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Rare Earth Minerals and 21St Century Industry Hearing RARE EARTH MINERALS AND 21ST CENTURY INDUSTRY HEARING BEFORE THE SUBCOMMITTEE ON INVESTIGATIONS AND OVERSIGHT COMMITTEE ON SCIENCE AND TECHNOLOGY HOUSE OF REPRESENTATIVES ONE HUNDRED ELEVENTH CONGRESS SECOND SESSION MARCH 16, 2010 Serial No. 111–86 Printed for the use of the Committee on Science and Technology ( Available via the World Wide Web: http://www.science.house.gov U.S. GOVERNMENT PRINTING OFFICE 55–844PDF WASHINGTON : 2010 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 COMMITTEE ON SCIENCE AND TECHNOLOGY HON. BART GORDON, Tennessee, Chair JERRY F. COSTELLO, Illinois RALPH M. HALL, Texas EDDIE BERNICE JOHNSON, Texas F. JAMES SENSENBRENNER JR., LYNN C. WOOLSEY, California Wisconsin DAVID WU, Oregon LAMAR S. SMITH, Texas BRIAN BAIRD, Washington DANA ROHRABACHER, California BRAD MILLER, North Carolina ROSCOE G. BARTLETT, Maryland DANIEL LIPINSKI, Illinois VERNON J. EHLERS, Michigan GABRIELLE GIFFORDS, Arizona FRANK D. LUCAS, Oklahoma DONNA F. EDWARDS, Maryland JUDY BIGGERT, Illinois MARCIA L. FUDGE, Ohio W. TODD AKIN, Missouri BEN R. LUJA´ N, New Mexico RANDY NEUGEBAUER, Texas PAUL D. TONKO, New York BOB INGLIS, South Carolina STEVEN R. ROTHMAN, New Jersey MICHAEL T. MCCAUL, Texas JIM MATHESON, Utah MARIO DIAZ-BALART, Florida LINCOLN DAVIS, Tennessee BRIAN P. BILBRAY, California BEN CHANDLER, Kentucky ADRIAN SMITH, Nebraska RUSS CARNAHAN, Missouri PAUL C. BROUN, Georgia BARON P. HILL, Indiana PETE OLSON, Texas HARRY E. MITCHELL, Arizona CHARLES A. WILSON, Ohio KATHLEEN DAHLKEMPER, Pennsylvania ALAN GRAYSON, Florida SUZANNE M. KOSMAS, Florida GARY C. PETERS, Michigan JOHN GARAMENDI, California VACANCY SUBCOMMITTEE ON INVESTIGATIONS AND OVERSIGHT HON. BRAD MILLER, North Carolina, Chair STEVEN R. ROTHMAN, New Jersey PAUL C. BROUN, Georgia LINCOLN DAVIS, Tennessee BRIAN P. BILBRAY, California CHARLES A. WILSON, Ohio VACANCY KATHY DAHLKEMPER, Pennsylvania ALAN GRAYSON, Florida BART GORDON, Tennessee RALPH M. HALL, Texas DAN PEARSON Subcommittee Staff Director JAMES PAUL Democratic Professional Staff Member KEN JACOBSON Democratic Professional Staff Member TOM HAMMOND Republican Professional Staff Member (II) C O N T E N T S March 16, 2010 Page Witness List ............................................................................................................. 2 Hearing Charter ...................................................................................................... 3 Opening Statements Statement by Representative Bart Gordon, Chairman, Committee on Science and Technology, U.S. House of Representatives ............................................... 11 Written Statement ............................................................................................ 12 Statement by Representative Brad Miller, Chairman, Subcommittee on Inves- tigations and Oversight, Committee on Science and Technology, U.S. House of Representatives ................................................................................................ 11 Written Statement ............................................................................................ 14 Statement by Representative Paul C. Broun, Ranking Minority Member, Sub- committee on Investigations and Oversight, Committee on Science and Technology, U.S. House of Representatives ....................................................... 15 Written Statement ............................................................................................ 15 Witnesses: Dr. Stephen Freiman, President, Freiman Consulting, Inc. Oral Statement ................................................................................................. 17 Written Statement ............................................................................................ 21 Biography .......................................................................................................... 24 Dr. Steven J. Duclos, Chief Scientist and Manager, Material Sustainability, General Electric Global Research Oral Statement ................................................................................................. 25 Written Statement ............................................................................................ 26 Biography .......................................................................................................... 30 Dr. Karl A. Gschneidner, Jr., Anson Marston Distinguished Professor, Depart- ment of Materials Science and Engineering, Iowa State University Oral Statement ................................................................................................. 30 Written Statement ............................................................................................ 