touched on
the issue of substitutes. It seems to me that there is no
amount of mining that is going to fully address this issue.
You know, I've read some information about the University
of Nebraska developing a permanent magnet that does not require
rare Earth elements at all. The University of Delaware is
trying to create a nano composite magnet. If successful, this
could result in a huge, reduction in rare earth minerals demand
as much as 30 to 40 percent. Japan is working on Ferrite
magnets that don't need rare Earth.
So could you elaborate on your point about substitutes for
rare Earths and what it will take to bring those products to
the marketplace?
Mr. Sandalow. Thank you for the question, Madame
Chairwoman. It's an extremely important area. You're exactly
right in saying that substitutes are critical to our work in
this area.
We, at the Department of Energy, are supporting work in
developing substitutes. The ARPA-E program, for example, has a
funding opportunity announcement looking at exactly this topic.
Our energy efficiency and renewable energy program is looking
at exactly the same types of issues.
In areas, you know, including not only for magnets but
lighting and other areas, we have the potential to develop
substitutes but it's going to require government partnering
with industry in ways that are productive going forward. I
think the basic research and development that needs to be done
in this area is essential. Then government working with
industry can make the steps that will really make a difference.
Senator Cantwell. The legislation that we have before us
today doesn't do a lot in the area of substitutes. Is that
correct?
Mr. Sandalow. I would look to the sponsors. I do think it's
important that we do develop substitutes and that we work, you
know, productively in that area.
Senator Cantwell. OK. Mr. Sandalow, do our scientists and
engineers have enough data now to evaluate what our domestic
resource base is with respect to critical minerals or is there
more work to be done there?
Mr. Sandalow. For mineral assessment I would defer to
Department of Interior and USGS. But, you know, in general data
collection is an extremely important function of government.
It's one that needs to be funded adequately for the sake of our
companies and our competitiveness.
Senator Cantwell. What about work force? Do we have the
work force there?
Mr. Sandalow. It's such an important issue. Thank you for
asking. We do not.
Education and training is a huge--very, very important
issue in this area, Madame Chair. The educational resources
that have gone into this area in other countries swamp those
that have gone into those in our own country. It's extremely
important that we develop the trained work force to take on
this issue.
Senator Cantwell. Could you elaborate on that? What kind of
investment has China or other countries made in the necessary
skills? Because I would assume it'd be similar to mining in
general or no?
Mr. Sandalow. It's also in chemistry and in a variety of
technical including engineering expertises that are essential
to developing products in this area. You know, at the
Department of Energy there has been expertise at the Ames
National Lab in this area for many, many years. But that type
of expertise needs to be multiplied if this country is going to
be fully competitive in this area in the years ahead.
Senator Cantwell. OK. Thank you.
Ms. Burke, obviously there are many of us here who have
been seeking an update to the 1872 mining law. I'm certainly
one of them. We have royalties for oil and gas and coal. Should
there also be royalties on these minerals?
Ms. Burke. Madame Chairman, as you're aware that we have
proposed legislation as part of the budget to take several
minerals out of the mining law, gold, copper, those sorts of
elements. But we have not looked at what sort of royalty would
be appropriate, if any, on rare Earth or other critical
minerals.
Senator Cantwell. OK. How do you look at this inventory
issue that we were just discussing? Do we have a good
assessment of what the domestic resources are with respect to
critical minerals and materials?
Ms. Burke. I'll defer to Mr. Doebrich.
Senator Cantwell. OK.
Mr. Doebrich. Madame Chairwoman.
Senator Cantwell. Thank God there's not a fourth witness
because you might defer to them. But anyway.
Mr. Doebrich. That's true.
Senator Cantwell. Go ahead.
Mr. Doebrich. The only minerals or elements or metals that
have been systematically assessed on a national basis are gold,
silver, copper, lead and zinc. So rare Earths and other
minerals that are considered as critical have yet to be
assessed nationally in a systematic way. That's what we're
preparing to do in the coming years.
Senator Cantwell. What does that mean we're preparing to
do? So we have a plan. We have the resources. We have a
deadline. How long would it take? That.
Mr. Doebrich. Yes. We are in the process of updating our
national data bases, in the process of updating our deposit
models that are required to do these assessments. One of the
things that we've been involved with heavily over the last 10
years is a global assessment for a copper, pot ash and platinum
development.
So we are waiting for the completion of that which is
happening at the end of this fiscal year before we have human
resources available then to embark on a new national
assessment.
Senator Cantwell. OK. I think I'll come back to this in a
second round. Senator Murkowski, would you like to ask
questions?
Senator Murkowski. Thank you for your attendance here today
and for working with us on these issues. You mentioned, Ms.
Burke, in your testimony that you welcome the opportunity to
work with the Committee toward the goal of improving the
coordination and the efficiency of the mining permitting
process while maintaining the environmental standards. We've
got to work on the efficiency side.
Recognizing, again, as I stated in my opening comments,
that we're dead last when it comes to this permitting process
and how long it takes, anywhere from 7 to 10 years. So we do
want to work with you on that. We do want to try to gain some
efficiencies within the process itself.
Let me ask both of you. The Critical Materials Strategy
Report that came out in December, I understand that sometime
before the end of this year there's going to be a new version
or an update to that report. As good as the report was, as
important as it was, I think there were some concerns that it
didn't--there wasn't a lot of interagency coordination as you
worked to identify problems and potential solutions.
I--we say in the report that we're dead last. Acknowledge
that. But what have we identified in terms of what the solution
is to that. Other than just saying, well, that's kind of the
responsibility of the Department of the Interior.
So since we've got both agencies today I guess I would ask
you to commit to working more collaboratively on this next
report that's coming out so that we can hopefully have some
more specific proposals than we saw with the last report.
You're both nodding your heads. So I take it you agree that
this is a good approach.
Mr. Sandalow. We'd be delighted to do that, Senator. Thank
you for the question and the suggestion. I would add that just
yesterday there was a meeting convened by the Office of Science
and Technology policy among all the major Federal agencies on
this topic. There's been very active interagency conversation
in the prior months. I know that's the plan going forward.
So completely agree and thank you very much for the
suggestion.
Senator Murkowski. OK. Good.
Also to both of you when I released my discussion draft of
the Critical Mineral Policies Act for comment, we got a number
of comments back to that advocating for the designation of
certain USGS offices as principle statistical agencies. I'm
wondering if either one of you would care to comment or react
to this suggestion. As I understand it would represent a fairly
significant reorganization of the minerals information,
functions at USGS and would allow the Federal Government to
compel the provision of information that in the past has just
been made voluntarily.
Is this something that the Administration would support? Is
this a good idea? Bad idea?
Mr. Doebrich. We'd actually like to better understand what
the full ramifications of that designation would mean because
we really don't at this moment. So we'd like to actually answer
that for the record.
However, I will say that our current collection of
production and consumption information, that is done
voluntarily and has been done for many years. Through that
process we've generated a tremendous amount of trust with the
industry and in the production, those who produce and provide
materials in the minerals industry. We are, by law, required
should the supplier have the information request to keep this
information proprietary and so this is OMB guidance and OMB
regulations.
So far it's worked very well. We've had very good response
using the voluntary method. Again this is through many, many
years of doing this and generating a tremendous amount of trust
with our partners out there.
Senator Murkowski. So you'll communicate with us in terms
of where you might come down one way or another on that? I'd
appreciate that. OK.
Let me ask about the Federal, State and local regulatory
programs that I mentioned. I think there were 30, no less than
30 different regulatory programs that mining operations are
subject to. In looking at the legislation that I've put forward
can you tell us whether or not it amends, weakens or in any way
modifies any existing, environmental regulatory program?
Ms. Burke.
Ms. Burke. When we reviewed the bill we did not look at
that specific question. But on its face it does not appear to
amend any of those laws or regulations.
Senator Murkowski. OK. Good. Thank you.
Thank you, Madame Chair.
Senator Cantwell. Thank you.
Senator Bingaman.
The Chairman. Thank you very much. Thanks for chairing the
hearing. Let me ask, Mr. Sandalow, I happened to be in Japan
last fall when the problem arose with the Chinese cutting off
access to rare Earth shipments to the Japanese. Now they claim
they didn't do that. But the Japanese think they did.
I was visiting with the Japanese Minister of Economy, Trade
and Industry. It was his strong opinion and I shared his
opinion that there had been an effort by China to
systematically undersell other producers in the world and
thereby to drive a bunch of people out of business. Therefore,
the Chinese remained the sole remaining source for these rare
earth elements.
That was the problem. We needed to find a way to cause the
production of these elements to occur again in the United
States, as they had in the past, and this--I saw you visited
this mine in California. They're gearing up now, I think,
because the price of these elements has gone up again. They
find it profitable to go back into the business in a more
serious way as I understand it.
So, sort of starting from the general proposition that
unless we diagnose the problem correctly, we're not likely to
fix it. I don't really believe, based on what I've seen that
the problem, the core problem here is the permitting process. I
think my colleague Senator Murkowski referred to bureaucratic
intransigence as the reason why we do not have a production of
these rare earth elements.
I don't doubt that there's bureaucratic intransigence. It
is everywhere I've ever seen, acknowledge that.
But the main problem here is it hasn't been profitable for
U.S. farms to produce these minerals. We have the minerals. We
have the rare Earth elements. It hasn't been profitable.
So what we need to do is to find a way to not only--it's
now profitable again because the prices are up. But to ensure
that there's going to be a reasonable price for these minerals
going forward in the world market. I guess my other concern,
I'll just add this before I finish my soliloquy here is I'm
told that the Chinese have now shifted to a deal where they're
consolidating their production of rare Earth elements in a
single company. That to me is a little bit concerning as well
in that it makes it a lot easier to ensure that the supply and
the price is what you in fact want it to be for purposes of the
world market.
So what's your reaction to all of this? I'm just wondering
if we charge off here and change the permitting process and do
all these things. The price of these elements may still drop
through the floor here one of these months. Everyone in the
U.S. who is in this business will shut down in a hurry. They
will in my State.
Mr. Sandalow. Thank you, Senator, for those very thoughtful
comments. I would respond as follows. I think your comments
highlight the problem whenever any resource is produced at
levels of 90 percent or more from one country. That is going to
be a problem when there's a global supply chain for those
minerals.
So it is essential that we find a way to globalize the
supply chain, including domestic production right here in the
United States. As part of that strategy essential that we also
find substitutes and that we find ways to minimize the use.
That we do so, as your question suggests, on an economically
sustainable basis.
That's going to take government and industry working
together in partnership. I think it's something that, I know
it's something that we can achieve if we work together and do
it right.
The Chairman. Has the Administration considered the
possibility? I mean, we have a buy America provisions at the
Department of Defense operates under where we would give some
preference to products that incorporate rare Earth elements
that are produced in this country to the extent that they're
available. Going forward, is there any thought of doing
something to that effect?
Mr. Sandalow. That's not been part of discussions that I'm
aware of, Senator, but certainly something that we could look
at.
The Chairman. Thank you very much.
Senator Cantwell. Next is Senator Heller.
Senator Heller. Thank you, Madame Chairwoman.
I've actually come here for the next panel, but I'm very
interested in the discussion that we've had in the last few
minutes. So it has produced some questions in my own mind. So I
appreciate you giving me a few minutes.
One of the--you brought up the issue of mining reforms and
perhaps changing the royalty formulas on some of the hard rock
minerals that we mine in this country. I don't know a lot about
the history here in the Senate. But I can tell you somewhat of
the history in the House and why some of those reforms were
difficult to pass was because usually most of the products that
came out of the House probably did more to discourage mining
production that it did encourage mining production.
So I guess my only point or argument is I'd certainly like
to be part of that discussion as you move forward. Because I
think we can come to an agreement with something that does in
fact encourage mining production as opposed to something that
may be too onerous for the industry to go forward. So anyway
thanks for your comments. I'd certainly like to be involved to
what extent maybe.
I want to also follow up on what Senator Bingaman was
saying talking about the permitting process. That is an issue
of contention in my State. Exploration is one thing. The many
years it takes, obviously, to explore claims and to put it to a
point of production. But at that point, that process for
permitting may take 7 to 10 years.
When I talk about mining production in Nevada, our State
has very high unemployment. Those counties that have high
mining production, the unemployment in those counties are half
what it is in the rest of the State. So mining works very well
and plays well in our State.
So the question that I have is with all the time it takes
to do the exploration, all the time it takes for the permitting
process and in this case, generally 7 to 10 years. I guess my
question for Ms. Burke would be given your knowledge of the
importance of developing these resources how do you propose,
how would you propose to improve this permitting process,
particularly while we wait for current legislation efforts to
become law?
Ms. Burke. Thank you for the question, Senator. Before I
launch, headlong, into our proposals for how we might improve
the process. I just wanted to clarify that the 7 to 10 years is
the time it takes from discovery to go into production. The
BLM's permitting process on average for a large mine takes 4
years.
So there are obviously other permits from State and local
officials, that sort of thing, that can add additional time.
But the BLM's permitting process, on average, takes 4 years.
Just last week or 2 weeks ago, our Director, Bob Abbey, was
in your great State of Nevada.
Senator Heller. He's from Nevada.
Ms. Burke. Meeting with the Governor and industry and
others to discuss this very, very issue. As you may be aware,
our office in Nevada is sort of, a pilot if you will, having
put in place some efforts to try to streamline or facilitate
the more efficient processing of permits. While it is still
very early on in this, sort of, new process to tell, I believe
that folks are optimistic that the sorts of things that Nevada
is trying to do will in fact garner the types of results that
we're all seeking.
Senator Heller. OK. I appreciate your comments. Because I
share with the Governor and have had this discussion with both
Mr. Abbey and the Governor, obviously, on this process and the
impact that it has on the State of Nevada.
So anyway, I thank you for your comments and look forward
to working with you down the road as we try to iron out some of
these issues.
Thank you, Madame Chairwoman.
Senator Cantwell. Thank you, Senator Heller.
Senator Franken.
Senator Franken. Thank you, Madame Chair.
This is for anyone. Many electronics have rare Earth
elements and other critical materials in them. Senator Bingaman
was talking about the Japanese. They have taken up something
called urban mining, which means they take old electronics and
they reuse or recycle the critical elements that they contain.
Best Buy which is headquartered in my great State of
Minnesota, Ms. Burke, has an electronic recycling program where
they recycle many kinds of electronics that people bring in for
free. Is this something that we can promote? I know that costs
are high to recycle, to make widespread recycling of critical
materials feasible. But can we somehow reduce the price?
Also if you don't recycle these materials very often they
end up being very toxic. So I was wondering what role
reprocessing of electronics could play in making sure that we
have these rare Earth elements and recycle them and other
critical materials?
Mr. Sandalow. Thank you for the question, Senator. It's an
important one. The answer is yes, this is an area that we must
look into and that we are looking into.
There are tremendous opportunities with respect to the
recycling of rare Earth metals. I think you're going to hear
some more about that on the next panel from some of the leaders
in this area.
Senator Franken. OK.
Mr. Sandalow. One of the challenges has been that these
rare Earth metals in particular are often found in very trace
amounts in the products in which they are located. So
separating them and then reusing them can be a challenge for
that reason. But that underscores, I think, the opportunity in
doing research into new designs that might facilitate the
removal of these at the end of the product's life.
That's an area of great interest at the Department of
Energy. I think it's one that some of the companies you're
going to hear from are working on as well.
Senator Franken. Now very often these old things, these old
electronics are exported and end up in, you know, in countries
that where they end up being toxic to the environment. I think
that's something that we need to try to avoid.
On the permitting process, I do want to make--understand
this distinction because I kept hearing this 7 to 10 year
thing. Senator Heller was--it sounded like he was saying that
once the exploration has been done then it takes 7 to t10. We
have a mine, a potential mine up in Northern Minnesota that has
some of these rare metals.
What's slowed it down is they did an environmental impact
study and it didn't quite cut mustard. But they're doing it
again. I'm confident that eventually they will be able to
figure out how to do this mining without harming the water
table.
But, I mean, which is it? Is it 7 to 10? Is it--what--run
it down for me? Give me some kind of idea of what is a typical
process.
Ms. Burke. The 4 years that I was speaking of is from the
time that an operator files a plan of operation or an
application with the BLM to the point that we reach a final
decision about whether or not the mining operation can go
forward and under what conditions.
Senator Franken. But you couldn't permit it before that
anyway, I mean, right?
Ms. Burke. Before the discovery and exploratory work?
That's correct.
Senator Franken. OK. So what is the 7 to 10, exactly?
Ms. Burke. That is taking into account the discovery and
exploration and even beyond the time that is necessary for the
BLM to process the application.
Senator Franken. But the plan of operation--what is it?
It's 4 years from when?
Ms. Burke. From when the industry files the plan of
operation which is in essence an application with the BLM.
Senator Franken. OK. So I don't see how anything could be
permitted before there is a plan of operation.
Ms. Burke. That's correct.
Senator Franken. OK. So then why is this number for the
permitting process 7 to 9 years? I mean, wouldn't it be 4
years?
I mean, in other words, I don't want to argue over
semantics. But it seems to be misleading to say it's 7 to 10
years if, you know, the permitting process is what I would call
the permitting process in which you process the permit. Right?
So that would only happen once someone asked for a permit.
Ms. Burke. That is correct.
Senator Franken. OK. I just want to make that clear. Thank
you, Madame Chair.
Senator Cantwell. Thank you.
Senator Barrasso.
Senator Barrasso. Thank you very much, Madame Chairman.
Very clear. I appreciate it.
[Laughter.]
Senator Franken. Good.
Senator Barrasso. They call that 7 to 9 years the Al
Franken decade.
[Laughter.]
Senator Barrasso. The--I want to thank Senator Murkowski
for her continued leadership on this critical mineral issue.
It's--I'm an original co-sponsor of her Critical Minerals
Policy Act 2011. It's an important piece of legislation to
reduce U.S. dependence on foreign sources of critical minerals.
You know, in Wyoming we have a company that is looking to
open a rare Earth mine. It's an exciting project. It could help
address some of the rare Earth supply chain issues. But they
have a long way to go before it becomes a reality.
China now controls an estimated 97 percent of the global
production of rare Earth elements. China's critical minerals
strategy is clear. It wants to give itself a competitive
advantage in manufacturing and in other industries. Rare Earth
elements are an essential part of wind turbines, solar panels
and with control of a key aspect of the supply chain, China
then has a clear advantage in manufacturing wind turbines and
solar panels.
Last year the Department announced a plan for speeding the
permitting for solar projects on public lands to so called
solar zones and also announced a process to streamline the
permitting for wind projects. It highlights a problem that
exists across the board. Permitting any kind of project in this
country is a major challenge.
Burdensome regulations, cumbersome bureaucracy stand in the
way of American energy and mining. The Murkowski bill includes
an examination of the inefficiencies in the permitting process
and provisions to help Federal and State coordination. These
provisions are important because permitting can be a major
hurdle, especially when Federal land is involved. So more needs
to be done to address this.
So my question, Mr. Sandalow is in your testimony you
mention recycling and alternative sources of material as ways
to address shortages in rare Earths and the negative impact on
solar and wind energy of those concerns. You specifically
referenced coal ash as a potential source of material. The EPA,
you know, is currently considering regulating coal ash as a
hazardous waste which will hurt the beneficial reuse of coal
ash.
So the market for beneficial reuse of coal ash is already
cratered because of uncertainty over the threat from the EPA of
these additional regulations. So we have an Administration
that's promoting a strategy to use coal ash to meet our
critical mineral needs. But at the same time, the
Administration through the EPA is considering regulations that
will serve as a major impediment to what is to here, today, the
Administration's strategy. I've, you know, memos from the
Department of Energy and all that I know you're familiar with.
So if EPA regulating coal ash is a hazardous waste that's
going to undercut the DOE strategy for promoting critical
minerals. What's going on now between the Department of Energy,
EPA? They're submitting comments regarding coal ash regulations
and the potential impact on our critical mineral strategy.
Mr. Sandalow. Thanks for the question, Senator. I believe
we can and we must find ways to accomplish both the goals that
are identified in your question. That is, addressing the
environmental implications of the disposal of coal ash and
finding ways to beneficially reuse that product for American
industry. We can do that.
Working together between the EPA and DOE then as well
between government and industry, we can find ways to achieve
both those goals.
Senator Barrasso. So have you been communicating
specifically with the EPA or where are we along the process?
Could you kind of just outline that a little bit for the
Committee?
Mr. Sandalow. That I would have to take back for the
record, Senator. DOE and EPA are always talking about these and
other issues on a regular basis. But----
Senator Barrasso. But things are actually ongoing with
this?
Mr. Sandalow. Yes.
Senator Barrasso. Sometimes we've had different people from
different--oh, yes, we're working on it. Then you say, well
what are you doing? Find out it's not going as well as we would
like.
Mr. Sandalow. I'm not personally familiar with the details
of those conversations, Senator. But I'd be happy to take that
for the record and let you know.
Senator Barrasso. Alright. I'd really like to hear back
because I think it's an important issue and it's going to have
a major impact on this. Thank you.
We are engaging in relevant policy and technical
discussions with EPA and other interagency partners to identify
and pursue opportunities to beneficially reclaim rare earths
while simultaneously addressing any environmental implications
with regards to coal ash. It should be noted that research is
still at the early stages for extraction of rare earth elements
(REE) from coal ash. If this source of rare earth elements
turns out to be economically and technically viable, we would
be interested in innovative approaches that both utilize the
resource and protect human health and the environment. One
approach would be to extract REE's and other materials as part
of a treatment process, where treatment changes the physical,
chemical, or biological character of a waste to make it less of
an environmental threat.
Senator Barrasso. Thank you, Madame Chairman.
Senator Cantwell. Thank you. I'd like to move on to the
second panel. I know Senator Murkowski had a quick question she
wanted to ask one of the witnesses before we did that.
Senator Murkowski.
Senator Murkowski. I thank you, Madame Chair. I will
attempt to be brief. We're talking about critical minerals. Of
course the question is is how are we defining critical?
Mr. Sandalow, I had to go back to your written testimony
because you had stated that within the critical minerals
strategy, the report that was released, you say for this
purpose criticality was a measure that combined importance to
the clean energy economy and the risk of supply disruption. In
my bill, we do include--we include the component about risk to
supply and the disruption. But also not just importance to the
clean energy economy but also defense, health care related
applications.
