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Tightening of Chinese Mineral Exports Worry U.S. Manufacturers...and Congress

November 2011...The Fabricator magazine

     As if U.S. manufacturers don't have enough China-related manufacturing barriers, here is another: China's stranglehold on the production of rare earth minerals. That was the subject of a recent hearing in a House Foreign Affairs subcommittee. We are talking here about arcane minerals such as cerium, neodymium, and dysprosium which are critical to the manufacture of advanced manufactured goods, such as cell phones, fluorescent lights, hybrid engines, airplanes, wind turbines, and defense guidance systems. China controls 97 percent of the  manufacture of those minerals, and, according to testimony recently given at those House hearings, China is dramatically reducing its exports of rare earth minerals and expanding its supply of the same to its domestic manufacturers. 
     "Since July 2010 China has cut export quotas by 40% compared to 2009," says John Galyen, President, Danfoss, North America, a leading global manufacturer of compressors, controls and variable frequency drives for high efficiency air-conditioning, refrigeration, heating and motion systems. The company has 12 U.S factories. "Their reported purpose to do so was to protect the environment and licensors," Danfoss told the Foreign Affairs Asia and Pacific Subcommittee in September. "It is evident that in doing so they preserve the resource for their future internal use--to preserve it for the Chinese economy."
     Rep. Donald Manzullo (R-IL), chairman of the Subcommittee, says, “The U.S. Department of Energy is conducting cutting edge research into rare earth alternatives, but a more comprehensive effort is needed." He has co-sponsored a bill by Rep. Mike Coffman (R-CO) called the Rare Earths Supply Chain Technology and Resources Transformation Act of 2011(H.R. 1388). That bill was referred to three committees for action last April (Foreign Affairs was not one of them) and none of the three, including Natural Resources, on which Coffman serves, has held a hearing on the bill, much less passed it. Natural Resources did hold hearings last June on another bill, National Strategic and Critical Minerals Policy Act of 2011(H.R. 2011), which essentially requires the Department of the Interior to prepare a report on U.S. mineral production more broadly. A subcommittee passed the bill at the end of July and nothing has happened since then.
     Steve Duclos, Chief Scientist and Manager of Material Sustainability at General Electric Global Research told the Natural Resources Committee in June that the National Association of Manufacturers, on whose behalf he was testifying, said the NAM welcomed congressional actions that "not just draw attention" to shortfalls in mineral supplies " but attempt to resolve them as well." He seemed to be damning H.R. 2011 with faint praise. He asked for legislation by Congress that mandates a comprehensive solution that takes into account: (1) the domestic mining and processing of these minerals; (2) strengthening of the workforce; (3) government incentives for creating alternative manufacturing and materials technologies; and (4) recycling of these minerals that we can truly address this current problem with rare earth minerals.