33 Biography .......................................................................................................... 46 Mr. Mark A. Smith, Chief Executive Officer, Molycorp Minerals, LLC Oral Statement ................................................................................................. 47 Written Statement ............................................................................................ 49 Biography .......................................................................................................... 61 Mr. Terence Stewart, Esq., Managing Partner, Stewart and Stewart Oral Statement ................................................................................................. 62 Written Statement ............................................................................................ 63 Biography .......................................................................................................... 68 Discussion Early Warning for Material Supply Problems ................................................... 68 How to Compete With China .............................................................................. 70 Prioritizing Responses to Shortage ..................................................................... 70 Role of Federal Agencies ...................................................................................... 71 Improving Research Infrastructure .................................................................... 73 Funding for Rare Earth Research ...................................................................... 73 Domestic Sources of Rare Earths ....................................................................... 74 Expanding U.S. Workforce .................................................................................. 75 Dependence on Foreign Products ........................................................................ 75 (III) IV Page Maintaining a Complete Supply Chain .............................................................. 76 Keeping Manufacturing in the U.S. ................................................................... 77 Balancing Private and Public Needs .................................................................. 78 Chinese Industrial Strategy ................................................................................ 78 Funding Models for Materials Research ............................................................ 78 Timeframe for Re-Starting Domestic Production .............................................. 79 Appendix: Answers to Post-Hearing Questions Dr. Stephen Freiman, President, Freiman Consulting, Inc. ................................ 82 Dr. Steven J. Duclos, Chief Scientist and Manager, Material Sustainability, General Electric Global Research ....................................................................... 83 Dr. Karl A. Gschneidner, Jr., Anson Marston Distinguished Professor, Depart- ment of Materials Science and Engineering, Iowa State University ............... 85 Mr. Mark A. Smith, Chief Executive Officer, Molycorp Minerals, LLC .............. 87 Mr. Terence Stewart, Esq., Managing Partner, Stewart and Stewart ................ 88 RARE EARTH MINERALS AND 21ST CENTURY INDUSTRY TUESDAY, MARCH 16, 2010 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON INVESTIGATIONS AND OVERSIGHT, COMMITTEE ON SCIENCE AND TECHNOLOGY, Washington, DC. The Subcommittee met, pursuant to call, at 2:01 p.m., in Room 2318 of the Rayburn House Office Building, Hon. Brad Miller [Chairman of the Subcommittee] presiding. (1) 2 3 HEARING CHARTER Purpose The United States, as part of its strategy to reduce emissions from electricity gen- eration and transportation, is investing significant funds in renewable energy tech- nologies such as wind power and hybrid vehicles. The American Recovery and Rein- vestment Act provides $2.3 billion for advanced energy manufacturing facilities, in- cluding wind turbine manufacturing plants. The Act further makes available $2 bil- lion ‘‘. for Advanced Battery Manufacturing grants to support the manufacturing of advanced vehicle batteries and components . .’’ Yet these investments may fail to prompt the desired outcome—a buoyant industry producing renewable energy systems—for lack of rare earth minerals.1 The United States finds itself dependent on the People’s Republic of China for a commodity without which it would be hard to compete in high-technology industries. With a near-monopoly in supplies of rare earths, the Chinese government threatens to limit exports and tries to induce manufacturing firms to locate their facilities in Inner Mongolia. The main American supplier is seeking funding to restart
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