I'm assuming you don't disagree that that should also not
be what we look at when we define what is critical?
Mr. Sandalow. Yes. Our report coming out of the Department
of Energy was focused in particular on energy related
applications. I think more broadly speaking the term
criticality would refer to a broader set of issues.
Senator Murkowski. OK. I just wanted to check.
Thank you, Madame Chair.
Senator Cantwell. Thank you. Again, thank you to the
witnesses for your involvement and testimony on this issue. I'm
sure we'll work with you as we continue to move forward on
legislation.
We're going to go to the second, or actually third panel,
technically, and have them come up and join us at the Dias.
That is, Dr. Jonathan G. Price, State Geologist and
Director from the Nevada Bureau of Mines and Geology.
Mr. Luka Erceg, President and CEO of Simbol Materials in
Pleasanton, California.
Dr. Steve Duclos, who is Chief Scientist at GE Global
Research.
Mr. Mark Caffarey, who is with--who is Executive Vice
President of Umicore in Raleigh, North Carolina.
I know Senator Heller you have a connection here. Did you
want a few comments of further introduction of Mr.--of Dr.
Price?
Senator Heller. If I may, please.
Senator Cantwell. Yes, go right ahead.
Senator Heller. Thank you, Madame Chairman.
It is my pleasure to welcome Dr. Jonathan Price to the
Energy and Natural Resources Committee, Subcommittee on Energy,
to discuss the minerals bill before us today. Dr. Price is
Nevada's State Geologist and Director of the Nevada Bureau of
Mines and Geology, which is Nevada's research, public
information and geological survey unit housed out of the
University of Nevada, Reno. He's also a tenured professor at
the Mackay School of Earth Sciences in Engineering, one of the
premier mining schools in the nation.
Mining is an integral--is integral to Nevada's history. We
have a proud tradition of leading the Nation on mining and
minerals research. Mining provides more than 60,000 direct and
indirect jobs in Nevada, is responsible for over $204 million
in tax revenue and contributes $9.5 billion in economic
activities in 2009. Nevada currently has the highest
unemployment rate in the country. However, in the areas of my
State that rely on mining, such as the Elko area, the
unemployment rate is nearly half the State's average because of
the economic activities associated with mining.
Not only is mining the backbone of Nevada's rural economy,
without mining we couldn't even produce the products we consume
every day nor could we get them to market. From microwaves to
medical devices to smart phones and the trucks that deliver
goods to market, none of it would be possible without mining.
Traditional and emerging industries, our national defense
systems and national security requires elements and minerals
that would not be available without mining.
Mining is critical to our economy and national defense. Our
country should have a policy that promotes mining rather than
discourages it. I am so pleased that Dr. Price is here to share
his perspective with us. His vast achievements, research,
honors, awards and publications speak for themselves and I know
we're all eager to benefit from his expertise on the subject
matter before us.
Again, Chairman Cantwell, thank you for having Dr. Price
here with us today.
Senator Cantwell. Thank you, Senator Heller. With that
introduction, Dr. Price, we're going to let you go first and
then we'll here from the rest of the witnesses.
Thank you all for being here this afternoon.
Dr. Price.
STATEMENT OF JONATHAN G. PRICE, STATE GEOLOGIST AND DIRECTOR,
NEVADA BUREAU OF MINES AND GEOLOGY, RENO, NV
Mr. Price. Thank you. My name is John Price. I'm testifying
today from my perspective as Nevada State Geologist and as Co-
Chair of a 2011 study on energy critical elements by the
American Physical Society and the Materials Research Society. A
copy of this study is appended to my written testimony. By the
way, there's a paragraph in there that addresses this issue
that was discussed earlier about the timing for exploration
verses development.
Thank you for this opportunity to comment on the importance
of your work in addressing the national issues regarding
critical minerals. Graphs at the end of my written testimony
provide some context for the issues.
Firstly, global demand for nearly every mineral and energy
commodity is rising in part because global population is rising
and in part because average standard of living is also rising.
Second, China's dominance in the minerals arena presents
challenges, threats and opportunities. The world isn't running
out of mineral resources. Long term demand will likely be met
by supplies from a global free market. The resources are,
however, unevenly distributed geologically and geographically
such that short term supplies of raw materials and value added
manufactured products can be interrupted leading to price
increases that can be significant concerns for the U.S.
economy.
Energy critical elements or ECEs as we call them in the
report, are a class of chemical elements that are critical to
one or more new energy related technologies. A shortage of
these elements would significantly inhibit large scale
deployment which could otherwise be capable of transforming the
way we produce, transmit, store or conserve energy. The report
identifies 3 primary areas of potential actions by the United
States to ensure the availability of ECEs.
One, information collection, analysis and dissemination.
Two, research development and work force enhancement.
Three, recycling.
Recognizing that the Department of Defense is responding to
the 2008 National Academy of Science's report on managing
materials for a 21st century military, the ECE report did not
address defense stockpile issues. Did not recommend stockpiles
for purely economic reasons. The bills currently pending in the
Senate do an excellent job of addressing many of the
recommendations made in the ECE report.
The following changes could make the legislation even more
effective. Two of the bills have sections covering information
collection, analysis and dissemination. The ECE report, as well
as the 2008 National Academy of Science's report on critical
minerals recommended that the USGS be given more authority and
elevate it to a principle statistical agency as is the Energy
Information Administration.
All the bills establish R and D programs. However the ECE
report recommended a somewhat broader research spectrum. In our
view the Federal Government should establish an R and D effort
focused on ECE's and possible substitutes that can enhance
vital aspects of the supply chain including geologic deposit
modeling, mineral extraction and processing, material
characterization and substitution, utilization, manufacturing,
recycling and life cycle analysis.
The ECE report made an additional recommendation regarding
recycling. Steps should be taken to approve rates of post
consumer collection of industrial and consumer products
containing ECEs beginning with an examination of the numerous
methods explored and implemented in various States and
countries.
Allow me to conclude with some personal comments. The State
Geological Surveys have critical mineral data, geological
samples available for research and expertise that are not
easily accessible to the USGS. For example, New Mexico has data
on rare Earth elements tellurium and beryllium and Alaska makes
its new information about domestic mineral resources readily
available for follow up by industry.
In Nevada currently the U.S.'s only lithium producer, our
State Geological Survey houses considerable information on the
geological framework for lithium deposits. It would be
appropriate for the bill that deals with permitting issues to
specifically identify State regulators as stakeholders within
the Federal critical minerals working group should consult. In
many States, including Nevada, State and Federal regulators try
to work together to speed up the process but the slowness of
permitting, particularly on federally managed lands continues
to be a major deterrent to domestic exploration and production.
Finally, I believe that authorization levels are too low
for the tasks assigned. Given the number of chemical elements
that are likely to be considered critical, the USGS's Mineral
Resources Program would need at least twice the amount of
funding allocated. In addition, the funding for R and D seems
low by a factor of 5. These issues could be addressed by
reprogram or resources within the USGS and DOE.
Thank you.
[The prepared statement of Mr. Price follows:]
Prepared Statement of Jonathan G. Price, State Geologist and Director,
Nevada Bureau of Mines and Geology, Reno, NV
My name is Jonathan G. Price. I am the Nevada State Geologist and
Director of the Nevada Bureau of Mines and Geology, which is the state
geological survey and a research and public service unit of the Nevada
System of Higher Education at the University of Nevada, Reno. I am
testifying today from my perspectives as State Geologist and as the Co-
Chair of a 2011 study on Energy Critical Elements: Securing Materials
for Emerging Technologies by the American Physical Society's Panel on
Public Affairs and the Materials Research Society. A copy of this study
is appended to my testimony.
Thank you for this opportunity to comment on the issues of critical
minerals and the three bills that you are considering.
Four graphs at the end of this testimony provide some context for
the issues. Global demand for nearly every mineral and energy commodity
is rising, in part because global population is rising and in part
because average standard of living is also rising. Neither copper nor
iron are considered critical minerals in most discussions today,
because their resources are widely distributed geographically, and
markets for them are well established, but they help provide context on
the rising demand for the minerals that are considered critical or
strategic. The continuing historical rise in demand for copper, an
example of a mineral commodity needed for modern society, is documented
in Figure 1.* To meet global demand, the world needs to mine the
equivalent of one huge copper deposit each year and find a new one to
replace the depleted reserves. Although conservation and recycling can
lessen the demand for newly mined copper, the increases in both global
population and average standard of living require more mining.
---------------------------------------------------------------------------
* Figures 1-4 have been retained in subcommittee files.
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Domestic resources for most, but not all, mineral commodities occur
in the United States, where they are mined using the world's best
practices for environmental stewardship and health and safety for
workers and the public. The Federal government (specifically through
the U.S. Geological Survey in the Department of Interior for most
mineral resources and through the Department of Energy for some of the
energy resources) has a vital role in documenting domestic production
and reserves and in assessing the likelihood of future discoveries that
will add to the mineral and energy resources of our country.
Global iron-ore production and, by that measure, the rise of China
as a major economic power, is shown in Figure 2. The dominance of China
as a producer of mineral and energy commodities today is illustrated in
Figures 3* and 4*. These graphs use critical data collected and
reported by the USGS. China's dominance in the minerals arena presents
challenges, threats, and opportunities for the United States.
The world isn't running out of mineral resources; long-term demand
will likely be met by supplies from a global free market. The resources
are, however, unevenly distributed geologically and geographically,
such that short-term supplies of raw materials and value-added
manufactured products can be and have been interrupted, leading to
price increases that can be significant concerns for the U.S. economy
and the economies of other, less mineral-rich countries.
The report on Energy Critical Elements: Securing Materials for
Emerging Technologies (the ECE report) surveys potential constraints on
the availability of these elements. Energy-critical elements (ECEs) are
a class of chemical elements that currently appear critical to one or
more new energy-related technologies. A shortage of these elements
would significantly inhibit large-scale deployment, which could
otherwise be capable of transforming the way we produce, transmit,
store, or conserve energy. The report addresses elements that have not
been widely extracted, traded, or utilized in the past, and are
therefore not the focus of well-established and relatively stable
markets. The report discusses a number of constraints on the
availability of ECEs for the U.S. and world markets:
(a) Crustal abundance, concentration, and distribution.
Whereas exploration benefits from well-tested geological models
of ore deposits for the more common metals, such understanding
is lacking for many of the less common elements.
(b) Geopolitical risk. The production of some ECEs is
dominated by one or a few countries.
(c) Risk of joint production. Tellurium and selenium are good
examples of ECEs that are produced as byproducts of a more
common metal--copper. There is little incentive to increase the
production of these byproduct metals, as long as their prices
remain low relative to their abundances.
(d) Environmental and social concerns. As countries that now
have lax environmental, safety, health, and social impact
standards embrace higher standards, the price and availability
of ECEs may be significantly affected.
(e) Response times in production and utilization. The time
period from exploration to production is commonly 5 to 15 years
or longer, and there are similarly long timeframes, sometimes
decades, for bringing a new technology, such as a new choice of
elements for photovoltaics, to market.
The report identifies five specific areas of potential action by
the United States to insure the availability of ECEs:
(1) Federal agency coordination;
(2) information collection, analysis, and dissemination;
(3) research, development, and workforce enhancement;
(4) efficient use of materials; and
(5) market interventions.
Recognizing that the Department of Defense is responding to the
2008 National Academy of Sciences report on Managing Materials for a
Twenty-first Century Military, the ECE report did not address military/
defense stockpile issues, and apart from helium, which has special
physical and geological properties, did not recommend stockpiles of
ECEs for purely economic reasons.
The bills currently pending in the Senate--S. 383, S.421, and
S.1113--do an excellent job of addressing many of the recommendations
made in the ECE report, but some changes, following recommendations in
the ECE report, could make the legislation even more effective.
Specifically:
(1) S.383 and S.1113 have sections covering information
collection, analysis, and dissemination. The ECE report, as
well as a 2008 National Academy of Sciences report on Minerals,
Critical Minerals, and the U.S. Economy, recommended that the
USGS (or whatever agency is given the primary responsibility
for mineral-resource data collection and analysis) be given
more authority and elevated to a ``Principal Statistical
Agency,'' as is the Energy Information Administration in the
Department of Energy. This designation could be added to S.1113
(Sec. 103-Resource Assessment or Sec. 107-Analysis and
Forecasting) or S.383 (Sec. 3).
(2) All the bills establish research and development
programs, and S.383 and S.1113 address workforce issues.
However, the ECE report recommended a somewhat broader research
spectrum than the bills that have been introduced. In our view,
the Federal government should establish an R&D effort focused
on ECEs and possible substitutes that can enhance vital aspects
of the supply chain, including geological deposit modeling,
mineral extraction and processing, material characterization
and substitution, utilization, manufacturing, recycling, and
life-cycle analysis.
(3) S.383 and S.1113 include sections dealing with research
on efficient use of materials (recycling, substitutions, etc.).
The ECE report included an additional recommendation regarding
recycling:
Steps should be taken to improve rates of postconsumer
collection of industrial and consumer products containing ECEs,
beginning with an examination of the numerous methods explored
and implemented in various states and countries.''
S.1113 appropriately recognizes the value of having the USGS and
DOE work with State geological surveys on resource assessments (Sec.
103). The State geological surveys often have critical-mineral data,
geological samples available for research, and expertise that are not
easily accessible to the USGS. For example, Peter Scholle, the New
Mexico State Geologist, and Virginia McLemore, economic geologist on
their staff, informed me about New Mexico's data on rare earth
elements, tellurium, beryllium, and other resources, and Robert
Swenson, the Alaska State Geologist, noted that their efforts have made
new information about Alaskan resources, including platinum-group
elements, readily available for follow-up by industry. In Nevada,
currently the U.S.'s only lithium producer, our State geological survey
houses considerable information on the geologic framework for lithium
deposits. At the University of Nevada's Mackay School of Earth Sciences
and Engineering, in a joint project with the USGS, we are using samples
from the Mackay-Stanford Ore Deposits Collection to begin to understand
the distribution of tellurium and selenium in both domestic and
international copper deposits. The coastal Atlantic States, from
Florida to Maine, have data on offshore and near-shore resources of
heavy mineral sands, which need to be included as long-term resources
for rare earth elements, titanium, zirconium, and other potentially
critical minerals.
It would be appropriate for Section 104 of S.1113, which deals with
permitting issues, to specifically identify State regulators as
stakeholders with whom the Federal Critical Minerals Working Group
should consult. In many states, including Nevada, State and Federal
regulators try to work together to speed up the permitting process, but
the slowness of permitting, particularly on Federally managed lands,
continues to be a major deterrent for domestic exploration and
production.
Section 102 (Policy) of S.1113 encourages ``Federal agencies to
facilitate the availability, development, and environmentally
responsible production of domestic resources to meet national critical
minerals needs.'' This wording is consistent with the June 2011
statement by the Society for Mining, Metallurgy, and Exploration
concerning rare earth elements:
It is critical to establish a domestic rare earths minerals
production industry to help secure the Nation's clean energy
future, reduce the U.S. vulnerability to material shortages
related to national defense, and to maintain our global
technical and economic competitiveness. Given that the Chinese
dominance of the rare earths market has adversely impacted
supply stability and endangers the United States and its
allies' assured access to key materials, rare earths should
qualify as materials either strategic or critical to national
security. Further, the U.S. government should facilitate the
reintroduction of a globally competitive rare earth industry in
the U.S.
It is important to emphasize the globally competitive phrase,
because the U.S. industries must be economically viable in the global
economy. For some mineral commodities, the U.S. may not have sufficient
resources that are of high enough grade or large enough to be
competitive in today's market. S.383 (Sec. 3) and S.1113 (Sec. 107 and
109) emphasize analyzing U.S. known and undiscovered, potential
supplies in context with global supplies. The policy section (Sec. 6)
of S.383 appropriately uses the term economically sound in its emphasis
on domestic supplies: ``promote and encourage private enterprise in the
development of economically sound and stable domestic critical minerals
and materials supply chains.''
Section 303 (Authorization of Appropriations) of S.1113 authorizes
levels that are, in my opinion, too low for the tasks assigned in
Sections 103 (Resource Assessment), 106 (R&D), and 107 (Analysis and
Forecasting). Sections 103 and 107 fall within the charge of the USGS's
Mineral Resources Program. Given the number of chemical elements that
are likely to be considered critical, including those identified in the
ECE report, the USGS's Mineral Resources Program would probably need at
least twice the amount of funding allocated for Section 103 ($40
million rather than $20 million). In addition, the funding for R&D
seems low by a factor of five ($7.5 million per year rather than $1.5
million per year for the five-year period). These issues could be
addressed by reprogramming resources within the USGS and DOE.
Thank you, again, for this opportunity to comment on the importance
of your work in addressing the national issues regarding critical
minerals.
Senator Cantwell. Thank you, Dr. Price, for your testimony
and for being specific about each of the pieces of legislation
before us. We'll get a chance to ask you questions in a few
minutes.
Mr. Erceg, thank you.
STATEMENT OF LUKA ERCEG, PRESIDENT AND CEO, SIMBOL MATERIALS,
PLEASANTON, CA
Mr. Erceg. Yes, Senator.
Senator Cantwell. OK. Thank you very much for being here.
Go ahead with your testimony.
Mr. Erceg. Good afternoon. My name is Luka Erceg. I am
President and CEO of Simbol Materials. I'd like to thank you
for the opportunity to testify today regarding the important
legislation before this committee. Simbol supports these 3
bills and we believe that they will drive innovation, job
creation and American competitiveness in the global economy.
Simbol is today commercializing an innovative and
sustainable process to produce lithium, manganese and zinc
domestically and currently operates a demonstration plant co-
producing these critical materials from the affluent brines of
geothermal power plants. We're currently permitting our first
commercial facility and when complete we will be the only U.S.
producer of manganese and electrolytic manganese metal, also
known as EMM.
Second, we will double the U.S. lithium production by the
end of 2012.
We firmly believe the U.S. Government can drive investment
by establishing a clear definition for critical minerals and
materials. We believe that lithium and manganese should be
considered critical due to the lack of U.S. based production.
Lithium is critical because it is an essential component in
advanced batteries for electric vehicles and other energy
storage applications. The U.S. imports upwards of 80 percent of
its current needs.
Manganese is critical because the EMM compound is essential
for producing specialty steels for defense applications and the
manganese dioxide compound is a key metal also used in electric
vehicle batteries. However the U.S. is 100 percent reliant on
foreign sources of manganese ore. 95 percent of the world's EMM
today is produced in China. None is produced in the United
States. Despite this reliance only the Defense Logistics Agency
is classified manganese or EMM as critical materials.
Now these are not criticisms of any agency. Rather, they
demonstrate the need for clarity in the definition of critical
materials across the U.S. Government. We're concerned that the
current legislative proposals may result in a rear view mirror
effect through the study and review provisions. As such we
would ask the Committee to consider a self classifying
definition that's based upon first, the use of specific
materials in industries that support strategic or policy
priorities and secondarily, the level of U.S. production and
processing. These self classifying definitions would provide
real time signals to markets and to industry prompting
investments. Agencies could still focus on materials of
interest to them without government picking winners or losers.
Now Federal support for R and D is a powerful driver for
private investment into critical materials production. We
firmly support R and D and deployment activities in the
proposed legislation as it will jump start a supply chain for
domestic material production. Now Federal R and D support to
de-risk new technologies when it's coupled with commercial
sector investments, sends inordinately large market signals
that encourage follow on investing in areas of policy interest.
These signals will lead to job creation.
I'd like to give you an example that in 2009, the
Department of Energy's Geothermal Technologies Program
announced a $3 million grant to Simbol to demonstrate our
processes. Following the grant announcement Simbol raised a
further $43 million in capital, prior to even receiving the
first Federal grant dollar. The government's validation of
Simbol sent a clear signal to the market that stimulated
commercial investments 12 times the grant itself.
With this support we grew our work force from 16 to 40. We
will reach 60 by year end and we'll continue further job
creation through construction and operations of our facilities
in the near future. These R and D opportunities create
opportunities for universities to train the next generation of
scientists and engineers. Critical, because it is inordinately
difficult to hire individuals with experience in critical
minerals and materials processing. It is taking us upwards of 9
months to find qualified candidates for key positions. The lack
of a domestic supply chain has resulted in the erosion of our
talent pool.
Financing also remains a great barrier to commercialization
of production of processing facilities. The lack of a Federal
strategy for the development of material supply chains clouds
the importance of critical materials creating reluctance in the
part of investors. Financing new commercial facilities is
difficult for producers such as ours because it is unlikely
that we will secure off take agreements to reduce financing
risk. Investors and lenders require market visibility for our
products, but many of the end use markets that we would sell
into are still nascent in the United States such as electric
vehicles and other clean energy initiatives.
Existing commercialization programs such as section 1703
Loan Guarantee or the section 48C Advanced Manufacturing Tax
Credit did not help as neither contemplated the production of
critical materials as components for clean energy technologies.
We would ask that this committee consider strengthening the
legislative proposals to expand eligibility for component
material production under existing commercialization programs.
With that, thank you very much for the opportunity to
testify here today.
[The prepared statement of Mr. Erceg follows:]
Prepared Statement of Luka Erceg, President and CEO, Simbol Materials,
Pleasanton, CA
On S.383, S.421, and S.1113
Good afternoon. My name is Luka Erceg, and I am the President and
CEO of Simbol Materials. Thank you for the opportunity to speak with
you today regarding the important legislation under consideration by
this Committee. Simbol supports these three bills, which will drive
innovation, support job creation, and advance America's competitiveness
in the global clean energy economy.
Simbol is commercializing innovative, sustainable processes for the
domestic production of lithium (Li), manganese (Mn) and zinc (Zn). We
currently operate a demonstration plant in the Salton Sea region of
California, where we co-produce minerals from geothermal brines at an
existing geothermal power plant. Following power production, we
``borrow'' the brine for about 90 minutes to selectively extract the
targeted minerals. The brine is then reinjected into the ground. This
process has a smaller environmental footprint and cost profile than any
other method for producing these materials.
We are currently in the permitting process for the construction of
a full-scale production and processing facility. Upon completion, we
will be the only U.S. producer of manganese and electrolytic manganese
metal. We also expect to double U.S. production of lithium by 2012.
The U.S. government can drive investment by establishing a clear
definition for ``critical'' minerals and materials.
