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tv   Key Capitol Hill Hearings  CSPAN  May 6, 2016 7:00pm-8:01pm EDT

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important as two immutable facts regarding minerals about which most people agree totally. number one, high-tech and green revolutions create a demand for critical minerals that is absolutely exploding. there is on top of that an absolute mismatch between the demand for critical minerals and their availability in the united states and other developed countries who are producers of the gadgets that we like to buy. and of course, again, in abraham's book he goes over that more carefully. but that is sort of the crux of where we are now. the more gadgets, the more mining, but -- in the end today as we wrap up, we'll show you some other alternatives to mining. i'm an alumni of the usgs. and it's probably one of the greatest taxpayer returns on investment ever.
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i love the agency. it's done a lot of good work. about 35 years ago, their director at the time, vince mckelvy, sat down and pretty much pulled together on his own the idea of mineral resource classification. it really hadn't been put out there as succinctly as vince put it out as you see here posted behind me. he said, look, we have two classes of minerals, reserves and resources. the reserves i can identify, map them, drill them, core them, assay that and i can tell you, for example, their measured or inferred value. versus resources that i haven't discovered yet but they're hypothetical or maybe even speculative. he made that distinction and further divided resources into measured and indicated. in the upper left-hand corner you'll see the box reserve, and that's what reserves are.
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they're indicated -- they're actually bankable in the oil industry. you can book reserves, take to the bank, it's collateral. same in the mining industry. so there's a difference between re reserves and resources. the media sometimes will mix them up. we need to keep them straight in our mind. if i tell you we need more critical mineral resources, well, okay, there aren't any more. the resources are what they are. t what we need to is identify more critical mineral reserves and map those and value those. in addition to fixed and geologic time and space, economics will govern whether a mineral deposit is mineable or not. okay? in you look down the column, marginally economic, subeconomic, or no one is interested in it. depending how easy it is to get to. the harder it is to get to, the more money it's going to take.
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as the price for a commodity goes up, there's more money available to get it and this whole chart here can be summarized as an analogy in the oil and gas industry. the oil and gas found now is called unconventional. and that is able to be pulled out of the ground because the price for it will allow companies to go in and make unconventional discovery and production. and so it all ties together that way. let's move on and look at the difference between critical and strategic. here are two just very brief definitions. critical is essential to the economy and strategic is a subset of that. okay? the implications are listed below. the terms are often used interchangeab interchangeably, sometimes they're confused. don't worry about it. it's not that big a deal. there's really no official government definition. the lists of minerals and
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strategic and critical, they differ from time to time and because of economic conditions. they do infer a supply chain which marc is going to get into here in a little while. they also infer that there's foreign imports, either partial or total, so that's of interest to us. and there could be severe economic repercussions if for a shortage of critical minerals and, of course, national security concerns tells you that mineral is strategic. this, as i said, probably one of the best public sources on the topic and, again, the definitions are a little squishy but they say they're minerals that actually dictate the economic health of the nation or strategic minerals will always be critical wut krit but
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critical minerals will not always be strategic. okay? now, here the different metals and elements involved in both classes, and you could read that, again, the books get into it in detail. i don't want to belabor it today. strategic minerals include rare earths. fissionable materials for platinum displays in the military especially. speaking of which national security is urgent. and when we need a mineral, we need it, and basically if you look right here at what is required for two jet engines for a fighter aircraft, it's surprising how much and what, but even more of a surprise is the fact how much of that we have to import, and it's really something that gives us pause as far as our military requirements. i want to go through now a series of maps and just to show you the geology behind critical minerals.
