Ucore Rare Metals Inc. V.UCU

Ucore/Materion Testimony Critical Minerals Policy Act 2013

[Lightningmillz]

  [Senate Hearing 113-192]
[From the U.S. Government Publishing Office] S. Hrg. 113-192 CRITICAL MINERALS POLICY ACT ======================================================================= HEARING before the COMMITTEE ON ENERGY AND NATURAL RESOURCES UNITED STATES SENATE ONE HUNDRED THIRTEENTH CONGRESS SECOND SESSION TO RECEIVE TESTIMONY ON S. 1600, THE CRITICAL MINERALS POLICY ACT OF 2013 __________ JANUARY 28, 2014 Printed for the use of the Committee on Energy and Natural Resources ---------- U.S. GOVERNMENT PRINTING OFFICE 86-877 PDF WASHINGTON : 2014 ----------------------------------------------------------------------- For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free [phone]; DC area [phone] Fax: [phone] Mail: Stop IDCC, Washington, DC 20402-0001 COMMITTEE ON ENERGY AND NATURAL RESOURCES RON WYDEN, Oregon, Chairman TIM JOHNSON, South Dakota LISA MURKOWSKI, Alaska MARY L. LANDRIEU, Louisiana JOHN BARRASSO, Wyoming MARIA CANTWELL, Washington JAMES E. RISCH, Idaho BERNARD SANDERS, Vermont MIKE LEE, Utah DEBBIE STABENOW, Michigan DEAN HELLER, Nevada MARK UDALL, Colorado JEFF FLAKE, Arizona AL FRANKEN, Minnesota TIM SCOTT, South Carolina JOE MANCHIN, III, West Virginia LAMAR ALEXANDER, Tennessee BRIAN SCHATZ, Hawaii ROB PORTMAN, Ohio MARTIN HEINRICH, New Mexico JOHN HOEVEN, North Dakota TAMMY BALDWIN, Wisconsin Joshua Sheinkman, Staff Director Sam E. Fowler, Chief Counsel Karen K. Billups, Republican Staff Director Patrick J. McCormick III, Republican Chief Counsel
 Statement of Ken Collison, Chief Operating Officer, Ucore Rare Metals, This is written testimony submitted for the hearing record on S.1600, the Critical Minerals Policy Act. My name is Ken Collison, Chief Operating Officer for Ucore Rare Metals, Inc. (Ucore). Ucore is actively developing the Bokan- Dotson Ridge Rare Earth Project (project) located on Prince of Wales Island in Southeast Alaska. The project is in the final stages of evaluation and design and is anticipating initiating the NEPA permitting review process early in 2014. The Bokan- Dotson Ridge project is particularly enriched with heavy rare earth elements, including the critical elements Dysprosium, Terbium and Yttrium. Approximately 40 percent (by weight) of the rare earth elements contained on the Dotson Ridge property are heavy rare earths elements, as disclosed in the Company's Nl43-101 compliant Preliminary Economic Assessment, released in January 2013. Ucore sincerely appreciates the recent initiatives in Washington to address the increasing lack of availability of rare earth products and magnet-making materials for domestic military and defense applications. Concerns regarding the withdrawal of ongoing supplies of Critical Rare Earth Oxides produced almost exclusively in China and consumed by US military contractors, has attracted significant legislative initiatives. The Critical Minerals Policy Act, submitted by Senators Lisa Murkowski (R- AK), Ron Wyden (D- Ore), Mark Udall (D- Col.), Dean Heller (R- Nev.) and 13 others, if fully enacted, will prevent supply shortages of critical materials and reduce US dependence on foreign sources through the revitalization of a domestic supply chain, including domestic production from near term facilities such as the BokanDotson Ridge project in Alaska. The bipartisan bill outlines mineral-specific actions for several elements, including yttrium and scandium, materials scheduled to commence production at the Bokan project by as early as 2017. Dotson Ridge is the richest domestic source of three heavy rare earth elements-dysprosium, terbium, and yttrium-which are critical to several advanced weapon systems, such as stealth helicopters and precision-guided weapons. Both dysprosium and yttrium are critical to multiple US defense systems. Dysprosium is a crucial ingredient in neodymium-iron-boron magnets as a means of increasing coercivity, applications of which include aircraft actuator motors in flight control systems, landing gear, and munitions. Yttrium is critical to the defense industry applications such as the manufacture of various ceramic and glass materials required in jet engines. The Joint Strike Fighter (JSF) development program relies on both Dy andY as critical input components. Currently, all of the world's commercially-available heavy rare earth elements are produced in China. Ongoing production and export quotas have limited the availability of these materials to global markets. According to a March 2012 report from DOD, yttrium, terbium, and dysprosium are all considered to be ``critical to the production, sustainment, or operation of significant United States military equipment,'' as well as ``subject to interruption of supply, based on actions or events outside the control of the government of the United States.'' Yttrium, in particular, was shown to be in deficit when considering projected future domestic supply. Thank you for the opportunity to submit testimony on this important bill. 