By any objective measure, both Li and Mn should be considered
``critical.'' As is the case with rare earth metals, this designation
is not due to scarcity in global supply, but rather due to the lack of
U.S. production.
Li is an essential component of advanced batteries for electric
vehicle and grid storage applications. The U.S. is approximately 76%
import dependent on Li, with most global production from salt flat
evaporation in South America and growing supply in China. While some
government studies--including the Department of Energy's (DOE) 2010
critical materials strategy--have labeled lithium as ``critical,''
other assessments have not included it.
Electrolytic manganese metal (EMM) is a fundamental input for
specialty steels for defense and commercial applications, and Mn
dioxide increasingly is emerging as one of the leading metal components
for electric vehicle battery cathode powders. The U.S. is 100% import
dependent on foreign sources of manganese ore, as well as electrolytic
manganese metal--95% of which is produced in China. Signaling U.S.
concern with foreign production and trade patterns, the U.S. Congress
three years ago passed anti-dumping legislation penalizing Chinese and
Australian Mn producers. Despite this, Mn was not included in the DOE's
strategy, although in April of this year the Defense Logistics Agency
identified it as one of the Department of Defense's top ten shortfall
materials.
These examples are not intended to serve as a criticism of any
agency, but rather as a demonstration of the need for clarity across
the U.S. government in defining what makes a material ``critical.''
The current legislative proposals delegate the activity of defining
a set of critical materials to specific federal agencies, with an
opportunity for review and updating. We are concerned that this
structure will force the government to evaluate a globally competitive
market through the rearview mirror. Any assessment that follows this
structure will reflect market conditions as they existed several years
ago, rather than market conditions today. Instead, a self-classifying
definition, which could be based on 1) use of specific materials in
industries that support strategic or policy priorities (e.g. advanced
batteries, wind turbines and specialty steels) and 2) the level of U.S.
production and processing, would provide real-time signals to industry.
Such a definition should apply across the entire federal government.
This will ensure that the government is not picking winners and losers
at a given moment in time, but rather structuring programs based on the
realities of the rapidly changing global marketplace.
A self-classifying definition would allow market participants to
quickly determine policy-makers' priorities without waiting potentially
years for agency review and update. A straightforward, clear definition
will immediately communicate to the market that designated materials
are critical to U.S. policy goals. This will rapidly drive private
investment to strategic federal priorities.
Federal support for research and development (R&D) is a powerful
driver of private investment in critical materials.
We strongly support the proposed legislative programs to develop
research, development and deployment activities for critical materials.
These programs will jump-start the development of a domestic supply
chain for the clean energy, defense and other strategic sectors in the
face of aggressive policy support for entrenched foreign producers.
The establishment of a new industry is inherently risky, and it
requires a concerted effort by both the public and private sectors. We
believe that federal support for basic research remains essential to
advancing our country's competitive position in the clean energy
economy. The Advanced Research Project Agency--Energy (ARPA-E) plays a
critical role in driving cutting-edge, game-changing technologies. In
addition, the DOE and other agencies play an important function in
supporting R&D efforts to develop and demonstrate technologies that
lower operating costs, allow access to new resources, and improve
quality and environmental performance.
Federal R&D support that assists firms in de-risking new
technologies, when coupled with commercial sector investments, send
loud signals to the market that encourage follow-on investing in areas
of policy interest. In the critical materials arena, these federal R&D
commitments are powerful drivers of private investment, and they
support the development of a competitive domestic supply chain for
electric vehicles and materials for defense applications.
For example, in 2009, DOE's Geothermal Technologies Program (GTP)
announced its intent to award Simbol a $3 million grant to demonstrate
its processes for competitive production of lithium, manganese and zinc
chemicals for energy storage applications. Since being awarded the
grant, we have grown our workforce from 16 to 40, and we will reach 60
by year-end. We also have leveraged those federal funds to raise
approximately $43 million in further capital--the majority of which was
committed prior to the actual delivery of the first grant dollar,
strongly demonstrating the investment signal provided by the
government's technology validation.
Financing risk remains the greatest barrier to commercialization of
production and processing facilities.
While basic R&D support is essential to restoring U.S. leadership
in mineral production technology, the most significant role for the
federal government is in helping overcome commercialization risk. This
Committee has heard a series of testimony in recent weeks and months
regarding the challenges associated with financing first commercial
facilities throughout the clean energy sector. This risk is arguably
even more pronounced for mineral producers like Simbol, which are not
able to secure offtake agreements to reduce financing risk.
While Simbol has been highly successful in raising private capital,
the investment required for a full-scale plant is significant. Private
investors require a demonstrated market for our product, but the
reality is that--at least here in the U.S.--we are selling into a
nascent industry. While growth projections for advanced batteries (and
associated Li and Mn consumption) are high, investors continue to hold
back, awaiting the emergence of downstream industry consumption for
electric vehicles and grid storage. Furthermore, the absence of a
federal strategy for the development of supply chains to support
priority policy areas causes confusion in the marketplace regarding the
importance of critical materials.
Federal support for commercialization will help us bridge this so-
called ``valley of death.'' In the same way that our GTP grant
attracted an initial round of private capital, we anticipate that
federal commercialization assistance would stimulate private investment
for the full-scale production facility. It is important to note that
mineral production facilities do not qualify for assistance under
existing commercialization programs. For example, neither the Section
1703 loan guarantee program nor the Section 48(c) advanced energy
manufacturing tax credit reaches sufficiently far back in the supply
chain to support mineral production or processing activities. The
current legislative proposals would be strengthened by adding
provisions to expand eligibility.
Building a domestic supply chain for critical materials will spur
domestic manufacturing and innovation throughout the clean energy
sector.
The development of a domestic supply chain for critical materials
will reduce the risk of supply disruption and mitigate exposure to
price spikes. (For example, Mn dependence has exposed DoD to price
spikes of up to 350% over 2003 levels.) However, the greatest benefit
of developing a domestic supply chain is bolstering our nation's
competitive position throughout the entire clean energy sector.
At every point in the supply chain, manufacturing drives
innovation. As a supply chain lengthens, each step is strengthened
through industry collaboration--which creates a more competitive
overall domestic industry. In the case of electric vehicles and grid
storage applications, critical materials are the cornerstone of the
supply chain. It is important to realize that production processes to
convert raw materials to usable products for downstream markets are
highly technology intensive. At Simbol, we have 8 PhDs and 3 MS degrees
on staff (representing 25% of our current workforce), all with
backgrounds in chemical engineering, electrochemistry and chemistry.
Our scientists and engineers are consistently finding innovative ways
to improve the quality of materials and to develop the next generation
of products. This is the case throughout the entire critical materials
industry, where highly skilled teams are consistently developing and
improving materials--to the benefit of our nation's clean energy,
defense, and industrial sectors.
Domestic innovation in critical materials also will drive workforce
growth. Because domestic production of these materials largely ended in
the 1970s, today it is inordinately difficult to hire individuals with
experience in Mn and Li processing. In fact, it is taking us up to 9
months to find qualified candidates for key positions at Simbol. Market
growth in the production and processing of critical materials will lead
to increased training of students in these fields, and subsequent
technology advancements through our university system.
Conclusion
The development of an industry for critical materials production
and processing is essential to the growth of our domestic clean energy
economy and our nation's energy security. I appreciate the Committee's
attention to this important set of issues, and I look forward to your
questions.
Senator Cantwell. Thank you very much for your testimony.
Next is Dr. Duclos. Thank you very much for joining us this
afternoon.
STATEMENT OF STEVEN J. DUCLOS, CHIEF SCIENTIST AND MANAGER,
MATERIAL SUSTAINABILITY, GE GLOBAL RESEARCH, NISKAYUNA, NY
Mr. Duclos. Madame Chair Cantwell and Ranking Member Risch,
and members of the committee, it's a privilege to share with
you GE's thoughts on how we manage shortages of materials
critical to our manufacturing and what steps the government can
take to help industry minimize the risk associated with these
shortages. This hearing addresses an issue that is critical to
the future well being of U.S. manufacturing for large and small
businesses alike. Without development of new supplies and
focused research in materials and manufacturing such supply
challenges could undermine efforts to meet the Nation's future
needs in energy, health care and transportation.
I'll focus on my remarks today on GE's critical mineral and
materials strategy and outline recommendations for how the
government can strengthen its support of industry in this area.
The materials in GE's products are comprised of 70 of the first
83 elements in the periodic table. Thousands of GE
manufacturing jobs are associated with products incorporating
rare Earth elements including energy efficient fluorescent
lighting, permanent magnets in wind turbines, compressor motors
for oil and gas, medical imaging equipment and encodings for
aviation engines and electrical generating gas turbines. As
Chief Scientist and Manager of Materials Sustainability of GE
Global Research, it's my job to understand the latest trends in
materials and to work with our businesses to manage our
material needs in a sustainable way.
To evaluate risk associated with materials shortages GE
uses a modification of the assessment tool developed by the
National Research Council in 2008. Risks are quantified by
element in 2 categories, price and supply risk and impact of
restricted supply to GE. These elements--those elements deemed
to have a high risk in both categories are identified as
materials needing further study and a detailed plan to mitigate
supply risks. For this analysis we use in house knowledge as
well as data from the U.S. Geological Survey.
There is a broad spectrum of solutions that can be
implemented to minimize the risk of those elements identified
as being at high risk. Those include No. 1, improvements in the
global supply chain including the development of alternate
sources and mines and for manufacturer's long term agreements
in development of strategic inventory of materials.
No. 2, improvements in material utilization in
manufacturing and reduction of manufacturing waste.
No. 3, development of recycling technologies that extract
at risk elements from both end of life products and
manufacturing end loss. This includes the design of products
that are more easily recycled and serviced.
No. 4, development of materials and systems technology that
either greatly reduce the use of at risk elements or eliminates
the need for the element all together.
Several examples of these are discussed in my written
testimony where GE has successfully taken this approach. These
include the replacement of helium with boron in neutron
detectors. The reduction by a factor of 2 of the Rhenium
content is super alloys for our jet engines, a development that
leveraged past research programs supported by DARPA, the Air
Force, Navy and NASA.
Finally No. 5, reassessment of the entire system. Often
more than one technology can address a customer's need. Each
will use a different subset of the Periodic Table. An example
is the development of energy efficient LED lighting
technologies as supported by the Department of Energy that
offer a 70 times reduction in the use of rare Earth elements
for lighting.
Attention needs to be played--paid to all of these
mitigation strategies. The shorter term sourcing and
manufacturing solutions are critical to bide time for the more
optimal recycling and material substitution solutions that tend
to be longer term, higher risk and require risk mitigation
strategies involving parallel paths. The government can help by
enabling public/private collaboration that provides both
materials understanding and resources that enable these
material substitution approaches.
Anticipated growth in the use of critical materials for
efficient energy and transportation technologies mandates that
we develop a comprehensive systems strategy in mitigating risk
to our domestic manufacturing sector. Accordingly I advocate 3
aspects within Federal policy regarding critical minerals and
materials.
First, enhance our Nation's ability to monitor, assess and
coordinate a response to identify critical minerals and
materials issues.
Second, support innovations in material substitutions and
manufacturing. Collaborative and precompetitive efforts between
academia, government laboratories and industry will help ensure
that manufacturing compatible solutions are available to avert
disruptions in U.S. manufacturing.
Third, adopt a comprehensive approach to developing
mitigation strategies outlined in this testimony: new material
sources, recycling technologies, manufacturing efficiencies,
alternate materials and new systems solutions.
Madame Chair Cantwell and members of the committee, thank
you. I look forward to answering your questions.
[The prepared statement of Mr. Duclos follows:]
Prepared Statement of Steven J. Duclos, Chief Scientist and Manager,
Material Sustainability, GE Global Research, Niskayuna, NY
Introduction
Chairman Cantwell, ranking member Risch, and members of the
Subcommittee, it is a privilege to share with you General Electric's
thoughts on how we manage shortages of precious materials and
commodities critical to our manufacturing operations and what steps the
Federal government can take to help industry minimize the risks
associated with these shortages.
Background
GE is an advanced technology, services, and finance company taking
on the world's toughest challenges. Operating in more than 100
countries with more than 300,000 employees, we are driving advanced
technology and product solutions in key industries such as energy,
water, transportation, aviation, and healthcare providing a cleaner,
more sustainable future for our nation and the world.
At the core of every GE product are the materials that make up that
product. To put GE's material usage in perspective, we use at least 70
of the first 83 elements listed in the Periodic Table of Elements. In
actual dollars, we spend $40 billion annually on materials. 10% of this
is for the direct purchase of metals and alloys. In the specific case
of the rare earth elements, GE uses rare earth minerals in the
production of energy efficient fluorescent lighting, in permanent
magnets for generators in our most advanced wind turbines, in
compressor motors for our Oil and Gas business, in our medical imaging
technologies, and in coatings for aircraft engines and power generation
turbines.
Because materials are so fundamental to everything we do as a
company, we are constantly watching, evaluating, and anticipating
supply changes with respect to materials that are vital to GE's
business interests. On the proactive side, we invest a great deal of
time and resources to develop new materials and processes that help
reduce our dependence on any given material and increase our
flexibility in product design choices.
We have more than 35,000 scientists and engineers working for GE in
the US and around the globe, with extensive expertise in materials
development, system design, and manufacturing. As Chief Scientist and
Manager of Material Sustainability at GE Global Research, it's my job
to understand the latest trends in materials and to help identify and
support new R&D projects with our businesses to manage our materials
needs in a sustainable way.
Without development of new supplies and more focused research in
materials and manufacturing, such supply challenges could seriously
undermine efforts to meet the nation's future needs in energy,
healthcare, and transportation. GE's strategy to address its materials
needs could easily serve as a framework for how the Federal government
can strengthen its support of academia, government, and industry in
this area.
GE's Evaluation of Material Risks
The process that GE uses to evaluate the risks associated with
material shortages is a modification of an assessment tool developed by
the National Research Council in 2008, and similar to an assessment
recently completed by the Department of Energy to evaluate critical
materials for energy technologies. In the GE analysis, risks are
quantified element by element in two categories: ``Price and Supply
Risk'', and ``Impact of a Restricted Supply on GE''. Those elements
deemed to have high risk in both categories are identified as materials
needing further study and a detailed plan to mitigate supply risks. The
``Price and Supply Risk'' category includes an assessment of demand and
supply dynamics, price volatility, geopolitics, and co-production. Here
we extensively use data from the US Geological Survey's Minerals
Information Team, as well as in-house knowledge of supply dynamics and
current and future uses of the element. The ``Impact to GE'' category
includes an assessment of our volume of usage compared to the world
supply, criticality to products, and impact on revenue of products
containing the element. We continue to work with researchers at Yale
University who are developing a more rigorous methodology for assessing
the criticality of metals.
Minimization of Material Risks
Once an element is identified as high risk, a comprehensive
strategy is developed to reduce this risk. Such a strategy can include
improvements in the supply chain, improvements in manufacturing
efficiency, as well as research and development into new materials and
recycling opportunities. Often, a combination of several of these may
need to be implemented.
Improvements in the global supply chain can involve the development
of alternate sources, including the support of new mines. Manufacturers
can also develop long-term supply agreements that allow suppliers a
better understanding of our future needs. In addition, for elements
that are environmentally stable, we can inventory materials in order to
mitigate shortterm supply issues.
Improvements in manufacturing technologies can also be developed.
In many cases where a manufacturing process was designed during a time
when the availability of a raw material was not a concern, alternate
processes can be developed and implemented that greatly improve its
material utilization. An example of this is the development of near-
net-shape manufacturing technologies that produce parts and products by
maximizing material utilization.
Another solution is the recycling of end-of-life products and
optimizing product design to enable such recycling. In addition,
development of recycling technology for the re-use of manufacturing
scrap can generate an important source of raw materials. Currently,
commodity elements such as Aluminum and Copper are extensively
recycled--extending this to critical materials can generate an
important source of these raw materials.
An optimal solution is to develop technology that either greatly
reduces the use of the at-risk element or eliminates the need for the
element altogether. While there are cases where the properties imparted
by the element are uniquely suitable to a particular application, I can
cite many examples where GE has been able to invent alternate
materials, or use already existing alternate materials to greatly
minimize our risk. At times this may require a redesign of the system
utilizing the material to compensate for the modified properties of the
substitute material. Let's look at a few illustrative recent examples.
The first involves Helium-3, a gaseous isotope of Helium used by GE
Energy's Reuter Stokes business in building neutron sensors for
detecting special nuclear materials at the nation's ports and borders.
The supply of Helium-3 has been diminishing since 2001 due to a
simultaneous increase in need for neutron detection for security, and
reduced availability as Helium-3 production has dwindled. GE addressed
this problem in two ways. The first was to develop the capability to
recover, purify and reuse the Helium-3 from detectors removed from
decommissioned equipment. The second was the accelerated development of
Boron-10 based detectors that eliminate the need for Helium-3 in
Radiation Portal Monitors. GE recently completed construction of a
facility in Twinsburg, Ohio to manufacture Boron-10 neutron detection
modules for use in Radiation Portal Monitors and other neutron
detection systems.
A second example involves Rhenium, an element used at several
percent in super alloys for high efficiency aircraft engines and
electricity generating turbines. Faced with a six-fold price increase
during a three-year stretch from 2005 to 2008 and concerns that its
supply would limit our ability to produce our engines, GE embarked on
multi-year research programs to develop the capability of recycling
manufacturing scrap and end-of-life components. A significant materials
development effort was also undertaken to develop and certify new
alloys that require only onehalf the amount of Rhenium, as well as no
Rhenium at all. This development leveraged past research and
development programs supported by DARPA, the Air Force, the Navy, and
NASA.
The Department of Defense supported qualification of our reduced
Rhenium engine components for their applications.
By developing alternate materials, we created greater design
flexibility that can be critical to overcoming material availability
constraints. Pursuing this path is not easy and presents significant
challenges that need to be addressed. Because the materials development
and certification process takes several years, executing these
solutions requires forecasting impending problems. For this reason,
having shorter term sourcing and manufacturing solutions is critical in
order to ``buy time'' for the longer-term solutions to come to
fruition. In addition, such material development projects tend to be
higher risk and require risk mitigation strategies and parallel paths.
The Federal Government can help by enabling public-private
collaborations that provide both the materials understanding and the
resources to attempt higher risk approaches. Both components are
required to increase our chances of success in minimizing the use of a
given element.
Another approach to minimizing the use of an element over the long
term is to assure that as much life as possible is obtained from the
parts and systems that contain these materials. Designing in
serviceability of such parts reduces the need for additional material
for replacement parts. The basic understanding of life-limiting
materials degradation mechanisms can be critical to extending the
useful life of parts, particularly those exposed to extreme conditions.
It is these parts that tend to be made of the most sophisticated
materials, often times containing scarce raw materials.
A complete solution often requires a reassessment of the entire
system that uses a raw material that is at risk. Often, more than one
technological approach can address a customer's need. Each of these
approaches will use a certain subset of the periodic table--and the
solution to the raw material constraint may involve using a new or
alternate technology. Efficient lighting systems provide an excellent
example of this type of approach. Linear fluorescent lamps use several
rare earth elements. In fact, they are one of the largest consumers of
Terbium, a rare earth element that along with Dysprosium is also used
to improve the performance of high-strength permanent magnets. Light
emitting diodes (LEDs), a new lighting technology whose development is
being supported by the Department of Energy, uses roughly one-
seventieth the amount of rare earth material per unit of luminosity,
and no Terbium. Organic light emitting diodes (OLEDs), an even more
advanced lighting technology, promises to use no rare earth elements at
all. In order to ``buy time'' for the LED and OLED technologies to
mature, optimization of rare earth usage in current fluorescent lamps
should be considered. This example shows how a systems approach can
minimize the risk of raw materials constraints.
In addition to high efficiency lighting, GE uses rare earth
elements in our medical imaging systems and in wind turbine generators.
Rare earth permanent magnets are a key technology in high power density
motors. These motors are vital to the nation's vision for the
electrification of transportation, including automobiles, aircraft,
locomotives, and large off-road vehicles. The anticipated growth in the
use of permanent magnets and other rare earth based materials for
efficient energy technologies mandates that we develop a broad base
solution to possible raw material shortages. One such solution would be
the development of permanent magnet materials that use significantly
less rare earth. GE is currently working on novel magnet processing
techniques using nano technology that could reduce rare earth
concentrations in permanent magnets by up to 80% in a project supported
by the Department of Energy's ARPA-E.
Recommendations
Based on our past experience I would like to emphasize the
following aspects that are important to consider when addressing
material constraints:
1) Early identification of the issue--technical development
of a complete solution can be hampered by not having the time
required to develop some of the longer term solutions.
2) Material understanding is critical--with a focus on those
elements identified as being at risk, the understanding of
materials and chemical sciences enable acceleration of the most
complete solutions around substitution and reuse/recycling.
Focused research on viable approaches to substitution and usage
minimization greatly increases the suite of options from which
solutions can be selected.
3) Each element is different and some problems are easier to
solve than others--typically a unique solution will be needed
for each element and each use of that element. While basic
understanding provides a foundation from which solutions can be
developed, it is important that each solution be compatible
with real life manufacturing and system design. A specific
elemental restriction can be easier to solve if it involves few
applications and has a greater flexibility of supply. Future
raw materials issues will likely have increased complexity as
they become based on global shortages of minerals that are more
broadly used throughout society.
Given increasing challenges around the sustainability of materials,
it will be critical for the Federal government to strengthen its
support of efforts to minimize the risks and issues associated with
material shortages. Based on the discussion above, we make the
following recommendations for the Federal government:
1) Given the need for early identification of future issues,
we recommend that the government enhance its ability to monitor
and assess industrial materials supply, both short term and
long term, as well as coordinate a response to identified
issues. Collaborative efforts between academia, government
laboratories, and industry will help ensure that manufacturing
compatible solutions are available to industry in time to avert
disruptions in US manufacturing.
2) Federal government support of materials, manufacturing,
and systems research will be critical to laying the foundation
upon which solutions are developed when risks to supplies of
critical minerals and materials are identified. These complex
problems will require collaborative involvement of academic and
government laboratories with direct involvement of industry to
ensure solutions are manufacturable. This includes educational
and workforce development that will be critical to building
industry's capability in these areas.