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you know, this is a generalization of polymetallic deposits worldwide. i say the mine locations, the trading partners are fixed in space and time depending what country. i mean, the geology is fixed. they're there, and whoever's in power, whatever. the deposits are there. if we bore down and look at strategic and critical minerals, like platinum, for example, rare earths, there are much fewer deposits and they're scattered. and compare that on this image to copper, you see it almost on every continent. or as the critical platinum and critical rare earth are the black squares and the black dots. much, much more restrictive. now, part of the reason we're concerned is because over the last 60 years, this is what has happened. in the '50s, we were hardly
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reliant at all. if you see here in the lower left corner the numbers of minerals from other countries, many of them friendly. 30 years later in the '80s, we had more and more imports beginning with russia now and even china, and by the year 2014, 60 years later, we're importing dozens and dozens and dozens of minerals. a lot of them from china. many of them from canada, our partner, but some of them from places in the world where we wish we didn't have to be. the countries who are most stable in the world are the best trading partners. the white house has come out, office of science and technology policy, come out with a report in which they give a stability index or governance index involving stable, economics, political, what have you. and basically the best countries are in green. the most stable. the ones in red are to be avoided if possible.
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yet if that's the only source of a mineral, like cobalt from africa, central africa, there's not much you can do about it. closer to home we have the polymetallic minerals in the united states, notice they're mainly in the western states. those locations are fixed by their gee yolgs. we look at a critical mineral like rare earth elements, there's a lot of them. mainly ar advertiseal. one operating in california mountain pass, and the company that ran it declared bankruptcy. right now the united states has zero commercial rare earth production. bear lodge, wyoming, situation, i'm going to get here in a bit, that's our next best and only hope to produce rare earths that we need right now. and i'll end my section by
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showing you this. since there are no commercial mines in operation now, if i go to this slide, you can see, yes, there aren't any from the united states but look at the big 800-pound gorilla down there. we have a 95-plus-percent production from china, and they basically cornered the market on rare earths. japan knows it, we know it, everybody knows it. this is something that although the price came way, way down, still, they have the market and it's something to be reckoned with. i now will bring up marc humphries. he's going to talk about supply and demand of critical minerals. >> thank you, ned. thank you, pat, for the intro. as he said, i work for the congressional research service which is a research arm of congress. we do nonpartisan objective
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policy analysis for members, staff, for members and committee staff. and i've been working on mineral issues for the past 28 years there. this is a little repetitive, here, but this is a definition that was taken from the national research council's book where they try to separate out the difference between critical and strategic saying strategic may be more of the military focus where we know they have a national strategic stockpile, and the critical minerals may focus more on the economic and civilian needs. so a little repetitive. but the main thing with the national research council's report ned talked about was the framework. they established a framework
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that's widely used around the world to define what is criticality, what is the criticality of different minerals. and try to use this matrix here to show supply risk on one and the importance of use and let's say lack of substitutes on the other axis and the higher further right you go, the more critical the material might be. this is just an example on some of the minerals they looked at. to kind of classify. one of the key things that came out of this, this is a fluid or dynamic type of assessment. this was done around 2008, '07 or so, it was redone by the department of energy. which looked at -- using the same matrix to try to classify where the minerals would fit on this matrix. whether they're critical, near critical, not critical.
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but it's fluid so this can change at any time. it can change year to year. what i've done is also highlighted this import reliance chart which is hard to read, but there are 19 minerals that the u.s. is 100% import reliant on at this point. and if you go all the way down, there's many more that they're still import reliant on but not 100%. i've taken several of these minerals and looked at them a little more closely to try to highlight the minerals that are being used in the high-tech world, the clean energy world, and to show where the supply and demand, what it looks like, what it's looked like oef tver the p 20 years. the key thing here, though, is not so much that we're 100% or the 90% or 75% import dependent,
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but the key thing is to know where the minerals are coming from. what countries are supplying them, who are the companies involved in production. 100% import dependent on bauxite is not the same as 100% import dependent on niobium or tantamum. meaning that for bauxite, you have several countries and several companies involved in production. most of the countries are friendly and allied countries. so they're not -- so there's less political risk and perhaps less financial risk involved in production of some of the minerals that we're 100% dependent on. the united states has a framework, they have a policy framework. and this just kind of spells it out here that there's interest in domestic exploration and
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production when it's possible. but there's also interest in developing reliable trade partners, reliable supplies of these minerals. so not just the emphasis on domestic production but also on securing supplies from around the world and get the most reliable access as possible. these are some of the minerals that i'm looking at. these are not classified as strategic or critical minerals necessarily. this is just a list that's been looked at. these minerals have been looked at by the national research council, department of energy. they have been looked at by european union because of their importance, as i mentioned earl earl. the high-tech and clean energy world. also national security and defense. tease are vitally important and
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been looked at more over the last, say, eight or nine years. just as in the past we've looked at supplies of platinum, cobalt, chromium, lead, zinc, you know, minerals that were focused or produced primarily in africa and where the alternative supplier might have been russia or soviet union at the time. this kind of analysis and assessments have been taking place for decades, but the list of men rinerals has changed recently. this indicates the united states is a pretty healthy consumer of these materials. they've gone up in most categories. po most of these have gone up tremendously. niobium, rare earths, tatium.