  Statement of Materior Corporation, Mayfield Heights, OH, on S. 1600 The Materion Corporation (Materion), headquartered in Mayfield Heights, Ohio, respectfully submits the following comments to the United States Senate Committee on Energy and Natural Resources regarding S. 1600, the Critical Minerals Policy Act of 2013. Materion supplies highly engineered advanced enabling materials to leading and dynamic technology companies across the globe. Our product offerings include precious and non-precious specialty metals, precision optical filters, inorganic chemicals and powders, specialty coatings and engineered clad and plated metal systems. Our products, services and expertise help enable our customers' technologies. We supply sophisticated thin film coatings for hard disk drives, specialty inorganic chemicals for solar energy panels, bio- compatible materials for implantable medical devices, specialty alloys for miniature consumer electronics components, optical filters for thermal imaging, critical components for infrared sensing technology, special materials for LEDs and much more. Materion is the free-world's only integrated ``mine-to-mill'' supplier of beryllium-based products. Materion owns and operates its beryllium mine in Delta, Utah, and has characterized a 70+year supply of beryllium ore. Small deposits of beryllium ore are found in Kazakhstan and China, but Materion mines in excess of 70 percent of the world's supply. Currently, China does not export its supply of beryllium. Beryllium is a metallic element that has extremely unique properties. To name just a few, it is onethird lighter than aluminum, has six times the specific stiffness of steel and is transparent to X- rays. Adding up to 2 percent beryllium to copper imparts springiness comparable to steel and corrosion resistance like stainless steel, yet retaining the electrical and thermal conductivity properties of copper. For these and other reasons, beryllium is the only material to be defined by the U.S. Department of Defense (DoD) as both strategic and critical to the United States. Beryllium is also defined as a critical material by the European Commission. Beryllium materials are used in research and industrial applications where reliability and superior performance are required. The final seal capping the leaking oil well in the Gulf of Mexico was a large ring of copper beryllium. The James Webb Space Telescope, launching this decade, has 16 beryllium mirrors to capture the images from space. The 2012 Nobel Peace prize for physics used atoms of beryllium to create a computer chip with the computing capacity of every computer on earth today. In short, beryllium can do things that no other element on earth can do. Materion offers the following comments on S. 1600, the Critical Minerals Policy Act of 2013. 1. Materion strongly supports developing a critical minerals policy as US leadership in innovation and technology is inextricably linked to reliable access to and use of critical minerals. As stated, the intent of S. 1600 is, ``To facilitate the reestablishment of domestic, critical mineral designation, assessment, production, manufacturing, recycling, analysis, forecasting, workforce, education, research, and international capabilities in the United States, and for other purposes.'' As a producer and key supplier of critical materials, Materion sees great value in US policies that would strengthen both domestic capabilities and international trade to ensure adequate supply of these materials. Materion supports these goals. 2. Beryllium should be designated as a critical mineral under the provisions of the Critical Minerals Policy Act of 2013. According to the text of S. 1600, the Secretary of Interior is directed to develop a draft methodology for assessing and determining a list of not more than 20 critical minerals. The methodology would be published in the Federal Register for notice and comment. The assessment would be based on potential international supply restrictions and the importance of use, including energy technologies, defense, agriculture, consumer electronics and health carerelated applications. This limited interpretation of what would constitute a critical mineral under the bill and in the implementing regulations may disqualify beryllium even though it is of critical importance for use and innovation in the energy, defense, consumer electronics and health care marketplace. Beryllium should not be penalized by a designation protocol because Materion has worked hard to ensure an adequate long- term supply. Unnecessary over-regulation of beryllium is the greatest threat to the key markets for beryllium and the future sustainability of a US supply. Worldwide supply of beryllium to the free world comes primarily from a single source in the US-- Materion. Small deposits of beryllium ore are found in Kazakhstan and China, but Materion mines in excess of 70 percent of the world's supply. China does not export its supply of beryllium. The company estimates a 70+year supply of beryllium ore. Since beryllium ore is mined and processed domestically, the primary current threat to US supply is not due to foreign trading partners restricting imports of this critical mineral into the US. Rather, unnecessary over-regulation of beryllium is the greatest threat to the key markets for beryllium and the future sustainability of a US supply. Regulatory overreach has the potential to disrupt the beryllium business balance that enables Materion to supply strategic and critical applications of this mineral for defense and commercial customers. If US production becomes infeasible due to US or foreign regulatory policies, the US could be held hostage by China or Kazakhstan who would not be able to meet world demands. A constrained supply of beryllium for the US would very likely follow the pattern that has occurred with other critical minerals; e.g., rare earths and China domination. 