3) With global economic growth resulting in increased
pressure on material stocks, along with increased complexity of
the needed resolutions, it is imperative that comprehensive
action be taken on the solutions discussed in this testimony:
developing new materials sources, manufacturing efficiency,
recycling technologies, development of alternate materials, and
new systems solutions. This will require investment in long-
term and precompetitive research and development--and the
Federal government's support of these will be of increasing
criticality as the demand for raw materials grows globally.
Comments on S.383, S.421, and S.1113
GE believes legislation on the critical materials issue needs to be
comprehensive, and cover the source, manufacturing, recycling, and R&D
solutions discussed above. S.383 and S.1113 offer the most
comprehensive legislation to assess critical material needs, to
reinvigorate the domestic mining supply chain, manufacturing, and
research and development to mitigate risks arising from insufficient or
uncertain sources of supply. It is also critical to bolster education
within the mining, separations, engineering, and manufacturing
workforce. GE believes it is critical to emphasize long-term
innovation, as opposed to short-term stockpiling, in the critical
materials policy and strategy.
Conclusion
In closing, we believe that a comprehensive approach and sustained
level of investment from the Federal government in materials science
and manufacturing technologies is required to accelerate new material
breakthroughs that provide businesses with more flexibility and make us
less vulnerable to material shortages. Chairman Cantwell and members of
the subcommittee, thank you for your time and the opportunity to
provide our comments and recommendations.
Senator Cantwell. Thank you, Dr. Duclos. Thank you very
much for your testimony.
Mr. Caffarey, thank you for being here as well. After you
finish then we'll go to questions. Thank you very much for your
testimony.
STATEMENT OF MARK CAFFAREY, EXECUTIVE VICE PRESIDENT, UMICORE
USA, INC., RALEIGH, NC
Mr. Caffarey. Thank you, Madame Chair.
Madame Chair Cantwell, Ranking Member Risch and members of
the Committee, my name is Mark Caffarey and I'm Executive Vice
President of Umicore USA in Raleigh, North Carolina. Thank you
for the opportunity to testify before you today.
Umicore is a global materials technology company whose
annual sales of some $15 billion. Founded over 200 years ago,
Umicore has a long history in mining and metal smelting. In the
last 15 years alone we have transformed our operations by
developing a closed loop business model that provides more than
50 percent of the metals we transform into materials from our
own recycling, many of which qualify as critical materials in
the U.S. and other countries.
As the world's leading recycler of precious metals in 2010
alone Umicore recovered approximately $6 and a half billion in
metal values from discarded, end of life products and
industrial by-products. Because Umicore knows that in principle
metals can be infinitely recycled without losing any of their
properties. A key component of our business strategy is to
further increase the range of materials we derive from
recycling.
The 3 bills before the committee today all call upon the
Department of Energy to launch programs in the recycling of
critical materials. Because we at Umicore believe the recycling
of products containing critical materials is a central strategy
to securing access to those materials for the U.S., we support
these efforts and the focus in all 3 bills on research and
development. I will highlight 3 main points in my testimony
today.
First, the U.S. likely has the largest cache of critical
materials in the world. They can and should be recycled to
assure secure and ready access to the critical materials needed
for defense and civilian high tech products. Umicore supports
Federal efforts to achieve this through recycling.
Second, recovering metals from production scrap and waste
and from end of life products is much more efficient and needs
much less energy than production from primary resources. In
terms of productivity consider that for every ton of ore
containing the platinum group metals, mining will yield
approximately 5 grams of PGMs per ton. But by recycling
automotive catalysts we can harvest 2,000 grams PGMs per ton,
400 times more.
Our plant in North Carolina is already reclaiming over 2
million grams of PGMs from approximately one million recycled
automobiles every year. Our main recycling refining facility is
recovering 17 different metals from its varied feed. Aluminum
recycling achieves 90-95 percent energy savings which is
certainly something to aim for in critical materials. Recycling
is by far the more efficient energy way to produce critical
materials as long as the appropriate process flows are used.
Third, the economic growth benefits our domestic commitment
to the recycling of critical materials could be enormous.
Umicore itself employs 14,400 people worldwide with 1,500
highly skilled, highly paid employees at our precious metal and
battery recycling facility. The employment potential of a U.S.
critical materials recycling industry is significant in terms
of new job creation and job availability at varying skill
levels. The 4 stages of the recycling process are: collection,
dismantling, pre-treatment and refining of the pre-treated
materials into the final critical materials products which is
done at Umicore's recycling plants.
The economic growth potential is enormous. The recycling of
critical materials is an entire industry. One the U.S. has yet
to even begin building domestically.
These 3 bills call upon the Secretary of Energy to develop
an R and D program that includes recycling. Umicore believes
that the government support included in these bills is for
fundamental, pre-competitive research and development of
critical materials is appropriate and necessary. The bills
focused on R and D will be especially important in the subset
of critical materials known as rare Earths. Umicore is now
performing research on the possibility of recycling rare Earths
from various sources of end of life materials and evaluating
the possibility of stepping into funded projects where this can
be further addressed.
But proven technologies already exist to recycle many
critical materials beyond the rare Earth subset. Umicore has
the technology and expertise to do so. With respect to these
critical materials it is important for the U.S. to support the
development of a critical materials recycling industry built
upon those existing and proven technology.
Umicore believes that this committee should consider
provisions to require the Secretary to study and make
recommendations to the Congress on how to development of such
an industry could catalyze by demonstration, deployment and
financing programs in the Department of Energy or other Federal
agencies in any bill it advances to the Senate floor. Such a
study would contemplate how Federal policies could support the
development of private sector infrastructure for each of the 4
stages in the recycling process. So that the American system
for recycling critical materials is as robust as it should be.
Such a study could be a vital first step to achieving the
significant national security, energy efficiency and economic
growth benefits previously described.
Thank you for the opportunity to testify. I look forward to
answering any questions you may have.
[The prepared statement of Mr. Caffarey follows:]
Prepared Statement of Mark Caffarey, Executive Vice President of
Umicore USA, Inc., Raleigh, NC
Madam Chairman, Mr. Ranking Member, and Members of the Committee,
my name is Mark Caffarey, and I am an Executive Vice President at
Umicore USA. Thank you for the opportunity to testify before you today.
Umicore is a global materials technology company, with annual sales
of some $15 billion. We focus on areas where we can best use our
expertise in materials science, chemistry, metallurgy, and recycling.
We produce metals-based materials for: rechargeable batteries for
laptops, mobile phones and electric cars; emission control catalysts
for passenger cars; photovoltaic systems; and fuel cells. We are also
the world's leading recycler of precious metals.
The three bills before the Committee today--S. 383. S. 421, and S.
1113--all call upon the Department of Energy to launch programs in the
recycling of critical materials. I am testifying today to offer
Umicore's support for those programs, because we at Umicore believe the
recycling of products containing critical materials is a central
strategy to securing access to critical materials for the United
States.
Our belief is not based on theory, but rather on practice--our own
business experience. Umicore is more than 200 years old, with a history
in mining and metals smelting. In the last fifteen years we have
transformed our operations by developing a closed loop business model,
allowing us to secure from our recycling more than 50% of the metals we
transform into materials. Among those are three highlighted by DOE as
critical for clean energy technologies (indium, gallium, tellurium from
US DOE's Critical Materials Strategy, 2010) as well as Platinum Group
Metals added to the list of critical materials in other parts of the
world. In 2010 Umicore recovered approximately $6.5 billion in metals
value from discarded end-of-life products and industrial by-products.
Because Umicore knows that, in principle, metals can be infinitely
recycled without losing any of their properties, a key component of our
business strategy is to increase even further the range of materials we
derive from recycling.
As you consider the legislation before you, we urge to contemplate
the benefits of recycling in achieving the common objectives of these
three bills. First and most importantly, these bills all seek to ensure
that the United States has secure, ready, domestic access to critical
materials required for defense and civilian hightechnology products. If
the United States committed itself to meeting its critical materials
needs in large part through recycling, there is no nation on earth that
could match American resources. The United States has the largest
``aboveground'' mines of critical materials in the world, in the sense
that this country's supply of industrial scrap and end-of-life
automobiles, electronics, and electronic appliances--whether they are
in wreckers' yards, land-fills, or Americans' basements and attics--
can't be matched by any other nation. In essence, these ``above-ground
mines'' make the United States the Saudi Arabia of critical materials.
A well-developed recycling system could tap these mines for U.S.
critical materials security without limit.
Second, recovering metals from production scrap and waste and from
end-of-life products is much more efficient and needs much less energy
than production from primary resources. In terms of productivity,
consider that for every ton of gold-containing ore taken from the
ground through mining, approximately 5 grams of gold can be recovered.
Likewise for ore containing platinum group metals that is mined,
approximately 5 grams of PGM's can be recovered. (Platinum Group Metals
= Platinum, Palladium, Rhodium, Ruthenium, Osmium, and Iridium) On the
other hand, for every ton of mobile phones recycled, we can harvest
300-350 grams of gold, or more than 70 times the yield from mining. And
for every ton of automobile catalysts recycled, we can harvest 2,000
grams of PGMs--more than 400 times the yield from mining. Each year in
Maxton, North Carolina, Umicore Autocatalyst Recycling (UAR) reclaims
over 2 million grams of PGMs from approximately 1 million recycled
automobiles. The spent automotive catalyst is de-canned and sampled in
the North Carolina facility.
In terms of energy savings, take the production of aluminum, for
example. Recycling uses only 5-10% of the energy that would be required
for virgin aluminum production, representing a 90-95% energy savings.
For the precious metals (i.e. gold, silver and the the platinum group
metals) and for metals such as cobalt, indium or tellurium, the energy
savings achieved by state-of-the-art recycling are also significant. An
exact calculation of energy efficiency per metal is difficult to
achieve due to the heterogeneous nature of our feed and the numerous
metals extracted from the Umicore flowsheet. Our initial work indicates
that the annual production of metals from our recycling/refining
facility creates in total about 1/5th the CO2 emissions compared to
producing those same 17 metals via the primary route. Recycling is by
far the more energy efficient way to produce critical materials--as
long as the appropriate process chains are used.
Take an example of these energy efficiency savings from our own
organization. Umicore Battery Recycling has evaluated its recycling
process for rechargeable battery materials versus primary production of
these materials. Umicore's process avoids the mining of virgin
materials (at high energy cost), requires no additional energy-
consuming processing to achieve quality in the materials because of the
high purity of the materials in the used batteries, and finishes with a
highly energy-efficient recycling (smelter) technology. Umicore
estimates that the energy savings achieved by its battery recycling
process amounts to 50-70% compared to production from ores (depending
on the battery composition). Umicore's rechargeable battery recycling
plant will soon have a capacity for 7,000 tons of rechargeable
batteries (equivalent to 150,000 automobiles or 250 million mobile
devices).
Likewise, Umicore's recycling process for precious metals
containing industrial byproducts and End of Life materials avoids the
mining of virgin materials (at high energy cost) and allows the
recovery of 17 metals in all--two of them from the critical list
published by DOE: indium and tellurium. The rare earth elements present
in the automotive catalysts would be extremely difficult to recover due
to the chemical nature of those catalysts.
Third, and finally, the economic growth benefits of a domestic
commitment to the recycling of critical materials could be enormous.
Umicore itself employs 14,400 people world-wide, with 1500 highly-
skilled, highly paid employees at our largest plant, the precious
metals and battery recycling plant. The employment potential of a
robust U.S. critical materials recycling industry is significant,
involving not only many, many jobs but also jobs of varying skill
levels at each of four stages of the recycling process: (1) the
collection of discarded end-of-life products and scrap; (2) the
dismantling and sorting of products and the separation of components;
(3) the pre-treatment of the separated components; and (4) the refining
of the pre-treated materials into the final critical material products,
which is what we do at our recycling plants. Finally, there is all the
indirect employment that can be associated with the recycling
industry--IT, engineering, transportation, sales, administration, as
well as research at universities and research centers. The economic
growth potential is enormous, because the recycling of critical
materials is an entire industry, and the United States has not begun
yet to build one domestically.
The three bills before you call upon the Secretary of Energy to
develop a research and development program that includes recycling.
Again, Umicore's own experience offers testimony to the wisdom of those
provisions, having gone from a company obtaining metals from mining to
one obtaining metals mainly from industrial by-products and end-of-life
products using highly energy efficient, clean recycling technologies.
This strategic business decision has resulted in high levels of
innovation within the company and has stimulated research and
innovation via collaboration with many university partners and in-house
R&D centers. So Umicore believes that government support for
fundamental, precompetitive research and development for critical
materials--as contemplated in the three bills before you today--is
appropriate and necessary.
The focus on research and development in the three bills will be
especially important in the subset of critical materials known as the
``rare earths.'' Umicore is now performing research on the possibility
of recycling rare earths from various sources of end-of-life materials
and is evaluating the possibility of stepping into funded projects
where this can be further addressed.
But we also note that there are existing, proven technologies to
recycle many critical materials beyond the rare earth subset. So with
respect to these critical materials, we can focus now on how the nation
should support the development of a critical-materials recycling
industry built upon those existing, proven technologies like
Umicore's..
To that end, I note that Umicore has provided comments (attached)
to the Secretary of Energy on the proposed strategic plan for the
department to the effect that there should be a department-wide effort
to determine how DoE programs can support the development of such a
critical materials recycling industry.
But perhaps this Committee should also consider including in any
bill it forwards to the floor provisions that require the Secretary to
study and make recommendations to the Congress on how the development
of such an industry could be catalyzed by demonstration, deployment,
and financing programs in the Department of Energy or other federal
agencies. As noted above, the recycling process includes four critical
stages: collection, dismantling, pre-treatment, and then refining. Such
a study would contemplate how federal policies could support the
development of private-sector infrastructure for each of these stages
so that the American system for recycling critical materials is as
robust as it should be. Such a study could be a vital first step to
achieving the significant national security, energy-efficiency, and
economic growth benefits described above.
Thank you for the opportunity to testify before you today, and I
stand ready to answer any questions you may have.
Senator Cantwell. Thank you very much, Mr. Caffarey.
I'm going to start with you because you've just finished
your testimony here about, you know, the amount of domestic
resources and recycling. If we considered the above ground
mines, as you call them, then we are certainly endowed with a
lot of resource.
What do you think the barriers are to developing that
supply chain? Do you think that it's different than, what we're
doing with aluminum and gold recycling?
Mr. Caffarey. I believe I've tried to illustrate that the
whole recycling process has 4 parts to it. So definitely we're
very weak on the collection side. We're very weak on the pre-
treatment side.
The last step where we recover the different elements do
exist. We have systems in place for that already. But to get
the materials to those different facilities is the weak link in
the whole recycling process.
Senator Cantwell. What would you suggest as strategies to
try to deal with that barrier?
Mr. Caffarey. I believe that would be a study by the DOE or
the other Federal agencies to look as to what is the best way
to get to collect these products and keep them together and
pre-treat them the right way. Today we do not have the solution
as we concentrate on the efficient recycling of the different
end of life products.
Senator Cantwell. But I'm assuming there's no incentive
either in many of these recycling markets that have failed to
materialize so far because the collection is so disperse or no
one's come up with an economic model to benefit that recycler,
or because sometimes distance and transportation costs make it
uneconomical. So do you think that this is about incenting
recycling?
Mr. Caffarey. There are different ways to go about it. But
I think it's also a question of a lack of information. I
believe the automotive recyclers are well organized. But do
they know exactly all the different elements that an automobile
contains?
We mentioned rare Earth permanent magnets. The automobile
is a perfect example of containing a wide variety of permanent
magnets. But who exactly knows where they are or what is the
best way to collect them before the automotive is--an
automobile is shredded. Because once it's shredded and goes to
the steel in the streets the different elements are lost.
Senator Cantwell. OK. Mr. Duclos, you talked about the
combination approach, some efficiency, some new materials
research and recycling. I know that there are global companies
in my State like Boeing and others who are looking at these
markets. Which of the approaches do you support looking at,
when you look at this legislation, you know, reducing as
someone who is a manufacturer needing this material? What do
you like in those strategies?
Mr. Duclos. Yes. It's a--thanks for the question because
this is really a key part of the challenge. The fact is is that
the solution will be a mix of these 5 solutions and which one
in particular is chosen, which set of these solutions is chosen
depends on the element and it depends on the use of that
element.
There may be some cases where material substitution is more
easily done. In that case that's a fairly clean answer to the
question, involves doing some research in order to develop
those material substitutions. But in other cases material
substitutions may not be at all possible. In those cases you
would look to the recycling and the manufacturing efficiency to
make sure that we're being as efficient as possible in the use
of the material.
So it's really a mix.
Senator Cantwell. How important are we in this equation. By
that I mean, government. We asked the previous panel about an
assessment of where we are with these various materials. It's
clear we need to get more information from them.
Is this something the private sector can handle on its own?
Mr. Duclos. These challenges before us are great. When we
face an issue with the material we face having to choose among
those solutions. The fact is that there can be oftentimes
parallel paths. The real challenges at the beginning of this
process to do that, sort of, fundamental, precompetitive
understanding of materials and what materials, properties, can
give--what in a product, can help definitely lead to, you know,
which direction to go. That's where the Federal Government can
help.
In addition I think it's really important in terms of
Federal Government's help in collecting information. You know,
we will not publicly say, you know, which materials we think
are critical. However, we would be willing to give that
information in a proprietary sense.
We have with the Department of Energy, for example, in
their assessment. I think that's a really important thing that
the government can do is collect that information. So we can
see around corners and anticipate these challenges before they
happen so that we can implement this series of solutions.
Senator Cantwell. Thank you.
Mr. Price and Mr. Erceg, you both talked about this work
force issue which we heard on the previous panel as part of
this issue and in the manufacturing area or, you know, getting
people prepared because we've seen a decline in qualified
people that is critical for minerals materials. How might we
encourage people in this particular area? What do you think is
missing?
Mr. Price. In the university systems what stimulates
bringing people into the work force is typically the research
opportunities that are there to fund the graduate students and
the post-docs to work in those arenas. Those research
opportunities, I think, are one of the main ways of taking a
look at it. In that energy critical elements report we also
talked about having some centers of excellence in things like
rare Earth processing, element by element on the most critical
minerals that we're talking about.
Those kinds of centers are also a good way of approaching a
problem. So it would be a combination of research opportunities
that would help to train the graduate students and post-docs
and then these centers of excellence.
Senator Cantwell. Is----
Mr. Price. I believe the Department of Energy is moving in
that direction on the processing side of things. It really
falls more on the shoulders of the USGS on the geological
aspects.
Senator Cantwell. Interesting.
OK, Mr. Erceg?
Mr. Erceg. Thank you, Senator. I would also add that when,
you know, through R and D collaborations such as the DOE grant
programs, ARPA-E's innovation programs. Those are fantastic
programs that create collaborative opportunities for commercial
enterprises to work with universities. This has been a key
function of our grant program as well.
Once you can go to the universities and say, look, we've
got this grant opportunity. This is the commercial aspects we
see. It draws students to them.
You know, fortunately we've all been students before. It's
difficult to, you know, look at your career and say, wow,
there's no career opportunities if I study this. So it's a
fantastic window to show, you know, our great students and
science and engineering, you know, a path to commercialization.
Senator Cantwell. Thank you.
Senator Risch.
Senator Risch. Thank you, Madame Chairman.
Mr. Caffarey, I am interested in the recycling aspects of
this and is it your testimony that the economics are such that
the economics aren't an incentive to the industry to recycle
the products?
Mr. Caffarey. My testimony--thank you for the question,
Senator.
My testimony is to say that there is a mine that's readily
available and we're not organized to collect the different
materials because we have processes that can efficiently
recover critical elements. We have years of experience in
recovering the precious metals out of catalytic converter. We
have experience recovering precious metals and other metals out
of electronic scrap which is a large feed of our process.
We're looking into how to contribute to the rare Earth
question now a day with some new R and D in recycling. But I
believe the question is always how do we get the material
together.
Senator Risch. That's the question I was focusing on is the
financial aspects of it. Because, you know, we Americans are
really, really motivated when there's a profit involved. I
don't know how familiar you are with the automobile dismantling
business.
But I've got some friends in that business. I've watched it
done. I'm telling you they take everything out of there that
they can and separate it out that will make them more money. So
I'm a little surprised to hear you say that it's not being
done.
Mr. Caffarey. I didn't say it's not being done. But maybe
not everybody has the information. What's not essential when we
talk about magnets, not everybody knows that it contains rare
Earth. Maybe there's also a contribution to education, to
educate the industry, to educate the people that are involved
today at that level and maybe they will have ideas to, well,
before we shred it maybe we should be removing this part.
Then they can also contribute to say, well, you know, it's
very difficult. Maybe the automotive design should be done to
make it easier to recover. So then we're also talking about the
design for recycling to make it easier to be able to recover
those parts at end of life.
Senator Risch. That's why I was interested in the economics
of it. My experience is that the marketplace, if there's
dollars and cents involved, always figure it out before the
government does. Not only that, but they figure it out a whole
lot better.
That's why I was wondering about the economics of this
whether or not it's just simply that there isn't enough money
in it to motivate people to extricate these parts out of an end
of life product.
Mr. Caffarey. I can only share the experience that we have
and for all the materials that we process it's economical.
Senator Risch. Thank you. Thank you, Madame Chair.
Senator Cantwell. Senator Udall.
Senator Udall. Thank you, Madame Chair. Thank you to the
panel for taking the time. This is fascinating and important
both.
Mr. Caffarey, I'd like to turn to you initially. You point
out that the U.S. has, I think as you put it, the largest above
ground mines of critical----
Mr. Caffarey. Correct.
Senator Udall. Materials. That's an interesting way to
think of what you're doing. That our landfills make us the
Saudi Arabia of critical materials. This is interesting.
In addition, in light of the fact that I think a Chinese
official has been reported as saying, the Middle East has oil
and China has rare earths, what can we do and I know you've
talked a little bit about this up to this point to develop the
critical materials recycling industry in our country? Would you
just, if you would, think about what kind of job creation
potential it might hold.
Mr. Caffarey. At the 4 different stages of recycling you
have different levels of skills that are required. If you take
the collection point, that would be the lowest level, the
lowest skill level that's required. Then when you're doing the
final step where the transformation and recovery and recycling,
that's where you need the highest skill, the metallurgy
knowledge, the chemistry knowledge, the engineering.
But then after collection you have the pre-treatment of the
different materials. As far as trying to give as an example,
the automotive, we try, not be the best, but there are
different parts. The mobile phone is also a very complex item
where you have different elements.