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but the real story with consumption is not the united states. it's really china. i don't have a slide to show t but -- they have supply chains where they're refining, making metal alloys and products. these are materials that the united states is heavily dependent on as well. this is where folks are looking for generally minerals overall. most of this money is involved in gold. and other -- precious metals. but it just gives you an idea of where the money is being spent. united states is still a destination point even though it has 7% in 2014, but remember, that's 7% of $10.7 billion or
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$750 million. so the amount of exploration money has gone up in the united states. it's been consistent where in 1996 it was about $350 million, where now it's up $750 million. so you can see where folks have been looking. it's just, in many cases, these high-tech metals are either not found or not found in economic quandaries here and they're better, or there are lower cost producers elsewhere in the world that we have trade relations with, okay? here is a snapshot of some of the world reserves of these materials, and this chart and the next chart really just lets
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you know the concentration of where these minerals are loca located. where you can see almost half of the cobalt reserves are in the congo. lithium. two suppliers have well over half of the reserves of lithium. south africa and ukraine have more than half of the manganese depos deposits. china is main producer, you know, even though they have about 42% of known reserves. they still are producing 85% of rare earth materials. tantinum is a little different, it's a little odd. the usgs reports most other reserves are in australia and brazil, but half the production is taking place in rwanda and large part in the congo.
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basically what they're says, they really don't know what's going on with tantalum. australia is not producing any longer. they were producing years ago. and if most of it's coming out of rwanda and congo, what are the reserve numbers? a lot of the information is not available. we really don't know. so here's the production picture here where -- you can tell where -- production side has really changed dramatically in 20 years. it's gone up tremendously. and this is where production has taken place. again, it's the concentration of production. so when the united states is 100% dependent on niobium imports, you got 91% coming from
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one country, you have 95% of the reserves in one country. that's a cause for some concern at least to assess the vulnerabili vulnerability, we're talking about the vulnerability of supply more than how much we're importing. how vulnerable is the united states to disruptiondisruptions it be political instable or labor strikes, catastrophic disasters. if this one source of supply and there's no capacity or little capacity elsewhere, then that can be a concern. let's look down the chart here where we see tantalum again. 50% coming from rwanda, but there's no real assessment of reserves going on there. china, 85%. lithium, between two countries, you have well over 50% here.
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same with cobalt, manganese. three countries dominating production of manganese. and bonadium, china, south africa. so this is -- so the production side is only one side of it. again, there's cause for concern when it comes to vulnerability. assessing the vulnerability of sources of supply. but that's only part of the picture. i put this slide up to show the rest of the picture that has to be looked at. when you assess each mineral on its own, take each one and look at the entire supply chain to see where the vulnerabilities might be along the way. not just in production. production may be bad enough when it comes to rare earth supplies, but then what about the separating reduction to metal, forming alloys, magnets, to manufacture permanent
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magnets. all these things essential. where is the supply chain for each of these minerals that we might consider possible critical minerals? and that, i think, needs to be an area that you need to thrill down on a little deeper. looking at each material that's possibly critical and where the supply chain is. and there's been a lot of concern about building our supply chain for rare earths in the united states. a lot of interest on capitol hill and elsewhere, and, you know, the thing is, what has to happen is to be able to have reliable supply chain wherever it is. so if, in fact, a complete supply chain is not developed on domestic soil, it may be that
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with partnerships, with collaborations, with between countries and companies, reliable supply chains can be built out around the world. as long as it's reliable. that's the key. i think the concern here is that with rare earth elements, this may not be a reliable supply chain for the united states that it depends strictly on the permanent magnets for both the high-tech, clean energy and national security needs of the country. i think that's -- think that's about it. okay. >> all right.