If you want to recover selenium or tellurium out of the
telephone you're not going to be doing that just for that. You
have to have a system in place that allows you to gather the
mobile phones together and then have a process that will
recover all the different elements. It's, if you take one metal
as an individual example that might not justify the whole
recycling process. But when you put them all together then that
will justify the process.
So on the job level I can see definitely a greater number
of employment opportunities on the collection, people working
at the different State or even county or city levels and then
gathering a most efficient stream. The industry has still to be
created. There are some that are very economical or very
beneficial and that get cherry picked. We have to have a system
that can take care of all end of life materials.
Senator Udall. Did I read recently that tellurium has some
100 times the value per volume that the similar amount of gold
would have or am I not remembering correctly where I read that?
In other words the tellurium is quite valuable given its
rarity.
Mr. Caffarey. The tellurium has gained in value, yes. It's
not at the level of gold yet.
Senator Udall. OK.
Mr. Caffarey. But----
Senator Udall. Somebody was thinking in a wishful manner.
Mr. Caffarey. I believe so, yes.
Senator Udall. Let me continue the line of questioning
directed to you. You said that recovering metals from scrap and
waste is much more efficient and requires less energy than
getting them from ore. I think that's the thrust of what you've
been saying. I find that your example of the platinum group
metal is amazing that you get 400 times the yield from
recycling automotive catalysts than yield from mining those
same platinum group metals.
As you may know we've had a hearing in this Committee on
energy efficiency. Do you think that if more companies pursued
recycling from their material needs that we could reduce,
significantly perhaps, our manufacturing energy needs in our
country?
Mr. Caffarey. Yes, we're convinced of that.
Senator Udall. You are convinced?
Mr. Caffarey. We have recently started up at an industrial
level the recycling of rechargeable batteries. We have done
life cycle analysis to help us evaluate, well, what is the
value, what is the contribution. Using the elements that we
recover from recycling have reduced the need for energy by 70
percent. So comparing the use of recycled materials verses the
use of mined materials it requires less and it requires 70
percent less energy.
There's also a difference in the total CO2
emissions that is also a factor and that goes together with
that. So there's less CO2 emissions when using the
recycled materials verses using the mined materials.
Senator Udall. Those are powerful statistics. I know the
Chairwoman has a keen interest in this as well. It's in part
why she scheduled this hearing. But there's enormous
opportunity.
My time is beginning to expire. But I know we've talked a
lot about manufacturing in our country and the concerns that we
have that we're losing our manufacturing base. It strikes me
that what you've talked about and others on the panel when it
comes to recycling. It's a form of manufacturing, maybe a form
of, I don't know what the simple term would be, reverse
manufacturing or--but, I mean, this offers another way in which
we can take advantage of all the skill sets that Americans
have.
Mr. Caffarey. Definitely.
Senator Udall. I don't know if you would rebut that way of
thinking about what you're doing and others are doing, but it
strikes me that this is a form of manufacturing.
Mr. Caffarey. Yes. Your raw material is just nothing that
you get out of the ground. Yes. Above ground mine like you
mentioned.
Senator Udall. Yes, there was one keen observer of our
energy policy who said, if you want to find more oil you ought
to drill below Detroit. The point that was being made was by
creating more efficient automobiles and providing that option
to the American public to buy more efficient automobiles you're
in fact finding more oil.
It's a concept, I think, we can apply to a lot of other
areas in America. As we become more lean, more efficient with
our use of energy and therefore, I think, more secure.
Madame Chair, thank you for, again, holding the hearing on
this very, very important topic.
Senator Cantwell. Thank you, Senator Udall. Thanks for
introducing your legislation.
I just had one follow up. Dr. Price, you talked about
Centers of Excellence. Are there any centers that exist now and
where would you see that kind of collaboration? How would that
manifest itself?
Mr. Price. As Mr. Sandalow said in his testimony or in
response, there is a rare Earth element center of excellence at
Ames, Iowa. That's the only one that I'm aware of that really
focuses on a specific group of elements. They've been doing
research for many years on the processing of rare Earth
elements.
That stands as an example of what our committee was
recommending.
Senator Cantwell. Processing. Processing, meaning?
Mr. Price. The big problem with rare Earths is that they're
chemically very similar. To separate them for the individual
uses, if you want neodymium, you have to separate it from the
other rare Earth elements. The process for doing that is an
area fertile for continued research.
When it gets into the recycling issues, separating then the
rare Earth from the other materials, if you wanted to separate
the neodymium from iron, neodymium boron magnets, there's
research that's needed to do that.
Senator Cantwell. How do you think we should look at this
right now in the context of that particular center? The
challenge that's in front of us? Particularly this, you know,
relationship between, you know, centers of excellence in my
mind are a combination with a little government resource of
academia and the private sector business enterprise working
together on joint collaborative--on a collaborative approach
for solutions.
Given the challenge that we're facing in becoming more
aggressive, pursuing centers of excellence around particular
areas of rare Earth minerals? Is Ames enough? What else do we
need to do?
Mr. Price. Ames is a good start on the rare Earth side of
things. They do not, however, focus very much on the geological
aspects of it. Their part of it is looking at the, more of the,
downstream processing and supply sides of things.
NSF has very good models of centers that are competitive in
a peer reviewed manner. DOE is talking about various hubs of
excellence and this could easily fall under their approach to
that problem.
Senator Cantwell. I'm not sure I'm following you.
Mr. Price. That by having programs that are peer reviewed
by the scientific community such that we're getting the very
best of the research opportunities is generally the best way to
go with these sorts of centers.
Senator Cantwell. OK. But again, you mean on this specific
materials and their usage.
Mr. Price. Yes.
Senator Cantwell. Or potential usage.
Mr. Price. Yes.
Senator Cantwell. When you said geological earlier,
obviously the dynamics are changing, they're constantly
changing. In the Northwest, these are big aerospace
manufacturer and they consider composites. They consider
alloys. They consider future materials back and forth. You
know, these are big decisions.
So before we go opening up mining all over again, we
obviously want a lot of expertise on where the future is going
with these materials. So I would think that if we needed more
centers of excellence it would be more in that area, less in
the geological area. So that's what I'm trying to have you help
me understand your point.
Mr. Price. Yes. Rare Earth is a great example. There are
only 2 really big deposits in the world that have been
contributing a whole lot to the rare Earth supply, one big
deposit in China and then the Mountain Pass deposit in
California. There are a number of other rare Earth deposits
throughout the world none of which have been supplying material
at the levels that those 2 had.
There's a lot of opportunity for understanding how to
extract the rare Earth elements from those different types of
deposits. They occur in different minerals. The one in
California and the one in China are both in rare Earth
fluorocarbonates that have been relatively easy to process. But
some of the other rare Earth deposits throughout the world are
in different minerals that have challenges in terms of
extraction.
The fact that there are so few deposits really is a fertile
area for the geological aspects. We can easily ask the question
why aren't we finding more? There may well be other rare Earth
deposits that are out there that need to be looked at
seriously.
The USGS did its assessment. It was sort of off from the
basic literature that's out there. They looked at what the rare
Earth situation is like in the U.S. But they actually missed a
number of deposits that we know about that could be the long
term resources. But they're in some cases, different minerals
that haven't been looked at all that seriously.
So it would require then a combination of that sort of
geological knowledge of what's out there, what some of these
potential resources may be, then working with the process
engineers, metallurgists, extract the metallurgists to try to
figure out how do we best get those rare Earths out of those
minerals. Then the further downstream aspect certainly the
recycling part of it is a big piece as well.
So it's a combination of----
Senator Cantwell. Thank you. That's helpful.
So what is an example of someplace where we haven't been
looking on another rare Earth or I mean another extraction that
we haven't been looking at?
Mr. Price. A good example there might be tellurium. Right
now the world's supply of tellurium is coming primarily from a
certain way of processing copper ores. We actually don't know
all that well where all the tellurium is in those copper ores.
So there's research that's beginning to look into those issues.
But we do know that certain types of or certain processes
are extracting the tellurium. It comes, these days, from the
sulfide ores that are characteristic of the big copper deposits
in Chile and Peru and Arizona. Utah is another big producer.
Those copper ores have the tellurium, presumably, in with
the copper minerals themselves. That's where it's being
collected today. In Arizona we process a lot of those copper
minerals today using a different technique that is basically
getting none of the tellurium.
So there's a big issue of well, we know there's tellurium
in those deposits. We're not extracting it. Can we do more to
understand how to extract it from that process?
Senator Cantwell. Just for the record, what would we do
with tellurium? What's its use?
Mr. Price. The big issue with tellurium these days in this
energy critical arena has been that it's one of the preferred
elements used in thin film photovoltaics. Cadmium telluride
turns out to be one of the best approaches to thin film
photovoltaics for solar panels.
Senator Cantwell. This would be a key part of that
manufacturing process?
Mr. Price. That's correct.
Senator Cantwell. Thank you.
Thank you all. I'm sure we could go on with this expertise
of the panel. We thank you for your testimony today. I'm sure
that if members have questions we'll follow up for the record.
Again, we'll keep consulting with you as we move forward on
this legislative process. Thank you all very much. The hearing
is adjourned.
[Whereupon, at 4:28 p.m., the hearing was adjourned.]
APPENDIXES
----------
Appendix I
Responses to Additional Questions
----------
Response of Jonathan G. Price to Question From Senator Bingaman
Question 1. The most fundamental question to consider today is how
we should go about determining exactly which minerals and materials are
critical? The National Academy of Science recommended a method in their
2008 study whereby that determination can be made-this seems like a
good starting point, but can we make a more focused definition of which
materials are critical for energy technologies? How can we make sure
that every mineral or material under the sun is not considered to be
``critical''?
Answer. The 2011 study on Energy Critical Elements: Securing
Materials for Emerging Technologies by the American Physical Society's
Panel on Public Affairs and the Materials Research Society, which is
available at http://www.aps.org/policy/reports/popa-reports/
loader.cfm?csModule=security/getfile&PageID=236337 , defined the term
``energy-critical element'' (ECE) as ``a class of chemical elements
that currently appear critical to one or more new, energy-related
technologies. A shortage of these elements would significantly inhibit
large-scale deployment, which could otherwise be capable of
transforming the way we produce, transmit, store, or conserve energy.
We reserve the term ECE for chemical elements that have not been widely
extracted, traded, or utilized in the past and are, therefore, not the
focus of well-established and relatively stable markets.'' The study
identifies several elements that we consider ``possible'' ECEs.
Although our list of ECEs is not exhaustive, and others could
justifiably be added, this approach is good to follow in setting
priorities for data collection, analysis, research, development, and
workforce building by the federal government.
The 2008 National Academy of Sciences report offered an additional
approach that can further narrow the list of priority elements. That
study did not focus on energy technologies; using that approach alone
could yield a larger number of elements needing study than would result
from a combined approach that also focused on ECEs.
The 2011 American Physical Society report did recommend that ``the
federal government should regularly survey emerging energy technologies
and the supply chain for elements throughout the periodic table with
the aim of identifying critical applications, as well as potential
shortfalls.'' This should help the United States be prepared for
potential shortfalls in availability. As an example, beryllium, which
is not currently considered an ECE, but is critical for many defense-
and space-related technologies, in recent years has been produced from
only one mine in the United States. That mine supplies much of the
beryllium used throughout the world, such that other countries consider
beryllium a critical element. Our federal government should be
evaluating the domestic and global availability of beryllium on a
regular basis. The U.S. Geological Survey (USGS) produced a fine
document in 1973, titled United States Mineral Resources (USGS
Professional Paper 820, 722 pages), which briefly evaluated the
potential for domestic as well as international supplies of many of the
elements in the periodic table. An update of that document is long
overdue. In my opinion, it should be updated at least every ten years,
with more focus paid to those elements that are considered critical for
energy technologies, defense, and domestic economic development.
Responses of Jonathan G. Price to Questions From Senator Coons
Question 1. As the state geologist of Nevada, one of the most
resource-rich states in the country, how would you characterize the
existing state of geological knowledge about critical materials such as
REE deposits compared to better understood deposit types such as
porphyry Cu or epithermal Au?
Answer. Because there have been far fewer scientific studies of
rare earth element deposits (and many of the other critical minerals)
than of the types of deposits that host major resources for copper and
gold, we lack the understanding that is needed to explore for the new
types of resources that will surely be found in the future. We need
descriptive studies of known deposits as well as process-oriented
studies on the geochemistry and mineralogy of the critical elements, so
that we can predict the occurrence of new types of deposits that
currently are not recognized in today's mineral-resource assessments.
There are many examples of how lack of knowledge of new deposit types
(e.g., Carlin-type gold deposits and Olympic Dam-type iron oxide-
copper-gold deposits) leads to gross underestimation of resource
potential.
Question 2. Is geologic mapping adequately supported in the USA to
allow accurate estimates of resource availability?
Answer. No. The National Cooperative Geologic Mapping Program (in
the Department of Interior-USGS budget) is funded well below the level
that the Senate and House have authorized. The STATEMAP portion of the
program leverages federal and state dollars, as does the EDMAP portion
of the program, which supports training of the next generation of
geologic mappers. These maps are integral to not only resource
assessment but also to conscientious, environmentally responsible
development of those resources.
Question 3. How could state geologists contribute to federal
efforts to better understand and develop deposits of critical minerals
and materials?
Answer. There are several opportunities for state geological
surveys to work with the federal government in this regard. The USGS
has four programs that are particularly relevant: (1) the external
grants portion of the USGS Minerals Program, (2) the National
Cooperative Geologic Mapping Program, (3) the National Geological and
Geophysical Data Preservation Program, and (4) Minerals Information. As
the Department of Energy focuses on specific energy-critical elements,
there also will be opportunities for DOE to work with state geological
surveys.
Because the USGS does not have the breadth of expertise that is
needed to understand the processes that form the wide variety of ore
deposits or to assess the potential for new discoveries both
domestically and internationally, the USGS Minerals Program needs to
engage the knowledge of experts in state geological surveys,
universities, and industry in this work. A significant external grants
program (on the order of 20% of the Minerals Program budget, as is the
case in the USGS Earthquake Hazards Program) would greatly improve the
effectiveness of the Minerals Program.
The National Cooperative Geologic Mapping Program is an excellent
approach to engaging state geological surveys in providing the
geological framework necessary for both discovery and development of
mineral deposits. Geologic maps are needed to determine how the mineral
deposits within a given area formed, where undiscovered deposits are
most likely to occur, what environmental consequences there may be to
development of the deposits, how best to protect groundwater and other
resources during development, and how to ensure effective reclamation
and post-mining land use.
The National Geological and Geophysical Data Preservation Program
in the USGS got a modest start in response to a 2002 National Academy
of Sciences study on the need for geoscience data preservation
(Geoscience Data and Collections--National Resources in Peril). This
program includes information on how to gain access to samples that are
curated by state geological surveys. Much more could be done to improve
the information that the USGS needs for its assessments of domestic
mineral resources. Many state geological surveys have archives of
samples and data from drilling of water wells, mineral-exploration
wells, and energy-exploration wells, all of which are relevant to
mineral-resource assessments and future development.
The responsibility of monitoring mineral production in the U.S., in
the context of worldwide production, was moved to the USGS when the
U.S. Bureau of Mines was closed in 1996. Although memoranda of
understanding continue to be signed by state geological surveys and the
USGS for collaboration on collection of statistics, there is no longer
funding to assure that the best data are collected by the federal
government. The U.S. Bureau of Mines formerly had officers stationed in
major mineral-producing states and foreign countries, but that funding
disappeared shortly before the responsibility of collecting mineral
information was given to the USGS.
The Department of Energy is currently working with state geological
surveys on building a National Geothermal Data System. The states are
formatting their geothermal-relevant data in a nationally consistent
manner. Some of these data sets are also relevant to mineral resources,
and a similar DOE-state cooperative effort could be undertaken with a
focus on energy-critical elements. Coordination between the USGS
Minerals Program, the USGS's National Geological and Geophysical Data
Preservation Program, and DOE's work is essential to avoid duplication
of effort. The states are often in a good position to facilitate
coordination among federal agencies that share interests in maintaining
high-quality data on mineral and energy resources within the states.
______
Response of Luka Erceg to Question From Senator Bingaman
Question 1. The most fundamental question to consider today is how
we should go about determining exactly which minerals and materials are
critical? The National Academy of Science recommended a method in their
2008 study whereby that determination can be made-this seems like a
good starting point, but can we make a more focused definition of which
materials are critical for energy technologies? How can we make sure
that every mineral or material under the sun is not considered to be
``critical''?
Answer. Mr. Chairman, you have pinpointed the most fundamental
issue in this debate. The National Academy of Science (NAS) defines
criticality based on two parameters: importance in use and exposure to
supply disruption. While we believe that the NAS report is the most
comprehensive government examination of these issues to date and we
largely agree with these parameters, we are concerned that they fail to
sufficiently capture the fundamental importance of U.S. production.
Building a domestic supply chain for critical materials not only
alleviates potential supply disruptions, but it also supports domestic
innovation and job creation.
As I stated in my testimony, manufacturing drives innovation at
every point in the supply chain. As a supply chain lengthens, each step
is strengthened through industry collaboration--which creates a more
competitive overall domestic industry. In the case of electric vehicles
and grid storage applications, critical materials are the cornerstone
of the supply chain. Developing domestic production and processing
capabilities will not only drive job creation in those industries but
also will drive innovation and increase competitiveness throughout the
entire supply chain.
For this reason, the concept of domestic production should be built
into the definition of critical materials. To avoid the issue you
appropriately raise of potentially designating an inordinate number of
materials as ``critical,'' we should only consider criticality for
materials that support strategic energy and defense priorities.
Responses of Luka Erceg to Questions From Senator Udall
Question 1. In your testimony you mention a ``self-classifying''
definition for criticality. Can you explain this more? What does this
mean and how would it work?
Answer. The market for critical materials is dynamic and vibrant,
changing and evolving constantly. Investment decisions are being made
in real time. While current legislative proposals establish thoughtful
structures for federal agencies to determine what materials are
``critical,'' these processes are inherently backward-looking,
examining a market that existed months or years previously.
Although these processes are useful, the federal government can
more directly and quickly drive private investment in priority mineral
production and processing activities by establishing a clear, self-
classifying definition. By establishing a clear definition that can
immediately be interpreted by the marketplace, Congress will accelerate
the development of critical mineral and material resources.
We recommend a definition that considers two factors: 1) importance
for strategic energy and defense priorities and 2) degree of U.S.
import reliance for ore and processed materials.
Question 2. It looks as though you would include the level of U.S.
production as criteria for criticality. As you know there are several
mineral resources that we do not have in the U.S. and we are 100%
reliant on imports. Does this mean those materials would be deemed
critical under the self-classification even if they have stable supply
chains? In other words, would U.S. resources be necessary to keep a
mineral off the list of critical minerals under the self-classifying
type of definition?
Answer. Yes, we believe that if the U.S. is 100% import reliant on
a mineral and it is used in an area of strategic energy and defense
priorities, it should be deemed critical.
We believe that two criteria should be considered in determining
criticality: 1) importance for strategic energy and defense priorities
and 2) degree of U.S. import reliance for ore and processed materials.
This definition recognizes the importance of building a domestic
supply chain in support of driving domestic innovation and
competitiveness throughout the electric vehicle and grid storage
industries.
______
Response of Steven J. Duclos to Question From Senator Bingaman
Question 1. The most fundamental question to consider today is how
we should go about determining exactly which minerals and materials are
critical? The National Academy of Science recommended a method in their
2008 study whereby that determination can be made-this seems like a
good starting point, but can we make a more focused definition of which
materials are critical for energy technologies? How can we make sure
that every mineral or material under the sun is not considered to be
``critical''?
Answer. It is important to prioritize the criticality of raw
materials and the elements contained in those raw materials, in order
to focus risk mitigation efforts on those materials and elements that
are most at risk. To this end GE has used a methodology similar to that
developed by the National Academy of Sciences, which quantitatively
assesses the ``Supply and Demand Risk'' and the ``Importance to GE''.
If an element is found to be high on both scales it is considered to be
``critical'' and in need of a detailed plan for mitigation of supply
risks. This approach can be modified for a certain area of concern,
such as ``energy technologies'' by modifying the assessment of the
second factor to ``Importance to Energy Technologies''. The ``Supply
and Demand Risk'' factor can be made quantitative by following either
the Academy of Sciences approach, or with the approach being developed
by Prof. Thomas Graedel at Yale University, which uses established
economic and geopolitical indices to evaluate this parameter. As an
example, the criticality to energy technologies can be quantified by
the amount of usage in energy technologies and an assessment of the
criticality of the usage in those technologies. The Department of
Energy has done such an analysis in late 2010 which determined that 5
rare earth elements (Y, Dy, Nd, Tb, and Eu) and 1 non-rare earth
element (In) were critical to renewable energy technologies. This
number of at risk elements is consistent with the analysis that GE did
across its business segments. These examples demonstrate that
methodologies do exist that quantify, prioritize, and reduce the number
of elements that need further attention.
Response of Steven J. Duclos to Question From Senator Coons
Question 1. GE is known for its innovative utilization of rhenium.
A recent large discovery of molybdenum and rhenium in Australia (Merlin
zone of Mt. Dore deposit, Queensland) may dramatically change the
economic and resource picture for rhenium. How does GE stay abreast of
such geologic developments and how would dramatic changes in rhenium
availability change your business model?
Answer. Advancement of materials technology is a key part of
continued improvement in advanced gas turbine engines for aviation and
ground-based energy production. Rhenium has been one of the important
elements in GE achieving progress in engine technology since it is a
strengthener of nickel-based superalloys. GE recognizes the importance
of Rhenium, which is why it has been our policy to conserve this
material. Therefore, GE has continued to seek alternatives for future
product development and application.
GE stays abreast of developments in Rhenium in a variety of ways.
First, we constantly seek information on Rhenium and other materials
through a variety of publications and outlets. The news of new Rhenium
discoveries has been quickly publicized, and we are alert to the
quantity and availability of the newly discovered resources. Second, GE
attempts to create and maintain relationships with mining, processing,
and researchers in the materials industry for all materials including
Rhenium. Third, GE maintains an independent in-house materials research
organization to identify and assess new materials for our aviation and
energy products. All of this information is used to help develop our
strategy on the application of advanced materials to our products.