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okay. in the time final leg of the talk, i'd like to bet into some issues that place pressure on our u.s. mining industry such as it is right now. and i'm going through four slides, and we'll talk about them, and you'll see, i think, four different types of pressure being experienced by the mining industry. and then we'll get into what they're going to do about it because they do provide us critical minerals and if they're pressured and they can't, like mollycorp, declare bankruptcy, then we have a bigger issue on our hands. first, i want to spotlight legal pressure. there are lawsuits, single-issue, sometimes environmental issue lawsuits that can stop a company's progress in its tracks. land use limitations fall under that. the cost for litigation are increasing. that's for sure. and we see more and more of it
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here in the center for the study of science where companies are having to litigate their way toward the permit application that they, by law, should have had a right to file for and it didn't happen. the case of the pebble mine in alaska comes to the fore there. certain lands legally are off limits, but, you know, as i said earlier, the geology is fixed. can't do anything about it. so you have to work around that problem. some of these deposits can probably be -- will never be accessed. and that is also an issue and i'll get to that in a minute. let's look at access now. federal land withdrawals are one of the probably worst ways to stymie access to federal minerals. withdrawal from federal lands often happens without proper accounting for the inventory of
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the minerals and depending on who's in charge, the minerals may not be a priority to them. but deposits once withdrawn can never be accessed, and that's something that maybe could be turned around, but you could go back into the legal bin. the new exploration programs have to be initiated, and have to be relocated once you're going to withdraw lands. and without the exploration, as marc pointed out here, we can't really fully assess the balance of our mineral deposit checkbook, so to speak. we need to explore for even if we're not going to mine, we need to know what it is that's in the ground. time is another pressure felt by the mining industry because if you look at these stats, in the last 16 years, including this year, only 14 major metal mines,
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remember those polymetallic mines i showed you, 14 of them, less than 1 a year, were started. and the time to obtain a permit to start those mines is increasing more and more each year. now, a minimum is six years. maximum can be over two decades. this is all documented, well documented. the average is about ten years. and i'll show you that. but basically, those times don't even include the pre-mining exploration and the environmental baseline studies that have to be done as well as feasibility studies. the fourth type of pressure is financial, because when a company has a deposit and the permit is not forthcoming, every month, year of delay the value of the deposit goes down, down, and down more. okay. that is very critical to companies. the other thing is that the price of the commodity over long
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periods of time is shifting. it's like a moving target, and it's hard for them to plan. the declining value of the mine can be as much as a third. maybe even a half if the time delay is significant. and although marc showed pretty robust exploration dollars spent in the united states, the decreasing investment interest is waning with the increasing permit application time that's required. that is a fact. now, this isn't ned mamula's numbers. the gao did a report that came out earlier this year and everything you have seen in the slides is pretty much documented in the report. let me highlight some of the things that they have come up with. first of all, three key findings. and i think it's important. first, the quality of mine plans submitted to the federal land management agency in charge is sometimes very substandard.
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you may have a junior mining partner submit a plan, they don't have any experience. maybe it's on the back of an envelope type thing. no. homework needs to be done. regulations need to be followed. and a mine plan needs to be dutifully filled out and sent in. okay, so there is some fault on the industry's side. on the other side of the ledger, we know for fact gao has pointed out and documented the poor allocation of land management agency resources. that's documented. and the way they did it is they looked specifically for service in blm, and they have these examples that i'll show you in a minute. third, agencies are not effective at managing the mine plan review process. it can really get -- it has gotten out of control. i remember when i was with the usgs. we did all of the work out of the usgs conservation division. all the mine plan permitted and approvals.
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review of the drilling plan, environmental plan, mine plan. everything. it was done promptly, usually got out the door in time. we had a pretty good relationship with industry. things got done, environmental law. we were underneath the law. everything was handled. but as that was taken way and the bureau of mines was dissolved and the land management agencies don't have enough geologists to staff up, they get further and further behind despite their best efforts. the gao report main graphic is this one. and it shows during a 4-year period of 2010 to 2014, they looked at about 60 mine plan permits submitted between the service and blm. here's the allocation of the mine plan approvals, in terms of the time it took to do the approval. two things about this chart, number one, it ends all the way to the right by saying more than
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48 months. all right. that's four years and you don't see all the way up to the 6, 10, and 20-year figures that i gave you earlier. so that's sort of artificially truncated there. okay. we'll give them that. what you don't see here, though, and you wouldn't know if i didn't tell you is a lot of these plans permit -- especially the ones that were approved quickly are for minerals such as zeolites, clay, sand and gravel, and other such materials that aren't critical. all right. they're more usually and quickly permitted. whereas the more critical and polymetallics take time. remember i said, since 2000, there's only been 14 polymetallic mines approved. so that factors into this chart. it's not explained as such. when you compare the united states to the rest of the world, here's where we stand.
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we are in the seven to ten-up category for permitting. australia and canada have been mining longer than we have, perhaps, and they really know how to handle it. their permitting time is short. chile, probably one of the world's largest copper producers is sort of right in the middle between two and seven. other countries around the world, you'd be surprised, are getting onboard with environmental restrictions, and that's a good thing. and it's taking more time, but we are probably by far the worst as far as the time taken, it takes for a permit to be issued. now, let's look, for example, at a case study, and this is called the bear lodge high grade rare earth element deposit in eastern wyoming. this is very, very important, and no one here probably has the intimate knowledge of this. i spent some time with the officers of this company.
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here's what they told me, and then i researched it on my own. so when i melded everything together, here's what i found. these red dots here are the operating rare earth element mines on this planet. notice most of them are in china. one or two in india. one up there in finland. the mountain pass mine in california, you see there, is no longer operating. so that's out of production. the next slide now you see the advanced rare earth projects worldwide. these are not mines now, but these are projects where they're trying to become a mine. and you notice bear lodge is there in wyoming. they are working on that as best they could. australia is also trying to gear up as is south africa. even denmark is working on
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greenland. there's some deposits there. but the thing that makes bear lodge, wyoming, not only a critical mineral but a strategic mineral deposit are the following. first of all, as marc indicated, china produces most of the rare earths and he also mentioned they consume 60% of what they produce. they're going -- they themselves are going to have to import by 2020. so we're -- how is that going to happen? on top of that, we have the mollycorps bankruptcy last year. no production. and we find china is buys up the best of the rest worldwide. that we know for a fact. the bear lodge deposit right now is classed as the richest rare earth deposit in the western hemisphere, maybe the world. it is so important to the department of defense that they want the operation -- they want the mine operating now. and i'll get to that in a minute.
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let's look at bear creek -- bear lodge -- quickly. i'm really surprised by the small, relatively small footprint of this operation being 900 acres over a 45-year lifespan. that's interesting to me. and as i said, it's the most advanced project for rare earths but it's not yet a mine. and there's reason for that. i guess i think you see where i'm going with this. there has been a whopping problem with the permitting process for bear lodge. and let me walk you through this slide and try to explain why there is a problem. number one, they began work in 2004, so they have been up there for 14 years. they have run into a land management agency that does not exercise in a timely manner or in the spirit of nepa, their authority as the lead agency.
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there also is an anti-project agency bias in the employees that has to do with the development of that deposit. and i would like to point out that just this past weekend in the paper, there was an expose about the foot dragging and outside collusion of employees from the epa with regard to the pebble mine in alaska. and legal deposition has it dead to rights. the fact that the employee admitted it. so this is not just unique to pebble. it goes on, whether we like it or not. whether we think it doesn't, it does. the additional time was lost by the owners of the deposit because of the restrictions asked of them. for example, they were asked to put tailings back in the mine while they're mining.