Dramatic increases in the availability of Re supply can reduce cost
and increase design flexibility of some aviation products while
dramatic decreases in availability could not only raise cost but
decrease design flexibility of some aviation products. We believe that
Re is an important element and that we should not consume any more of
it than absolutely needed. GE has developed alloys with reduced Re and
no Re that have been used to replace existing products with higher Re
containing alloys in current applications. In addition, GE reclaims Re
from chip grindings and recycles Re-containing alloys as a key part of
our strategy. GE will continue to conduct research on advanced
materials that require little or no Rhenium to ensure that we have the
most overall effective solutions to our future advanced engine
products.
______
Response of Mark Caffarey to Question From Senator Bingaman
Question 1. The most fundamental question to consider today is how
we should go about determining exactly which minerals and materials are
critical? The National Academy of Science recommended a method in their
2008 study whereby that determination can be made-this seems like a
good starting point, but can we make a more focused definition of which
materials are critical for energy technologies? How can we make sure
that every mineral or material under the sun is not considered to be
``critical''?
Answer. There have been a number of studies on what constitutes a
``critical material'' beginning with the NSF study in 2008 that is
referenced by Senator Bingaman. Additional work has been done by
others, including methodology studies and proposals shown in ``Critical
raw materials for the EU'' \1\published June 2010 by the European
Commission's Directorate General Enterprise and Industry. While their
work was directed at the European situation and to non-energy
materials, it offers another outlook on assessment. Their three
``indicators'' for criticality were economic importance, supply risk
and environmental country risk. Included in the assessments are the
extent to which a material can be substituted and how much of the
material demand can be met by recycling.
---------------------------------------------------------------------------
\1\ ``Critical raw materials for the EU'' published June 2010 by
the European Commission's Directorate General Enterprise and Industry,
Raw Materials Supply Group. Technical input: Fraunhofer Institute, Bio
Intelligence. http://ec.europa.eu/enterprise/policies/rawmaterials/
documents/index--en.htm
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The same general categories of assessment are used in ``Energy
Critical Elements: Securing Materials for Emerging Technologies''\2\
wherein sufficient supply is of utmost importance and demand is still
to be determined as R&D and markets move forward.
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\2\ ``Energy Critical Elements: Securing Materials for Emerging
Technologies'' published March 2011 by APS (American Physical Society)
and MRS (Materials Research Society).
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From this very brief summary it is clear that most approaches are,
in principle, similar. And in looking at the findings of the various
reports mentioned here, whether for energy or non-energy applications,
there are many overlaps in the materials found to be critical.
Differences seem to come less from different methodological approaches
than from different frame conditions/priorities in the country which
conducted the ssessment. Therefore Umicore cannot recommend any
specific methodology but proposes to simply start from the good work
that already is available.
In any event, the list of critical materials is not a static one
but one that will change, grow, shrink depending on a number of
factors. There will be new and evolving technologies to consider. Is
the material readily available and easily mined? Is it present
underground but also in urban mines and landfills? Is it a by-product
of other metal(s) and what is its concentration in that metal? Can it
be extracted in that case in an economically appropriate way? Are there
end products containing the material that are being collected and
recycled? What is the concentration of the material in those end
products and is it easily extracted?
The provisions in S.1113 and S.383 for tracking of critical
materials supply and performing R&D to strengthen supply of those
materials through recycling and more efficient use are a step in the
right direction. Supporting the work of DOE and USGS is necessary in
this context.
Responses of Mark Caffarey to Questions From Senator Udall
Question 1. You mentioned that for the last 15 years your company
has been working on a ``closed loop business'' model, meaning you used
recycled base materials. What drove your company to pursue this
business model? What were the biggest incentives and what were the
biggest obstacles to reaching your goals in this area?
Answer.
Drivers for Umicore to follow closed loop model:
--Business driven--Based on our long and deep expertise in
metallurgy, chemistry and metal markets/application areas,
we knew we could build on key strengths which make us very
competitive in the recycling field. In fact, our recycling
activities are in a Business Group that is a profit center
within Umicore. Umicore has proven that sophisticated
recycling technology provides not only ecological
advantages but is a profitable business if conducted in the
right way.
--Strategic--In the 1990s Umicore decided to transform itself from
a mining and metallurgy company to a materials technology
company and in the years since we have achieved that,
developing downstream activities into leading global
positions (both by internal growth and acquisition). The
closed loop approach for us is hence an important way to
secure our own raw material supply and get access to the
precious and special metals we need to manufacture our
products. It shows that vertical integration to secure the
supply base cannot only be achieved by investing in mining
activities but also in pushing the recycling. Furthermore,
the closed loop approach allows us closer relationships
with many of our customers to whom we supply our products
and for whom we recycle later on, either for return of more
product to them or for payment of metal content.
Incentives--The strategic fit in Umicore's sustainability
objectives and the business opportunities.
Obstacles--Transforming a traditional mining company into a
sustainability focused material technologies company is not an
easy move and is not achieved overnight.
Internally it means adapting operational and functional structures
and adjusting the mindsets of our workforce. Externally we are often
confronted with difficult conditions in the recycling business, meaning
that not all companies/countries are able to compete equally. Issues in
this context are illegal exports of end-of-life materials,
(environmentally) substandard treatment processes at some market
participants, possible preferential treatment of imports and exports in
some places and often poor general transparency in recycling markets.
Question 2. You mentioned in your testimony that there are 4 major
steps in the recycling process: collection, dismantling, pretreatment
and refinement. I have been told steps 1 and 2 occur more in the
European Union than here in the United States. If this is the case, how
was that capability built up? How do collection and dismantling in the
EU?
Answer. Steps 1-3 (collection, dismantling, pretreatment) occur
both in the United States and in Europe. Europe, however, has developed
regulations that have lead to higher volumes of electronic scrap,
automotive catalysts and batteries being collected than is the case in
the U.S. This comes from legislative direction on targeted volumes for
collection and recycling. One example is the EU Battery Directive*
which requires that by 2012, 25% of all batteries sold in the European
Union must be collected and recycled. That percentage increases to 45%
by 2016.
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* This information has been retained in subcommittee files.
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Without collection in significant volumes, steps 2, 3 and 4 in the
recycling process may not provide an economically viable business.
By comparison, in North America, the Rechargeable Battery Recycling
Corporation (a non-profit set up by battery manufacturers and suppliers
into North America) is the only nationwide collection organization for
the consumer batteries of all types. A sorting and preparation step
allows the organization to direct the different battery chemistries to
the most effective recycling tool, whether in North America or Europe.
Even with an extensive network of over 30,000 collection points, RBRC
collects just over 10% of the batteries sold into this market.
Typically the first three steps in the recycling process should
take place in the region where the materials arrive at their end of
life. Dismantling and pretreatment are usually combined at the same
facility and can include various combinations of manual and mechanical
processes. These can differ by materials involved but also by operators
or regional traditions. There are cases of the scrap being exported to
countries where less sophisticated dismantling and pretreatment methods
are used. It is often the case in those circumstances that yield is
very poor and workers' health and safety are compromised. As long as
the end-of-life products stay in the recycling chain that can recover
the most critical materials and recover them most efficiently and with
the least environmental impact, the value chain is maximized.
For complex, precious metal bearing materials such as circuit
boards, automotive catalysts or mobile phones, the refining is driven
by economics (technical sophistication and economies of scale). Umicore
is a leading refiner and plays a significant role not only in Europe,
but globally. The principal recycling chain in Europe for precious
metals containing products is described in the attached article.\3\
Please note that while the basic information in this article continues
to be accurate, the article was written in 2006 and some of the
quantities shown have since grown.
---------------------------------------------------------------------------
\3\ ``Recycling of Electronic Scrap at Umicore's Integrated Metals
Smelter and Refinery'' Author: Christian Hagelukenken, Umicore.
Published in ``World of Metallurgy''--ERZMETALL 59 (2006) No. 3
---------------------------------------------------------------------------
Our precious metals refinery as well as our rechargeable battery
recycling facility receive feed from all parts of the world, including
North America, Australia and Asia, in order to achieve economies of
scale.
One more example for the current situation in North America: End-
of-life (EOL) automotive catalytic converters are collected by a
variety of small to medium size companies in cooperation with the local
scrap yards and automotive dismantling facilities. Despite the high
content of Platinum Group Metals (PGMs), only 50% are recycled. One
impediment to a larger percentage is the export of used automobiles to
markets outside the U.S. and Canada. Others are:
Lack of knowledge that there are valuable metals contained
in those catalytic converters (as well as in other parts of the
car)
Poor dismantling practices that capture only a portion of
the metals-containing parts of the automobile
Separation not done in a way to capture all the value that
is present.
When looking at a way to make the recycling of electronic waste
most immediately interesting and profitable, it can make sense to focus
on the quality of recycling and not solely on quantity, For example,
collection of end-of-life products containing valuable materials
(examples: laptops and mobile phones) should be actively promoted and
supported.
In the U.S. it is a fact that landfilling competes with recycling
in the electronic waste and battery worlds. If there is no incentive
for society to recycle their electronics and rechargeable batteries, if
there is no education to show them (or the collectors) how valuable the
metals contained can be, if there is no legislation in place that
compels society to recycle, how can we move to the step of making
recycling the norm? If nothing else, can we encourage people to put
electronics inside a plastic bag that can then be put into their
recycling bin? Then it will be up to the collectors to funnel the
electronics to dismantlers or to other, specialized, collectors.
There is another aspect within the recycling chain to consider when
it comes to availability of critical materials and that is the
possibility to return the materials themselves to the suppliers that
use them and have generated the scrap in the first place. Umicore often
uses this tool for its automotive catalyst recycling, for example.
And let's move beyond the immediate practicalities to encourage
companies (and our design and engineering students) to design their
next generation devices, automobiles, batteries in a way that allows
easy dismantling and access to those parts containing critical
materials. It will make recycling that much simpler and the economics
of collection that much more attractive.
Senator Risch--Additional information in response to Senator Risch's
verbal question following oral testimony on june 9, 2011
The market failure in the system that could produce high-value
recycled materials is very much like a chicken-and-egg problem--which
comes first, the chicken or the egg? The problem is most acute with
respect to end-of-life goods--electronics and small devices--held by
American households.
First, the chicken. We do not have an infrastructure in place to
collect a significant volume of household end-of-life goods; there is
no easy, convenient way for most Americans to dispose of those goods
for recycling. Where electronic waste recycling does occur in the U.S.,
it's mainly by varying local mandates, or voluntary collection drives,
producing a hodge-podge, fragmented, low-volume approach. As a result,
almost all Americans store their end-of-life electronics--like old
personal computers--in their basements or attics, and they end up
simply throwing in the garbage end-of-life small devices--like cell
phones and mobile phones. The same is true for rechargeable batteries.
Consequently, these goods are not collected in central locations where
a market player could purchase them for recycling. They are instead
landfilled, with environmental ramifications and loss of valuable
critical materials that could have remained in the supply chain.
Second, the egg. We also do not have in the United States the
plants that use best available technology to process end-of-life goods
through the full recycling chain, to achieve the end result of new
materials from the discarded goods. Without these plants, there are few
market purchasers for end-of-life goods that could drive the systematic
collection of such goods.
So which comes first, the chicken or the egg? Actually, the
question is better framed as, ``How do we get both the chicken and the
egg in the United States?'' Let's look at the European Union for one
possible answer.
We know that in Europe there are plants operating today that use
best available technology to process end-of-life goods for recycling
and produce new materials from the discarded goods. We also know that
the raw materials for their process--the endof-life goods--are
collected systematically and are available to these plants to purchase
for their recycling processes. There are discussions going on in Europe
to set separate collection targets for those products that contain the
most valuable critical materials, to be certain those come into the
recycling cycle.
The market works in these regions because the end-of-life goods are
collected in significant volumes and within those volumes, higher value
recyclables are targeted specifically as well. The end-of-life goods
are then available for purchase and become the feedstock for these
recycling process plants.
These facts from Europe would suggest that (1) we can replicate
these recycling process plants in the U.S. (companies like Umicore
could be interested in opening new plants) if (2) we encourage the
systematic collection of end-of-life goods in the U.S. to be among the
raw materials for these plants. Finding a way to jumpstart an
infrastructure to collect end-of-life goods in the U.S. could be the
key to unleashing the market dynamic that would create a supply of raw
materials that would in turn lure recycling plants to the country.
Thereafter, the market would likely grow significantly on its own.
We will be pleased to answer any additional questions that may
arise after reading these responses.
______
Responses of David Sandalow to Questions From Senator Bingaman
Question 1. The most fundamental question to consider today is how
we should go about determining exactly which minerals and materials are
critical? The National Academy of Science recommended a method in their
2008 study whereby that determination can be made--this seems like a
good starting point, but can we make a more focused definition of which
materials are critical for energy technologies? How can we make sure
that every mineral or material under the sun is not considered to be
``critical''?
Answer. As part of the DOE Critical Materials Strategy, DOE
assessed the criticality of various materials used in four clean energy
technologies (electric drive vehicles, wind turbines, solar
photovoltaic cells and fluorescent lighting phosphors). In conducting
the criticality assessment, DOE adapted the National Academy of
Sciences (NAS) methodology cited above, which uses two assessment
dimensions. To address critical materials in clean energy technologies,
DOE slightly modified NAS's ``Supply Risk'' dimension and replaced
NAS's ``Impact of Supply Disruption'' dimension with ``Importance to
Clean Energy''. Assessment scores for each dimension were based on a
combination of qualitative and quantitative analyses.
DOE's assessment considered nine rare earth elements and five other
elements used in clean energy technologies. In the short term, only six
of the fourteen elements assessed were deemed as critical (dysprosium,
europium, indium, terbium, neodymium, and yttrium) for clean energy
technologies. The detailed assessment criteria and scores are given in
Chapter 8 and Appendix A the DOE Critical Materials Strategy, which is
available at http://energy.Rovisites/prod/files/piprod/documents/
cms_dec_17_full_web.pdf.
Question 2. In the hearing, we discussed that there are real global
market uncertainties surrounding critical mineral supplies--what risks
would the domestic mining industry face in light of the fact that there
are more broad global supply chain risks? In other words, how does the
global uncertainty in the critical materials markets affect the US's
ability to reconstruct a full domestic supply chain for these minerals
and materials?
Answer. Uncertainty in critical materials markets can create
challenges for U.S. businesses and make it more difficult to
reconstruct a full domestic supply chain for these materials. There are
both supply and demand strategies that reduce these difficulties and
support a robust domestic supply chain. The difficulties are minimized
when supply chains are globalized (instead of concentrated in single
countries), substitutes are developed, and materials are used more
efficiently. Better global markets and open trade policies can also
play a role in helping to manage risks. Around the world, governments
are working closely with businesses in their countries to address
challenges and seize opportunities associated with critical materials
markets. Recognizing the U.S. government's important role in working
with U.S. businesses can help strengthen American competitiveness in
this area and others.
Responses of David Sandalow to Questions From Senator Murkowski
INTERAGENCY COORDINATION ON REPORTS
In December of last year, the Energy Department published a very
useful report on its ``Critical Materials Strategy.'' It is my
understanding that, before the end of this year, the department plans
to release a new version of this report. As good as that first version
of the DOE strategy was, I had some concerns that it did not
demonstrate as much interagency coordination as it could have, and felt
that some more specific solutions to the problems identified might have
been helpful. For example, the report explained that the U.S. ranks
dead last in permit processing, but merely stated that such activities
were the Interior Department's responsibility.
Question 1. Can the Department of Energy commit to working in a
more collaborative way on the next iteration of this Critical Materials
Strategy, and perhaps publishing the next version jointly and with more
specific proposals--under legal authorities you already have or need to
see advanced by Congress--to solve some of the problems we face?
Answer. DOE is committed to working collaboratively with relevant
agencies (Commerce, DOD, EPA, Interior, State) and components of the
Executive Office of the President (OSTP, CEQ, USTR) in generating its
Critical Materials Strategy. Throughout the preparation of the 2010
Strategy, DOE provided updates to and sought inputs from other relevant
agencies both directly and through meetings of the EOP Interagency
Working Group on Critical Mineral Supply Chains led by the White House
Office of Science and Technology Policy (OSTP). For this year's updated
Strategy, DOE envisions a deepened working relationship with relevant
agencies based on last year's collaboration. The interagency working
group will provide DOE and other agencies additional opportunities to
collaborate on a range of topics, including establishing an economy-
wide definition for criticality, identifying and prioritizing materials
critical to our economy and national security, and identifying
potential strategies for ameliorating the criticality of these
materials. Building on close collaboration with USGS last year, DOE
envisions working closely with USGS as well as DOUBLM this year to
ensure application of the best available data and information
pertaining to rare earth mining in DOE's 2011 Critical Materials
Strategy.
DEADLINES
Question 2a. S. 1113 contains several deadlines, reporting
requirements, and other activities that would be conducted pursuant to
a deadline if the bill is enacted.
Please review all applicable deadlines contained in S. 1113 and
provide an assessment of the Department's ability to meet them in a
timely manner.
Answer. Section 106 contains a DOE reporting requirement on R&D
programs for recycling and alternatives. Reports summarizing
activities, findings and progress are required within 2 years of the
passage of the act and then every 5 years afterwards. Assuming adequate
resources, this timeline is reasonable, if it is understood that a
first report would mainly focus on activities and progress, as R&D may
take several years to produce findings. Assuming adequate resources,
the timeline for the report requested in Section 210 is also
reasonable.
Question 2b. S. 1113 contains several deadlines, reporting
requirements, and other activities that would be conducted pursuant to
a deadline if the bill is enacted.
If the Department feels it will be unable to meet any of the
applicable deadlines contained in S. 1113, please provide an
alternative timeframe that would be more workable from the agency's
perspective.
Answer. For the report required in Section 202, detailed findings
from R&D would likely take longer than 2 years because R&D may take
several years to produce findings, similar to the R&D described in
Section 106. Four or five years would be more reasonable.
COST ESTIMATES and EXISTING AUTHORIZATIONS
Question 3a. S. 1113 contains several authorizations to conduct
research and development, develop methodologies, and engage in other
activities not accounted for in existing budgets..
Please provide an estimate of the time and funds necessary to
undertake such activities, assuming such provisions were fully
implemented.
Answer. R&D programs required by sections 106, 202, 204, 205 and
206 of S. 1113 could build on R&D conducted by DOE's Office of Energy
Efficiency and Renewable Energy, as well as other offices within DOE.
The estimation of time and funds necessary to undertake such activities
would be determined through budgetary deliberations.
Question 3b. S. 1113 contains several authorizations to conduct
research and development, develop methodologies, and engage in other
activities not accounted for in existing budgets.
If the department is able to conduct research and development,
develop methodologies, and engage in any other of the aforementioned
activities, under existing authorizations, please provide a
comprehensive list of those authorizations cross-referenced to the
relevant sections of S. 1113.
Answer. A number of existing DOE authorities could be read to
authorize the types of research and development activities listed in S.
1113. However, none of these provisions expressly calls for the
activities described in Titles I and II of 5.1113. Much of the specific
R&D activity in S.1113 is authorized under the Energy Independence and
Security Act (EISA) of 2007 (Public Law 110-140). Under section 452 of
EISA, the Department of Energy is authorized to establish a program to
``support, research, develop, and promote the use of new materials
processes, technologies, and techniques to optimize energy efficiency
and the economic competitiveness'' of energy intensive industries. (42
U.S.C. 17111) Section 452 includes authority for efforts related to
``flexible sources of feedstock'' and ``recycling, reuse, and improved
industrial materials''. Section 641 of EISA 2007 authorizes DOE to
develop advanced storage methods. (42 U.S.C. Sec. 17231). Advanced
materials for renewable energy are also addressed in section 656 of
EISA 2007 (42 U.S.C. Sec. 17244). Research into alternative materials
specifically for vehicle light-weighting applications are authorized
under section 651 of EISA 2007. (42 U.S.C. Sec. 17241) Additionally,
other existing statutes could be read to allow the Department to engage
in research, development, demonstration, commercialization, and
technical and economic assessment activities for materials considered
critical to domestic clean energy technology and the domestic clean
energy industry, specifically 42 U.S.C. sections 5555, 5901 et seq.,
9204, 12001 et seq., 16231, and 16272.
The authority in the 21st Century Competitiveness Act (Public Law
110-69), as amended, (codified at 42 U.S.C. Sec. 16538) would allow
ARPA-E to participate in many of the activities contemplated in S. 1113
sections 106, 109, 202, 204, 205, 206 and 210.
Response of David Sandalow to Question From Senator Udall
Question 1. We heard testimony from General Electric and Umicore on
how their respective companies use and have developed recycling
processes for critical materials. What is DOE doing in the area of R&D
for recycling of critical materials? What is DOE doing in the area of
post-consumer collection and other logistical challenges to recycling
of critical materials?
Answer. The Department of Energy (DOE) has pursued electric vehicle
battery recycling research for some time. For example, Argonne National
Laboratory has, for a number of years, done work evaluating the
potential for recycling of lithium-ion batteries in order to develop
improved processes and maximize material recovery. DOE has also
supported some recycling infrastructure. In 2009, the Department
supported TOXCO to expand their current battery recycling operations in
Lancaster, Ohio.
Research into recycling of materials identified as critical in last
year's Critical Material Strategy is an increasing focus for DOE, with
the intent of pursuing R&D that has the best potential to contribute to
an economical supply of critical materials. For example, the proposed
Critical Materials Hub will pursue separation technologies that can be
economically applied to both mined ores and recycled product streams.
While DOE intends to pursue recycling as part of a strategy to
address material criticality, it is important to keep in mind that
post-consumer collection and logistics is primarily in the domain of
other federal and state agencies. Furthermore, there may be
opportunities to recycle from industrial waste streams.
Responses of David Sandalow to Questions From Senator Hoeven
Question 1. Why, in your estimation, has China been able to
effectively develop its critical minerals program?
Answer. As part of its RE industrial policy, China has been
investing in RE R&D since the 1950s. China has two key national
research programs and four state laboratories on REs that house a total
of around 3,000 scientists.
In the early 1990s, China entered the international rare earth
market and quickly drove down global rare earth prices due to policies
that encouraged production and exports. China's share of global RE
production rose rapidly in the 1990s, and oversupply contributed to the
closure of mines in the United States and other countries by 2001. Some
experts have pointed to the lack of environmental controls as a factor
contributing to low cost Chinese production.