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they were asked to build too steep, too long access roads across private property for which they could not obtain permission. there's been an over year-long delay the environmental statement, and in the end, this is what happened. rare earth resources corporation basically asked the federal government to suspend because they no longer had the cash to continue. d.o.d. is furious. absolutely furious. and this is why. the virginia class ballistic missile submarine replacement from the ohio class to the virginia class is going to occur, and it's going to occur by replacing the nuclear powered mechanical drive in the ohio class with the rare earth magnet drive stealthy drive in the virginia class.
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this is going to require so much rare earth element material, well, not so much, whatever. here's the point. that number is classified. the only source of that material on this planet for the virginia class ballistic missile subs is either from the australians, who are feverishly working to get up and running on their own, or guess what, china. do you think for a minute china is going to sell rare earth elements to the department of defense for the virginia class? probably not. in fact, they're working on their own stealthy sub. and that's something that d.o.d. is also struggling with. considering the bear lodge example, we're going to wrap up here for questions, i want to talk to you briefly about how better we can secure our mineral future because something clearly has to be done. number one, we really need in
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this country to improve federal stewardship. we really do. in fact, certain states do a magnificent job with stewardship. they know how to land manage. they know how to permit. they know how to collect royalty rental. they know how to lease. they understand reclamation, and they understand the concept of malleable land use. if i have a quarry here and i'm done quarrying, i fill it with water, i have a body of water, i can stock it with life. moderate land use is over a century old and sometimes it would be better just to forget about it as far as the land management agency goes. a typical bom permit takes almost a year. now, this isn't ned mamula. again, these are statistics from gao and others.
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up in north dakota, you can get a permit for drilling or whatever in about ten days. now, there's congressional legislation right now pending on this, and we'll see how that happens, but just to give you an idea, the legislation for minerals is inside of the energy bill. so the energy bill passed the senate and then, of course, it's in conference now and it's maybe going to be signed, maybe not. but the hope of the mineral bill being passed depends on its host, the energy bill and we'll see how it goes. in the long term, what can we do to appreciate our reliance on critical minerals? and the first thing is that we are reliant, and they portend to our economic health. and secondly, our high-tech standard of living. you know, if i want these things, these gadgets, i've got to have those minerals. no way around them.
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there are no substitutes for them yet. we need also to map all of the domestic deposits. i remember when i started with the survey, their mission from 1879 by president hayes was to go out and map all the lands and survey all the materials located therein. and that hasn't been done. they've strayed a little bit from -- they strayed from their mission and that needs to be corrected. we need to also consider disallowing more of these large, multimillion acre withdrawals. it does no one any good, and again, we have taken the land out. we don't know what the minerals are. now, if there's a crisis, we don't know what our bank balance is in terms of mineral wealth. we need to identify also geopolitically correct alternatives to imports. and i showed you how much we've grown in import dependence and so has marc, and we're going to do that.
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industry, universities can form partnerships and some of the good ones have been recently, for examples, d.o.e. and penn state, my alma mater, partnered up. and penn state now researchers are pulling rare earth elements out of coal dust and coal debris that companies don't want or would get rid of. they're pulling it out without any effort using ion exchange technology. they're pulling out a half a percent, and with no effort, almost no additional effort, they're prepared to pull out 2% and on and on. so that's coming. an additional legislation would maybe support industry/university projects and leave the government out of it. i draw the analogy to you here in our closing minutes to the u.s. energy picture and environmental stewardship. you know, ladies and gentlemen, we are the number one producer of oil and gas in the world right now. we clawed and scratched our way to the top.
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and by analogy, our minerals and mining and critical mineral industry can do the same thing. we can improve ourselves to the top of the heap because mining today is not like your grandfather's mining from years and years ago. it's responsibly done, environmentally sensitive. and i have seen some of these sites, so has dr. michaels. you know, people, these companies do not want bad press. when they mine or drill and produce resources. they want clean, nice, good media coverage for the good work they've tried to do. in summary, we need a better way to get a huge commitment to our industry just like they have given to us. and we want to start with improved federal stewardship.
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and i think what i'll do, ladies and gentlemen, is i'll leave it there, and we'll take, marc and i, any questions. and i thank you very much for your attention. >> when we get a question, please wait to be called on. and wait for the microphone. the microphone is walking back there and it will be walking toward you. and to announce your name and affiliation. i don't know why we like that so much, but we really do. i learned something at this talk. i learned a new phrase, which is geopolitically correct. and i don't know where i'm going to use it, but geopolitical correctness is really should be studied at a lot of universities very soon. so, let's have questions. mr. keely. >> all my life -- >> you are with? >> you. >> ah. >> the science unit.
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kay cato. all my life, i have been told we're about to run out of copper, we're about to run out of this, out of that. are we actually about to run out of these or is this a strategic thing that we don't want the chinese controlling our resources? >> dr. keely, remember back when the slide i showed you the distinction between reserves and resources? okay. what really is hard to wrap your head around sometimes is the more we produce of a commodity out of the ground, the more often the amount of reserves goes up, because as we produce, we discover more and better and more ways to discover but more. so it's like a squirrel cage. so for some of the commodities like copper, we're in no real danger of running out, although we still do import some. and you know, as marc said, there are supply chains.
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for the more critical ones, we haven't done enough exploration on federal lands because we can't get in there. remember i told you about access issues? so until we start to really inventory more, there is the possibility of running out. i hope that answers your question. >> down here. >> thank you. very interesting presentations. i'm gary meritt, ex state department. i'm curious about two things. one, there's been no mention of the possibilities with recycling. i mean, it's no doubt a small percentage, but from critically strategic perspectives, recycling has got to be on the table, i should think.
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the second is my confusion about if it is a critical -- rare earth resources are critical for virginia class propulsions systems, why is it that it has to be a private sector or a private corporation? is that the only way we can think about it? if it is so critical, are there not federal options somehow that could be on the table? i know that's heretical in this setting to ask that question, but a word or two i'd appreciate. >> you want to take it? you want to do it? then i'll come back. >> yeah. >> on the recycling issue, there's an effort under way at
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the department of energy to look at recycling of critical or possible critical minerals and there's a five-year project taking place now looking at recycling, material efficiency, and substitutions of these clean energy or high-tech minerals. elsewhere in the world, in europe, in japan, recycling is much bigger when it comes to these particular materials. because japan was hit with the 2010 issue that they really dug in deeper in terms of looking at all possibilities of securing reliable supplies of these materials. particularly rare earths. so they were looking at urban mining, is what they call it, where they could do better separating out some of the minor metals. some of the more valuable stuff like the gold or platinum, these
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certain catalytic converters. these thingsthy can get, but getting the other materials has been difficult. but i think they pursued it in a lot bigger way than we have in the united states. >> in addition, i mentioned the university/industry partnerships are starting to yield some very positive results. as i said, penn state has shown with their research program, they're pulling rare earths out of coal waste, which is good. recycling certainly should be looked at more. also, there's plenty of room for research on substitute materials, because if we can find substitutes, we should do it and we should do it as quickly as we can. now, back to your other question. listen, i don't want you to go out the door thinking that, you know, we were slanted one way or the other. this is a situation where, you
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know, we have few options, and we're working on it, but one of the things about it is if we don't mine in this country and we rely on imports from the strictly environmental we rely, from the strictly environmental standpoint, it becomes a nim by project. someone else is mining it and those other places in the world don't have any -- or much less environmental control than we do here. so it becomes a net negative as far as the environmental quality when you cokeep mining off shor. probably better to open up some lands and at least see what is there and under strict control do mining here. i think that's probably the best way to look at that. in addition to the recycling, the material substitutes and also the -- what i'm calling advanced mineral processing,
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there is a big, big field of research there is available to industries and universities alike. all right. >> over here. >> that answer was geopolitically correct. >> i'm nicholas distill, an independent social scientist and author. could you comment on the dark side of this. is there a vulnerability to terrorism because of these critical things and is there a black market? i saw recently on national geographic that there are miners in africa who going into closed mines in dangerous conditions and doing mining for their own personal gain, is any of that going on in this rare earth sector? >> i'll take part of that. there is a -- an illegal market