Since the early 2000's, China's policies have moved toward a
comprehensive industrial policy of directing production, restricting
exports and encouraging domestic production in downstream RE-consuming
industries. China has used export restraints and foreign investment
policies on rare earths to develop domestic downstream manufacturing
sectors, such as magnet and battery producers, and drive foreign
manufacturers of high-technology products to relocate to China. Some
have linked the Chinese government's efforts to enhance domestic
production of higher value-added RE outputs to employment generation
and the building of a vertically integrated RE industry. Outside of the
rare earth industry, China is pursuing similar policies of export
restraints with respect to indium and other metals and minerals.
Question 2. If China continues to develop its critical minerals
program, how long until China has cornered the critical mineral
development through either low cost production or mineral allocations?
If they do corner the market, what is the implication for our national
security?
Answer. China already dominates the market in certain materials,
especially rare earth elements and indium. This dominance has been
achieved through favorable resource endowments of these minerals as
well as low labor costs, and industrial policies designed to maximize
market share. With regard to rare earths, for instance, China has been
the world's leading rare earth producer since 1996, and rapidly grew
its share of global RE production when it entered the global market
with high-volume, low-cost minerals in the 1990s. This affected the
economic viability of deposits elsewhere. As a result of these
developments, China currently produces more than 95 percent of global
rare earth elements. Additionally, current economic reserves of indium
are heavily concentrated in China, which accounts for about 73% of
global reserves and half of indium refining.
China's dominance in certain critical material markets has
implications for U.S. economic, energy, and defense objectives. In
part, due to tightening export quotas imposed by China on all rare
earth elements, prices of certain elements have risen by 300-2500%
between 2009 and 2011. Sustained price increases could limit the
ability of U.S. manufacturers to procure the material inputs necessary
for production or, in some cases, impact the price of finished
components and end products. Additionally, severe supply restrictions
of critical materials due to tightened quotas could create shortages of
certain technologies or dependence on foreign suppliers.
Response of David Sandalow to Question From Senator Coons
Question 1. How will the proposed innovation hub for critical
materials differ from ongoing research programs at DOE, USGS, and the
AMES national lab? Will there be opportunities for collaboration
between the proposed innovation hub and existing researchers at
universities and other national labs?
Answer. The proposed Critical Materials Hub will focus on flexible
and adaptable materials processing, efficient separation techniques,
and other novel approaches to reducing dependencies on critical
materials. For example, the Hub will address industrial processes that
are sufficiently adaptable to enable adjustment of process outputs to
the changing economic and demand profiles of input critical materials.
The understanding gained from these processing improvements will aid in
optimizing critical materials use in existing components. Also,
innovations in separations of chemically similar rare earth elements
could promote increased, sustainable production of critical materials
by significantly decreasing the time and cost of materials processing
and reducing the environmental footprint of these processes. The
Critical Materials Hub will pursue separation technologies that can be
economically applied to both mined ores and recycled product streams.
The R&D pursued by the Hub will complement the current DOE critical
materials R&D portfolio.
This current DOE R&D portfolio includes work supported by the
Office of Energy Efficiency and Renewable Energy (EERE) and ARPA-E that
focuses on technology and product alternatives that reduce or eliminate
dependence on critical materials. Current activities in EERE are
centered on reduction or elimination of rare earths in electric drive
motors, batteries, and magnesium alloys for vehicles. ARPA-E has
recently issued a solicitation to fund early-stage technology
alternatives that reduce or eliminate the dependence on rare earth
materials by developing substitutes in two key areas: electric vehicle
motors and wind generators. Several current ARPA-E projects also focus
on new magnet and battery technologies with reduction or elimination of
rare earth elements as a goal.
The current DOE R&D portfolio also includes work supported by the
Basic Energy Sciences (BES) program within DOE's Office of Science to
elucidate the fundamental properties of lanthanides and actinides,
including separation science relevant to advanced nuclear fuels. The
Office of Science also supports work to investigate the atomic basis of
materials properties and behavior and to improve materials performance,
with an emphasis on magnetic materials containing rare earth additions.
The Hub will complement the existing efforts supported by DOE by
addressing processing and separation challenges at multiple stages of
the supply chain. The scope of the proposed Hub will be distinct from
the current work on critical materials at the USGS and the DOE-
supported work at Ames Laboratory. The USGS collects, analyzes, and
disseminates information on the domestic and international supply of
and demand for minerals and materials essential to the U.S. economy and
national security. USGS also provides assessments of undiscovered
mineral resources in the United States and around the world. The Hub
will not conduct these types of analyses. Ames Laboratory, which is a
DOE research facility run by Iowa State University, is a leader in rare
earth research, with a focus on the synthesis of highest quality
polycrystals and single crystals, advanced characterization methods,
and first principles modeling and does not focus on the processing
challenges the Hub will address.
Following the model of the existing Energy Innovation Hubs, the
Critical Materials Hub will be competitively awarded to a self-
assembled team of experts that may include members from academia,
industry, and the national laboratories. The Hub model will drive these
scientists and engineers to accelerate solutions to the most pressing
critical materials problems and promptly transfer the knowledge to
industrial partners who will be able to incorporate those solutions
into the market.
______
Responses of Marcilynn Burke to Questions From Senator Bingaman
Question 1. Presently there is a lack of information on which
critical minerals are present on public lands and what their present
value might be. Do you have any estimates of the value of any of these
minerals? What would you need to do to get an estimate of the present
value of these mineral deposits?
Answer. The first step to get a full understanding of potential
value of mineral resources on public lands is to inventory known
reserves and resources and then conduct an assessment of undiscovered
resources. The USGS recently completed an inventory of known principal
rare-earth-element reserves and resources in the United States. Of
these, approximately half are located on public lands. The next step is
to define a list of other critical minerals that are important for the
country's economic and national security and conduct an inventory of
those reserves and resources. Once the inventories are complete, and
proper geologic and grade-tonnage models are constructed for the
critical minerals in question, then an assessment of undiscovered
critical mineral resources may be conducted. By combining known
resources with estimates of undiscovered resources, a more
comprehensive understanding of resource endowment on public lands can
be realized. The value of the mineral resources depends on many
variables, including the cost of exploration and development, as well
as market prices, all of which can fluctuate greatly during the time
leading up to development.
Question 2a. The public gets a royalty for the extraction of other
minerals, such as oil, gas, and coal mined from federal lands.
Shouldn't a royalty be paid for critical minerals as well?
Answer. At this time, the BLM does not have a position with respect
to royalty collection for strategic minerals. The Administration has
proposed a gross royalty on some of the most valuable hard rock
minerals (gold, silver, lead, zinc, copper, uranium, and molybdenum)
produced from Federal lands by shifting these minerals to a leasing
system.
Question 2b. How can we make sure that the American taxpayer gets a
return on their investment in public lands where these mineral deposits
are opened to mining?
Answer. Generally the BLM tries to secure a fair return for the
American people for the use of their public land resources. However,
the 1872 Mining Law does not authorize that a royalty be paid for the
removal of locatable hardrock minerals. In order to ensure a better
return to the taxpayer, the Administration has proposed a gross royalty
on some of the most valuable hardrock minerals produced from Federal
lands by shifting these minerals to a leasing system. This proposal
does not currently include critical minerals. [Note: Minerals covered
by the BLM/DOI hardrock legislative proposal are gold, silver, lead,
zinc, copper, uranium, and molybdenum.]
Question 3. As you know, the disposition of hardrock minerals on
public lands is governed by the antiquated Mining Law of 1872, which
allows miners to locate claims and exclude other uses and mining
developers. Some believe that these claims can be held for speculative
purposes. Wouldn't it help ensure that critical minerals are developed
diligently and in a more orderly fashion if a leasing system were put
in place?
Answer. To date, industry has demonstrated little interest in
developing critical minerals on public lands through the filing of
notices of exploration and plans of operation. The Administration has
proposed moving certain hardrock commodities into the existing leasing
system. Permitting requirements for other Federal, state, and local
authorizations would remain unchanged.
Question 4. At present, how many plans have been submitted to the
BLM that are seeking to open a mine that would extract ``critical
minerals'' from public lands? These ``critical minerals'' could include
any of the minerals or elements as identified by the National Academy
of Science in their ``Minerals, Critical Minerals, and the US Economy''
report or the DOE strategic plan on the same topic. If there are none
pending, can you provide a history of any submitted plans within the
past 10 years.
Answer. The BLM has not approved any mining plans of operations for
critical minerals or rare earth elements during the past 10 years.
Presently, none are pending; however the BLM expects to receive two
plans of operations for proposals to commence mining minerals and
elements from the NAS critical elements list. Both projects are located
in Nevada.
Lithium--proposed by Western Lithium in Kings Valley,
Nevada. The plan of operations is expected to be submitted by
third quarter 2011.
Vanadium--proposed mine known as the Gibellini Project,
south of Eureka, Nevada. The company is expected to file a plan
of operations in 2011.
Question 5a. Can you describe the process that a potential owner/
operator of a new mine has to go through to open a new mine?
Answer. The process of mining locatable minerals on public lands
generally consists of the following steps, as broadly described in
Geological Survey Scientific Investigations Report 2010-5220:
1) Proving the deposit (locating a mining claim, exploring
the deposit, providing a financial guarantee or bond);
2) Mining and metallurgical planning (submitting a mining
plan of operations to develop the deposit, compliance with the
National Environmental Policy Act (NEPA));
3) Permitting the mine-BLM, other Federal agencies and the
State (approval of plan of operations, seeking permits from
Corps of Engineers, applying for a mine identification number
and obtaining any needed plan approvals from the Mine Safety
and Health Administration (MSHA), state and related agencies,
providing a bond);
4) Construction of mine and plant (inspections of mine
development, approvals from state for construction plans,
periodic bond adequacy review);
5) Operation (mining, periodic safety and health inspections
and monitoring by MSHA and possibly other federal and state
regulatory agencies, periodic bond adequacy review);
6) Reclamation and closure (inspections of reclamation, bond
release, closure of mining project in accordance with other
federal and state regulatory agencies rules and regulations).
The steps listed above do not, for purposes of this answer, include
capital formation and acquisition of project financing.
Question 5b. How many regulatory programs oversee any given mine
operation, from concept design to the startup of commercial production-
including all applicable environmental standards?
Answer. On Federally-owned lands, two regulatory programs-
administered by the Forest Service (FS) (36 CFR 228) and the BLM (43
CFR 3809)-oversee a given mine operation.
In addition, mines on Federally-owned lands must also comply with
all applicable state, Federal, and local permitting requirements. At
the state level, there are often multiple permitting programs, largely
focused on air and water quality, ground water protection, mining
reclamation and mine safety matters. In most states, permitting
programs to implement Federal environmental laws have been delegated to
states by the Federal government, such as implementation of the Clean
Air Act and Clean Water Act. State and local governments in some states
may establish additional permitting requirements. Gold mines are also
subject to air toxics regulation under the Clean Air Act.
Question 5c. Are these different from the regulatory programs that
have oversight and enforcement authority over the mines during their
operation?
Answer. Mining regulators with direct responsibility for oversight
and enforcement of mines include the Federal land management agencies
(BLM and FS), the Mine Safety and Health Administration (U.S.
Department of Labor), and state mine inspectors as well as state mine
permitting and reclamation agencies.
These agencies are distinct from the Federal and state agencies
charged with regulating the various aspects of environmental laws.
Generally, the environmental regulators are focused on a single
resource such as air, water, or wildlife.
Question 5d. Can you describe each of these programs, their intent,
and at what level of government they reside?
Answer. These programs are numerous. In 1999, the National Research
Council provided sample descriptions of these programs in a report
titled ``Hardrock Mining on Federal Lands.'' The details of these
descriptions are found in Appendix C of that report, which is copied
and attached as Attachment 1 to these Questions for the Record.
The full report is available in Acrobat format from the National
Academy Press Web site. (http://www.nap.edu/
catalog.php?record_id=9682). The states may have modified, extended, or
improved their regulatory programs; however, the BLM does not track
closely this kind of information.
Question 6a. Is there any report that you are aware of that
indicates that the US is last in permitting times?
Answer. The position of ``last in permitting times'' is derived
from the 2011 edition of an annual report prepared by a mining
consultancy, the Behre Dolbear Group, called ``Ranking of Countries for
Mining Investment, Where Not to Invest.'' The report is available on
the company Web site, www.dolbear.com.
The same report lists the U.S. as No. 6 among the 25 nations
evaluated in its favorability toward mining enterprises when taking
into account six other rating factors in addition to mining delays.
Question 6b. How does the US permitting regime compare to other
nations in the approval process and permitting of new mines?
Answer. The BLM has not conducted any surveys of mine permitting
times generally. The Behre Dolbear survey gives the United States a one
out of 10 possible points. The highest score was awarded to Australia,
which received an eight out of 10 points.
Question 6c. Is this different for the reopening of old mines?
Answer. The BLM has done no surveys in this area, and the Behre
Dolbear survey appears to make no differentiation between new mines and
mines being reopened.
Question 7a. What exact role does the BLM play in the actual
permitting process?
Answer. For mines on public lands, BLM:
acknowledges Notices for exploration as specified by the 43
CFR 3809 regulations;
approves Plans of Operations for mining operations and
exploration as specified by the 43 CFR 3809 regulations;
accepts and approves financial guarantees for both Notice-
and Plan-level activities.
The BLM's approval of Plans of Operation requires environmental
analysis under NEPA. Because of this requirement, the BLM generally
serves as the lead agency for the environmental analysis and many of
the other Federal and state permitting agencies become cooperators in
that process.
Question 7b. Does the BLM issue permits? If not permits, then what?
Answer. The BLM does not issue permits. The BLM acknowledges notice
level exploration, approves plans of operations, and approves financial
guarantees.
Question 8. The most fundamental question to consider today is how
we should go about determining exactly which minerals and materials are
critical? The National Academy of Science recommended a method in their
2008 study whereby that determination can be made-this seems like a
good starting point, but can we make a more focused definition of which
materials are critical for energy technologies? How can we make sure
that every mineral or material under the sun is not considered to be
``critical''?
Answer. The 2008 National Academy of Sciences study was largely
funded by the USGS and provides a good conceptual framework of how to
consider the criticality of mineral commodities. With the NAS
criticality concept as a foundation, the USGS is making progress on a
more quantitative approach, whereby mineral commodities can be
quantified in terms of risk of supply. Quantifying importance of use
must be approached with specific industries in mind and involves an
analysis of what mineral commodities have important applications in
each of the energy, defense, transportation, health care, and
agricultural industries, for example.
Responses of Marcilynn Burke to Questions From Senator Murkowski
PRINCIPAL STATISTICAL AGENCY--On April 15th, I released a
discussion draft of the Critical Minerals Policy Act for comment. In
reviewing those comments, I was struck by the number advocating for the
designation of the minerals information offices at USGS as a
``Principal Statistical Agency.''
Question 1a. Please describe the logistical, managerial,
functional, budgetary, and other differences between the current status
of these offices and how they would be treated if designated as a
Principal Statistical Agency.
Answer. In a 1997 Order Providing for the Confidentiality of
Statistical Information, OMB established ``a uniform policy for the
principal statistical agencies'' but appears to have used the term
principal statistical agency informally. The Order lists twelve
agencies under the heading ``Designated Statistical Agencies or
Units''. These agencies were determined by OMB to be subject to the
1997 Order and thus obliged to implement certain policies on
confidentiality of information (Federal Register, v. 62, No. 124, p.
35044-35050)\1\. The USGS is not included as one of the twelve agencies
listed in the 1997 Order.
---------------------------------------------------------------------------
\1\ Order roviding for the Confidentiality of Statistical
Information http://www.gpo.gov/fdsys/pkg/FR-1997-06-27/pdf/97-16934.pdf
---------------------------------------------------------------------------
The Confidentiality Information Protection and Statistical
Efficiency Act of 2002 (CIPSEA) defines a statistical agency or unit as
``an agency or organizational unit of the executive branch whose
activities are predominantly the collection, compilation, processing,
or analysis of information for statistical purposes''\2\. OMB, which
coordinates the implementation of CIPSEA, recognized 14 statistical
organizational units as statistical agencies or units for the purposes
of CIPSEA in its 2007 guidance on implementing the Act\3\. Neither the
USGS as a whole, nor any part of USGS, is designated as a statistical
agency or unit under CIPSEA.
---------------------------------------------------------------------------
\2\ Confidential Information Protection and Statistical Efficiency
Act of 2002 P.L. 107-347, title V http://www.gpo.gov/fdsys/pkg/PLAW-
107publ347/pdf/PLAW-107publ347.pdf
\3\ Implementation Guidance for Title V of the E-Government Act,
Confidential Information Protection and Statistical Efficiency Act of
2002 (CIPSEA) http://www.gpo.gov/fdsys/pkg/FR-2007-06-15/pdf/E7-
11542.pdf
---------------------------------------------------------------------------
The designation of an agency or unit as a statistical agency or
unit for the purposes of CIPSEA subjects the agency to different
confidentiality standards. CIPSEA statistical agencies or units must
implement higher standards to protect data confidentiality than other
statistical units. This involves increased physical and IT security
measures, confidentiality training for all personnel, additional record
keeping, informing respondents about the confidentiality protection and
use of information, ensuring that information is used only for
statistical purposes, ensuring that identifiable information is not
disseminated, and supervising and controlling agents who have access to
confidential information. CIPSEA does not convey specific authority to
an agency. Rather, each agency's authority is defined in the statutes
governing that agency. For example, some CIPSEA statistical agencies
have mandatory data collection authority. In addition, there are
differences in how the agencies are funded.
If a unit within USGS, such as the National Minerals Information
Center, were to be designated as a statistical unit under the
provisions of CIPSEA, that unit would have to implement additional IT
and administrative security measures, increase personnel training, and
meet additional reporting requirements to comply with the required
higher confidentiality standards. The confidentiality of data collected
by the National Minerals Information Center is currently governed by
subsection (f) of the National Materials and Minerals Policy, Research,
and Development Act of 1980 (30 U.S.C. 1604(f)).
Question 1b. Does the Administration support making this
``Principal Statistical Agency'' designation?
Answer. The Administration has not yet developed a position on the
designation of the National Minerals Information Center as a Principal
Statistical Agency. The Administration is in favor of a well supported
and robust nonfuel mineral data collection and analysis function to
provide timely information on nonfuel mineral supply and demand
statistics and forecasts.
The mission of the USGS National Minerals Information Center
(formerly the Minerals Information Team) is to col*lect, analyze, and
disseminate information on the domestic and international supply of and
demand for minerals and mineral materials essential to the U.S. economy
and national security.
The Center's goal is to provide decision makers with the
information required to ensure that the Nation has an adequate and
dependable supply of minerals and materials to meet its defense and
economic needs at acceptable costs related to environment, energy, and
economics.
The USGS does not anticipate designation of the national Minerals
Information Center as s Principal Statistical Agency will improve our
ability to meet this goal.
Question 1c. Are there benefits to making such a designation, in
terms of gathering information that is not currently available, or
downsides, in terms of the relationships already established with those
providing minerals information on a voluntary basis?
Answer. The USGS believes that such a designation would have little
impact on the quantity and quality of data currently collected through
a long-standing trust-based voluntary system. The public and private
sectors rely on USGS minerals information to understand better the use
of materials and the ultimate disposition of materials in the economy,
to use national resources efficiently, and to forecast future supply
and demand for minerals.
The National Minerals Information Center canvasses the nonfuel
mining and mineral-processing industry in the United States for data on
mineral production, consumption, recycling, stocks, and shipments. More
than 140 surveys are conducted annually on commodities-from abrasive
materials to zirconium. Aggregated U.S. statistics are published
because individual company data are proprietary and are not released.
More than 18,000 producer and consumer establishments voluntarily
complete about 40,000 survey forms annually. The USGS has cooperative
agreements with the U.S. State governments to exchange data. In
addition, the Center reports U.S. trade data collected by the U.S.
Department of Commerce.
International minerals information is directly obtained through
questionnaires and exchanges from approximately 100 countries annually.
Question 1d. Are there any other issues that the Senate Energy and
Natural Resources Committee should consider or be aware of in deciding
whether or not such a designation should be made?
Answer. Designation of USGS's nonfuel mineral data collection
effort as a statistical agency or unit under the provisions of CIPSEA
would result in a requirement for increased documentation, increased
administrative and IT security measures, and increased staff to
implement the increased confidentiality measures. We do not anticipate
that such a designation would improve our ability to provide decision
makers with the information required to ensure that the Nation has an
adequate and dependable supply of minerals and materials to meet its
defense and economic needs at acceptable costs related to environment,
energy, and economics.
Question 2. In reviewing my legislation, S. 1113, can you tell us
whether it amends, weakens, or in any way modifies existing regulatory
programs meant to ensure environmentally-responsible conduct?
Answer. The language of the bill does not appear to directly affect
the BLM's existing regulatory programs.
PACE OF PERMITTING--Behre Dolbear's most recent ``Where Not to
Invest'' report states that ``permitting delays in the United States
are the most significant risk to mining projects. the United States is
ranked lowest, at a 1 due to the average 7-to 10-year period required
before mine development can begin.''
Question 3. Would you describe the Administration as satisfied or
dissatisfied with the fact that the United States is last in the world
when it comes to mine permitting?
Answer. The BLM on average takes four years to approve a mining
plan of operations for a large mine (more than 1,000 acres) on public
lands. A number of factors contribute to the duration of this approval
period, including the BLM's NEPA obligations and its responsibility in
reviewing a proposed mining plan of operations on public lands to
ensure that prospective mine operators address environmental
protections for water, air quality, and other natural resources in
compliance with the laws of the United States. We continuously strive
to improve the efficiency of our process. In addition, a number of
factors outside the BLM's control contribute to the duration of the
period before mine development begins, including the filing of mining
plan modifications by the operator, delays by the operator in the
posting of bonds, and litigation by third parties.
Factors contributing to mine plan approvals that require longer
than four years include litigation and appeals, state and local
permitting, and other federal state, and local authorizations. These
longer time periods before mine approval may also include time the
operator spends exploring the site under a notice, before filing a mine
plan of operations to the BLM.
DUPLICATIVE AUTHORITIES--The Department's written testimony
asserted that ``many of the activities called for in S. 1113 are
already authorized by existing authorities.''