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for some of these materials. that's all i can say. in china, the rarer market is -- the underground market is big. it may represent -- maybe as much as 25% of what is being -- what is being produced in china. and they allow this -- the government would allow this because they know for some of the provinces, they employ people. it's a very contested issue. it's not necessarily that they could easily shut it down. they may not want to shut it down. it puts people to work. but there is the environmental contamination issue that is becoming a bigger concern with the illegal operations. in africa, in the congo, i read in one journal, resources policy, where they identified titanium struggled out through
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rwanda and bought by china possibly and it just goes unaccounted for. so a lot of the material isn't even accounted for. but there are these underground structures already in place for a lot of this material. >> okay. and then led me add to what my colleague just said. you've all heard conflict diamonds and of course a lot of the strategic minerals have their conflict problems attached to them. and then of course, mark had explained about supply chain vulnerabilities coming out of some of the places like central asia or africa. and know for a fact -- i know for a fact from talking to my colleagues that tesla motors have washed their hands of earths, they're going to convert to direct drive. they are getting away from that and they don't want anything to do with the conflict -- the
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environmental pillaging or supply chain threat. similarly, siemens, the big german conglomerate, said we're done with rare earth. we're going with wind power turbines and we don't need the rare earths and we won't put up with the environmental pillaging. so it is starting to backlash. but so depending on what part of the globe it comes from -- and i showed that map of the green and red colors, the redder it is, probably the better to stay away from. >> could i ask a question for -- i don't quite understand part of the answer. your answer where you say that tesla is saying we're not -- we're not going to be using rare earths because we're going to direct drive. can you explain? >> they are just going to reconfigure the monoters so they -- the motors so they don't rig the magnets.
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i'm not a tesla aficionado and they are getting away from rare earths and so is siemens. >> that is really the way markets tend to work. >> yep. >> if that is a good thing. that's why we have them. because we don't have everything. it looks like we'll take one more question, unless nobody has one? and i will take the liberty -- todd? >> we have a question. >> the microphone is coming your way. >> thank you very much. >> name. >> todd wiggins, local citizen and appreciate the talk. there was a -- speaking of the so-called conflict mineral issue, there was a recent protest at the apple store in one of the grand openings where a group was talking -- sort of out front. and i don't know if that continued, that was a couple of years ago. so how do you think that is affecting their image as far
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as -- >> let me try to shed some light on it. the author of this book had a section in here on apple and the conflict minerals used to -- the conflict minerals used to design gadgets that we like. he said apple was the 85th largest company in the world and within the last five years they catapulted to the largest company in the world. and critical minerals are to apple corporation as oil is to exxon. in fact apple blew past exxon in size. part of the apple apparatus is looking feverishly for material substitutes to get away as fast as they can, because if you recall, i showed you the periodic table, every year more and more and more, so they are making themselves like tesla or siemens, more and more vulnerable as they go wide, let's say.
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so what they are really trying to do is partner with universities and find material substitutes. and ceramics is a big area of research and the recycle, and the mineral processing. if it i could pull out so-called conflict minerals or whatever you want to call them out of coal dust or somebody else's trash, good to go. but they are thinking about it, as are many other companies. who want to have an image of environmental responsibility. and i think that's good. okay, we want to be environment ll responsible. but when it comes to shortages, sometimes our back is against the wall and the question is how are we going to handle it, what are we going to do about it? >> and my guess is that apple probably wants to reduce its cost. and supplies are low. costs are high. so we innovate. and that is what we do as human beings, i seem to think. we have a reception for you upstairs in the winter garden that will begin forthforthwith.
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and you needo do is put your name tag back on or something like that so we know who you are and we'll see you upstairs. >> thank you. [ applause ] [ hearing concluded ]
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c-span washington journal live every day with news and policy issues that impact you. coming up saturday morning, politico education reporter maggie severns joins us by phone to address the rising number of student loan defaults. and then new york times neal irwin will examine the latest job numbers released today and the impact on the health of the economy. also coral daven port, new york times energy and environment correspondent will discuss her story on an unusual $48 million grant awarded to relocate a entire community in louisiana struggling with the impact of climate change. the first such grant of it's kind. and looking at the high school
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