Question 4. Please provide a detailed list, cross-referencing those
authorities contained in S. 1113 that the department feels are
duplicative with relevant sections of the U.S. Code, including full
citations and naming of the relevant, underlying statute(s) noted.
Answer.
----------------------------------------------------------------------------------------------------------------
S. 1113 Provision Existing Authority
----------------------------------------------------------------------------------------------------------------
Secs. 101, 103, 107, 203, 207, 208, 209, 211 Organic Act of March 3, 1879; 43 U.S.C. 31 et
seq.
Strategic and Critical Materials Stock Piling
Act of 1946, 50 U.S.C. 98g
National Mining and Minerals Policy Act of
1970; 30 U.S.C. 21a
National Materials and Minerals Policy,
Research and Development Act of 1980; 30
U.S.C. 1601 et seq., especially 1604(e) and
(f).
----------------------------------------------------------------------------------------------------------------
DEADLINES--S. 1113 contains several deadlines, reporting
requirements, and other activities that would be conducted pursuant to
a deadline if the bill is enacted.
Question 5a. Please review all applicable deadlines contained in S.
1113 and provide an assessment of the Department's ability to meet them
in a timely manner.
Question 5b. If the Department feels it will be unable to meet any
of the applicable deadlines contained in S. 1113, please provide an
alternative timeframe that would be more workable from the agency's
perspective.
Answer. The BLM believes that the deadline imposed by the reporting
requirement at Sec. 104 (d) would be difficult to meet, due to the size
and nature of the request. Such a task would require data calls from
multiple agencies and stakeholders. It would require the redirecting of
staff resources from other priority work since much of this data is not
centrally located and would require manual extraction from case records
which would then need to be collected and analyzed. It is unknown if
any of the Department's databases would be adequate to collect and
analyze the collected data. The ability of other agencies within the
Department of Interior to meet these deadlines is unknown.
The USGS recommends the following:
------------------------------------------------------------------------
S. 1113 Provision Deadline Deadline Recommended
------------------------------------------------------------------------
Sec. 101 (a): 30 days 90 days. It will take time to
realign staff and projects to
position ourselves to begin
conducting the activities called
for in this bill.
------------------------------------------------------------------------
Sec. 101 (c): 120 days 240 days. It is estimated that the
draft methodology will be available
for comment on the federal register
for 30 days (120 days from
enactment). An additional 30 days
will be required to review public
comments and revise the draft
methodology accordingly (150 days
from enactment). Establishing a
National Academy committee and the
time required for the committee to
review the methodology is expected
to be an additional 90 days (240
days from enactment).
------------------------------------------------------------------------
Sec. 101 (d): 150 days 270 days. Reviewing the National
Academy committee's recommendations
and revising the methodology
accordingly is estimated to require
30 days (270 days from enactment).
------------------------------------------------------------------------
Sec. 101 (e): 150 days 360 days. It is estimated that the
final methodology will be available
for comment on the federal register
for 30 days (300 days from
enactment). Final determination of
critical minerals using this
methodology will require an
additional 60 days (360 days from
enactment).
------------------------------------------------------------------------
Sec. 103 (a): 4 years As provided.
------------------------------------------------------------------------
Sec. 104 (e), (f)(2): 4 years 5 years. One year from time of
completion of assessment activities
will be required to compile,
synthesize, report , and publish
final assessment results.
------------------------------------------------------------------------
Sec. 211 (a): 21 months 24 months. This will be the time
required if only an inventory of
identified resources for these
mineral commodities is called for
and not an assessment of
undiscovered resources. No previous
national assessments of these
mineral commodities exist, so
updating assessments is not
applicable.
------------------------------------------------------------------------
Sec. 211 (d): 2 years 30 months. An additional 6 months
from completion of inventory will
be required to analyze, compile a
report, and publish results.
------------------------------------------------------------------------
.
COST ESTIMATES and EXISTING AUTHORIZATIONS--S. 1113 contains
several authorizations to conduct research and development, develop
methodologies, and engage in other activities not accounted for in
existing budgets.
Question 6a. Please provide an estimate of the time and funds
necessary to undertake such activities, assuming such provisions were
fully implemented.
Answer. From the BLM's perspective, the extensive nature of this
request would require an expenditure of no less than $1 million with
additional funding needed for a database. The primary cost would be
data collection, which must be done manually. The BLM does not have
personnel available to collect this data and a third-party contractor
would likely be needed. In addition, the modification of an existing
database or a creation of new database to collect, store, and analyze
the requested data would be necessary.
Question 6b. If the department is able to conduct research and
development, develop methodologies, and engage in any other of the
aforementioned activities, under existing authorizations, please
provide a comprehensive list of those authorizations cross-referenced
to the relevant sections of S. 1113.
Answer.
----------------------------------------------------------------------------------------------------------------
S. 1113 Provision Time required Funds Required Existing Authorizations
----------------------------------------------------------------------------------------------------------------
Sec. 101 1 yr $1M Strategic and Critical Materials
Stock Piling Act of 1946; 50
U.S.C. 98(g)
----------------------------------------------------------------------------------------------------------------
Sec. 103 (a); (d) 4yrs; 5 yrs $20M Organic Act of March 3, 1879; 43
U.S.C. 31 et seq.
Mineral resource assessment work
on certain public lands is
authorized under the Wilderness
Act of 1964; 16 U.S.C. 1133; the
Federal Land Policy and
Management Act of 1976; 43 U.S.C.
1711, 1782.; the Alaska National
Interest Lands Conservation Act
of 1980; 16 U.S.C. 3150
----------------------------------------------------------------------------------------------------------------
Sec. 107 6 yrs $8M National Materials and Minerals
Policy, Research and Development
Act of 1980; 30 U.S.C. 1601 et
seq., especially 1604(e) and (f).
----------------------------------------------------------------------------------------------------------------
Sec. 211 (a) (d) 24 months (if $5M Organic Act of March 3, 1879; 43
inventory of U.S.C. 31 et seq.
identified
resources and not
assessment of
undiscovered
resources); 30
months
----------------------------------------------------------------------------------------------------------------
Responses of Marcilynn Burke to Questions From Senator Coons
Question 1. Are geologic occurrence models adequate to effectively
explore for REE?
Answer. The USGS is currently updating existing mineral deposit
models for the important rare earth element (REE) bearing mineral
deposit types. These models provide the fundamental geologic framework
in which to understand why such deposits form and why they formed where
they have in the earth's crust. This information is used to predict
where undiscovered deposits are likely to be found. Once these geologic
models are complete, they will be adequate to explore for and assess
undiscovered REE deposits.
Question 2. Are geologic occurrence models adequate to effectively
estimate endowments of REE for the USA, China, and less well-known
parts of the world like Afghanistan?
Answer. To understand an endowment requires an inventory of known
reserves and resources and an assessment of undiscovered resources. An
assessment of undiscovered resources requires up-to-date global grade-
and-tonnage models for each specific type of REE-bearing deposit.
Currently the grade-and-tonnage models for the important REE-bearing
mineral deposits are inadequate and in need of updating. The USGS
recently completed an inventory of known principal REE reserves and
resources in the United States. An estimate of domestic undiscovered
REE resources cannot be made until grade-and-tonnage models are
adequately updated and constructed. This also applies to estimating
endowment for areas outside the United States.
Appendix II
Additional Material Submitted for the Record
----------
Statements of UMICORE
WASTE ELECTRICAL AND ELECTRONIC EQUIPMENT (WEEE) UPDATE
The European Commission adopted its draft proposal for a revised
directive on WEEE in December 2008 following a public consultation and
impact assessment. The revision aims to improve implementation and
compliance, in particular through addressing the low collection rate of
WEEE, diverging requirements for producers, sub-standard treatment in
the EU and illegal exports of outside the EU.
The proposal is now in the legislative decision-making process,
when the European Parliament and the Council (Member States) amend and
then adopt the proposal. As the Council (Member States) and the
European Parliament had different views on several provisions, a first
reading agreement could not been reached (the European Parliament voted
in first reading in November 2010 and the Member States reached
political agreement in May 2011). As such, the directive will enter the
second reading procedure, which means a final agreement could be
reached by end of this year or early next year.
Revised/new provisions
Scope: the directive should apply to EEE falling under the
following ten categories: large household appliances, small household
appliances, IT and telecommunications equipment, consumer equipment,
lighting equipment, tools, toys, leisure and sports equipment, medical
devices, monitoring and controlling instruments and automatic
dispensers. Note that the final agreement could refer to an open scope,
which would include all EEE with a few exceptions (the European
Parliament and several Member States support an open scope).
Product design--measures to promote the design and production of
EEE in view of facilitating re-use, dismantling and recovery should be
promoted.
Collection target--the revision proposes a new collection target of
65% of the average weight of EEE placed on the market of each Member
State in the two previous years to be achieved annually by producers or
third parties acting on their behalf starting in 2016. The objective is
to further boost collection while taking into account the variations in
EEE consumption in each Member State (the current ``one size fits all''
target of 4kg per inhabitant per year of WEEE from households has led
to sub-optimal targets for some countries and too ambitious for
others). The proposal foresees several flexibilities such as possible
transitional measures for Member States and a reexamination of the rate
later on by the European Parliament and Council.
Separate collection--the disposal of untreated separately collected
WEEE is prohibited and the collection and transport of separately
collected WEEE should be carried out in a way which optimizes re-use
and recycling and the confinement of hazardous substances. Cooling and
freezing equipment containing ozone depleting substances and
fluorinated greenhouse gases are considered priority products for which
a high level of separate collection is to be targeted.
Recovery and Recycling targets--the existing recovery and recycling
targets set per product category are increased with 5%. Also, in order
to encourage the re-use of whole WEEE, the revision proposes to include
re-use of whole appliances in the increased target for recycling
combined with re-use (one target for recycling and re-use). These
targets are calculated for each category as weight percentage of
separately collected WEEE that is sent to recovery facilities.
Treatment requirements--Member States should ensure that all
separately collected WEEE undergoes proper treatment. The European
Parliament and the Council amended the Commission proposal calling for
the development of standards for treatment, including recovery,
recycling and preparing for re-use.
Financing WEEE from private households--calls for Member States to
encourage producers to finance all the cost occurring for collection
facilities for WEEE from private households.
Information for users--producers are allowed to show purchasers a
visible fee at the time of sell of new products for the costs of
collection, treatment and disposal
Producer Registration--the revision proposes the harmonisation of
the registration and reporting obligations for producers between the
national producer registers, including making the registers inter-
operational, with the view to reduce the administrative burden related
to WEEE implementation.
Enforcement--in order to strengthen the enforcement of the WEEE
Directive, in particular to distinguish between EEE and WEEE in the
case of shipments of used EEE, minimum monitoring requirements for
shipments of WEEE are proposed. Such requirements include: a copy of
the invoice and contract relating to the sale and/or transfer of
ownership of the EEE which states that the equipment is for direct re-
use and fully functional, evidence of evaluation or testing of the EEE
and sufficient packaging to protect the shipped products from damage
during transportation, loading and unloading.
______
In response to Item ``5--Crosscutting Questions'' of the Department
of Energy Quadrennial Technology Review Framing Document, Umicore has
the following comments:
2) How do we balance international competitiveness against
international cooperation?
There is an example Umicore recognizes from its own experience,
where international collaboration is the core of the projects covered.
That is the European Commission FP7 research programs. The Seventh
Framework Programme (FP7) bundles all researchrelated EU initiatives
together under a common roof to reach the goals of growth,
competitiveness and employment. Further details available at http://
cordis.europa.eu/fp7/home_en.html. Umicore is actively committed to
several of such programs, which broaden the scope of work and collect
expertise from different viewpoints. We find this a very enriching
experience.
Collaboration can also be at a national level; e.g. in Germany
where Umicore is a member of the Development Plan for Electric
Mobility. The Plan intends to speed up research and development for
battery electric vehicles as well as the market preparation and
introduction for those vehicles. Ultimate target: 1 million EV's on the
road by 2020.
Programs such as these assist Umicore in defining its own materials
development.
3) What principles should the Department follow for allocating
resources among technologies of disparate maturity and potential time
to impact?
Put in place across the board a defining strategy that integrates
both materials development and recycling. This ``closed loop'' model
ensures that whatever the level of maturity, the resources will be put
to the best use.
d) What are useful metrics to guide DOE technology activities?
Increased energy efficiency
Lower environmental impact
Wherever possible, use quantitative metrics that clearly link to
the objectives of the programs as well as to general sustainable
development principles. These metrics should measure the progress made
relative to the starting point and can have their origins in
engineering sciences. These could be energy efficiency and
environmental impact metrics; for example, the categories used inLife
Cycle Analysis:
Green house gas potential
Emission of hazardous substances--Recycling of waste
streams (e.g. recycling of wastes from the production of energy
materials or technologies or recycling of process water)
Or amount of waste that cannot be recycled.
Furthermore a combination of different metrics will be necessary to
cover all aspects of technology performance.
An example from our own organization: Umicore Battery Recycling has
evaluated its recycling process for battery materials versus primary
production of battery materials by using exergy as a metric (besides
other metrics in the technology development phase), to express
preservation of material quality as well as the lower use of energy
resources. The two items are linked as the recycling of batteries
preserves the material so it can be used for new batteries, it avoids
the mining of virgin materials (at high energy cost) and it preserves
the efforts (energy) invested in the battery material during mining and
processing in its first life cycle. Furthermore the high purity of the
materials in the used batteries means that less effort (energy) is
necessary to obtain high-quality materials again. Umicore combined this
with a highly energy-efficient recycling (smelter) technology, which
uses as little energy as possible. See ``The global life cycle of
rechargeable Lithium ion batteries: what natural resource savings can
be gained through recycling?''--Jo Dewulf, Ghent University together
with Umicore http://www.batteryrecycling.umicore.com/download/
show_LCM2009CapetownJoDewulf.pdf
7) Have we correctly identified and structured these six
strategies?
A critical component that we do not see incorporated here is
acknowledging the role of the supply of materials in achieving the
goals of the strategies, and as a consequence the energy needed to
mine, refine, manufacture (= supply) the materials is not taken into
account. The demands for energy and materials are closely interlinked
as it takes energy to produce the materials that can enable the clean
energy future. Recycling of metals requires much less energy than their
primary production, hence recycling is a core technology in achieving a
clean energy society.
Recovering metals from production scrap and waste and from end-of-
life products needs much less energy than production from primary
resources. For aluminum for example, recycling uses only 25% of the
energy demand for virgin aluminum production, hence produces also 1/4th
of the CO2 emissions. For the more noble metals such as
cobalt, the platinum group metals and metals such as indium, tellurium
or selenium the energy savings made by recycling the metals can be even
larger. Therefore recycling is a core energy technology. Producing
metals via responsible recycling means that the industry will emit less
CO2 and the possibilities for new recycling industry and
associated manufacturing industry in the U.S. can increase. The energy
demand in the industrial sector will be lower as well. In addition,
further advancements (innovation) in the energy efficiency of the
recycling processes can drive down the energy consumption further,
resulting in a ``double gain'' in the field of energy savings.
This leads Umicore to recommend that the DOE include in all its R&D
programs, across the six strategies:
1) the notion that recycling of materials/products and energy-
efficient production of metals and materials reduce the demand for
energy, thereby serving as the underpinning of a sustainable long-term
policy around clean energy technology research
2) a life cycle and systems approach to the evaluation of the
reduction in energy usage over time
3) the notion that the materials, devices and/or technologies
developed need to be designed from the beginning as recyclable, making
certain the energy footprint of recycling is low. Or more generally,
that the new technology is performing better than the current
technology in all aspects--holistically, in terms of energy and
material usage and from the environmental perspective
4) appropriate metrics be used that support the evaluation of the
performance from an energy and materials sustainability point of view
5) recycling and materials sustainability should be demonstrated.
To support the implementation of the above we suggest assigning a
dedicated person who can take the lead on recycling and materials
efficiency, and is responsible for embedding this underpinning and
cross-cutting theme throughout the six strategies. Although this may
sound huge and a near-impossible transformation, Umicore, as a global
company, is proof that such a transformation is possible. Umicore has
transitioned from a company active in metals production from mining to
a company that produces materials for clean technologies, and produces
these metals mainly from industrial by-products and end-oflife products
using highly energy efficient, clean recycling technologies. This
strategic business decision has resulted in high levels of innovation
within the company and has stimulated research and innovation via
collaboration with many university partners and inhouse R&D centers. It
has created high-tech manufacturing and industry jobs. Including
recycling and the concept of energy-efficient materials supply into the
program offers the United States also the possibility to stimulate
innovation and contribute to national and global sustainability, as
well as (partly) de-coupling itself from fossil fuels and dependence on
other countries for metals supplies. The end-of-life products necessary
for recycling are, in many cases, already located within the United
States.
Please see also our response to item 8 for examples of how Umicore
is already working within the six strategies.
8) We welcome comment on the selection of these technologies and
sources, as well as suggestions of alternate technologies and sources,
and updated technology, cost and forecast data, particularly in
rapidly-moving fields.
Umicore's concerns about the need for energy efficient materials
production and recycling are indicated in the items above. There are
direct and indirect relations between the materials and processes in
which we are involved and we see value in developing a kind of network
structure among all the different players in the industry: a byproduct
or waste from one can easily be the raw material for another, for
example. So rather than keep each entity within one box of the Six
Strategies structure, we'd prefer diagonal lines connecting wherever
possible.
Specifically on 6.1.1.1--Transport--Increase Vehicle Efficiency--
Light-weight materials
DOE mentions the stimulation of the use of light weight metals like
aluminum, magnesium and other materials to reduce the vehicle weight.
Further supporting our comments in section 7, we like to use this as a
specific case. Despite the fact that most of the vehicle energy
consumption takes place in the use phase of the vehicle, it will be
important to also look at the energy investments made into the light
weight materials. This implies looking at the energy efficiency of the
light metal primary production process as well as stimulating recycling
of the light weight materials.
Recycling of the light weight materials is not straightforward
however, as the connection of the light weight material to other
materials, coatings etc. influences the effectiveness of the recycling
process and the material losses incurred. This is where the initial
design comes in and can facilitate recycling of the materials later on.
In addition, the appropriate recycling strategies and technologies need
to be developed and/or improved. Furthermore, recycling lowers the
energy demand of the metals manufacturing industry hence has a direct
link to Strategy 6.2.1--Building and Industrial Efficiency. All of this
allows for additional opportunities for innovation and clean technology
developments.
Appropriate metrics to evaluate are necessary. In this regard we
can suggest reading the following in the area of magnesium and metrics:
1) ``Coated magnesium--Designed for sustainability'' by C.E.M.
Meskers, PhD thesis Delft University of Technology, 2008.
2) C.E.M. Meskers, M.A. Reuter, U. Boin and A. Kvithyld. ``A
fundamental metric for recycling applied to coated magnesium''
metallurgical and materials transactions B vol 39, no 3 pp 500-517,
2008
3) C.E.M. Meskers, Y. Xiao, R. Boom, U. Boin and M.A. Reuter.
``evaluation of the recycling of coated magnesium using exergy
analysis'' Minerals Engineering vol 20 no 9 pp 913-925, 2007.
Specifically on 6.1.2.1--Transport--Progressive Electrification of
the Vehicle Fleet--Batteries
Umicore has done extensive work in this field that can support
deployment of one million EV's by 2015. Based on its ``closed loop''
business model (strategy that integrates materials development and
recycling), Umicore develops material designs and materials solutions
for the battery and OEM customers that contribute both to better
quality and to cost reduction (lower US$/kWh) while also developing a
unique recycling process for rechargeable batteries. Work is focused in
the following areas--often based on funding provided by Belgian, other
European, and South Korean programs.
1. Operating a state of the art industrial recycling plant
while at the same time continuing to improve its processes
2. Development of next generation Li Ion cathode materials
(with capacity, safety, recyclability and cost as main drivers)
3. Development of new Li Ion anode materials (same targets)
4. Exploring the limits of Li Ion chemistry by combining both
cathode and anode materials to make the best Li Ion battery
possible
5. Further improving the driving range of EV's with post Li
Ion battery systems, while contributing to better cost/
performance
6. Providing a material solution to the customer through
collaboration with other battery component suppliers (eg.
Electrolytes, binders)
7. Performing safe dismantling of used batteries and
providing suggestions for more optimized designs
Research and development is the cornerstone to realize these
successfully and the pilot production of batteries is key and
available. In the case of Umicore, the R&D is both applied and
fundamental. It is related to product and process innovation. The
innovation is based on a profound knowledge of the application and a
high quality network within the academic and industrial worlds.
Metrics for battery materials are related to the US$/kWh ratio by
the use of less expensive and future recycled base materials and by the
improvements in their capacity on both cell and system levels.
______
THE BATTERY DIRECTIVE SUMMARY
The directive aims at minimising the negative impacts of batteries
and accumulators on the environment. This should be achieved by
reducing the use of hazardous substances in batteries and accumulators
(in particular, mercury, cadmium and lead) and by treating and
recycling the amounts of used substances.
It applies to all types of batteries and accumulators, including
(H)EVs (exception: batteries used in equipment to protect Member
States' security or for military purposes, or in equipment designed to
be sent into space).
In order to ensure that a high proportion of spent batteries and
accumulators are recycled, the directive sets out collection and
recycling targets. As such, Member States must establish collection
schemes to promote and maximise separate waste collections and prevent
batteries and accumulators being thrown away as unsorted municipal
waste. Collection rates of at least 25% and 45% based on annual sales
have to be reached by September 2012 and September 2016 respectively.
Furthermore, as batteries and accumulators need to be easily removed,
Member States should ensure that manufacturers design their appliances
accordingly.
The directive also foresees that treatment and recycling are
performed using the best available techniques and establishes minimum
recycling efficiencies, focused on the output of the recycling process.
The recycling process of lead-acid batteries should recover all the
lead and 65% of the average weight of those batteries. The recycling
process of nickel-cadmium batteries should recover all the cadmium and
at least 75% of the average weight of those batteries. For other
batteries, the recycling process should recover 55% of the average
weight. Treatment and recycling may be performed outside the EU
provided it fulfills similar requirements to those in the EU. The
methodology to calculate the recycling efficiencies as well as the
criteria for assessment of similar conditions for treatment and
recycling outside the EU need to be further developed by the European
Commission.
The producers have to bear the cost of collecting, treating and
recycling batteries and accumulators, as well as the costs of campaigns
to inform the public of these arrangements.