3. Notwithstanding the potential definitional restriction of a critical mineral under S. 1600, the US Department of Defense (DoD) has determined beryllium to be the only strategic and critical material for US national security. See: (Report required by Section 843 of Public Law 109-364: Report of Meeting, Department of Defense, Strategic Materials Protection Board, December 12, 2008). DoD's determination is based on the fact that: High purity beryllium is both a strategic and critical material. High purity beryllium is essential for important defense systems, and it is unique in the function it performs. High purity beryllium possesses unique properties that make it indispensable in many of today's critical U.S. defense systems, including sensors, missiles and satellites, avionics, and nuclear weapons. There is significant risk of supply disruption. Without DoD involvement and support, U.S. industry would not be able to provide the materials for defense applications. There are no reliable foreign suppliers that could provide high purity beryllium to the Department. DoD stated, `` . . . beryllium meets all the conditions for being a critical material,'' and concluded, ``the Department should continue to take those special actions necessary to maintain a long term domestic supply of high purity beryllium.'' (emphasis added) Those special actions included the U.S. government investing $80+ million in a Title III Defense Production Act project with Materion to ensure a reliable supply of beryllium in the US. A 2013 Rand Corporation report, Critical Materials, Present Danger to U.S. Manufacturing, identified beryllium as a highly concentrated critical material although primary production is in the US. The Senate Committee on Energy and Natural Resources should include provisions in S. 1600 specifically designating materials deemed strategic and critical to DoD as a critical mineral to align with US national security interests. 4. The European Union (EU) has also designated beryllium as a critical material and has publically expressed concerns on the impacts of over regulation of beryllium, in key emerging technologies in the electronics industry. The European Commission (EC) listed beryllium as one of fourteen critical materials (European Commission Critical Raw Materials for the EU--Report of the Ad-hoc Working Group on defining critical raw materials, 2010). Raw materials are designated as being ``critical'' when the risks for supply shortage and their impacts on the economy are higher compared to other raw materials. According to the EC paper, The most significant threats originate from perceived risks associated with the use of beryllium in electronic products. EU regulatory fears and NGO- propagated ``banning'' of the use of materials containing beryllium lead to unwarranted attempts to find substitutes that do not offer the same qualities with respect to performance, sustainability and environmental protection. The data that authorities rely on is not current and does not reflect the most recent scientific studies. In general, authorities are reluctant to break from the past and are not open to new scientific studies even if they are conducted in accord with OECD guidelines or originate from proven workplace strategies. Because the cost of beryllium is high compared with that of other materials, it is used in applications in which its properties are crucial. In some applications, certain metal matrix or organic composites, high-strength grades of aluminum, pyrolytic graphite, silicon carbide, steel, or titanium may be substituted for beryllium metal or beryllium composites. Copper alloys containing nickel and silicon, tin, titanium, or other alloying elements or phosphor bronze alloys (copper-tin-phosphorus) may be substituted for beryllium-copper alloys, but these substitutions can result in substantially reduced performance. 5. Materion offers the following recommendations to revise S. 1600 for the Committee's consideration. Materion urges the Committee to carefully craft the criteria for designation of a critical mineral in S. 1600 by giving greater weight to the criticality of a mineral versus its current supply limitations. Supply limitations come and go with market demands and, therefore, there is no basis for over- weighting supply in the designation criteria. Minerals deemed both strategic and critical to US national security interests should be mandated for inclusion in the designation process developed by the Department of Interior. Consistency among Cabinetlevel departments regarding a concise regulatory policy for beryllium as a critical mineral is absolutely necessary. Its strategic importance to national defense and its contribution to enhanced public safety, energy independence, innovation, and unique applications that foster economic growth and job preservation warrant beryllium being designated as critical. We recommend the following. (a) S. 1600 should be amended to allow beryllium to be designated as a critical mineral. For any material DoD designates as strategic and critical, the Secretary of the Interior should automatically designate it as critical as well, and it should be included in the initial list of 20 substances. US national security interests should take precedence. Keep in mind that beryllium is a key material in every atomic weapon and is critical to our armed forces in its use in fighter aircraft, tanks, weapons guidance systems, night vision systems, spacecraft, and satellites. The use of beryllium not only protects those who serve our country, but also gives them a tactical advantage. For example, a third provision could be added to Section 101 stating: ``Notwithstanding the methodology to be developed by the Secretary of the Interior, any mineral deemed strategic and critical to US defense or national security is automatically designated as a critical mineral and should be included as part of the Department of the Interior's published list.'' (b) For the reasons stated above, the legislation should include a provision that specifically requires the Department of the Interior to consult with the Department of Defense. (c) Alternatively, at a minimum, the two criteria for a substance to qualify as a critical mineral in the Department of Interior methodology should be amended from an AND to an OR. [Section 101(a)(1) and (2)]. While this option may open the criteria for consideration of a much broader group of minerals, it would allow for the consideration of those minerals strategic and critical to national security that are not threatened by traditional international supply restrictions. 6. Beryllium uses are hallmarks of innovation that are only possible through critical minerals that give the US technological advantages over other countries. Beryllium is a very unique critical mineral that provides functionality in a number of high-tech applications on which both commercial and defense customers rely. The following discussion describes many of the leading edge technology applications of the strategic and critical mineral beryllium. Approximately 80 percent of the beryllium used goes into copper beryllium alloys, that are used to exploit an unmatched combination of physical properties to produce highly reliable components of systems that protect lives and where failure could be either life-threatening or would provide lower performance and reduced quality of life. Copper beryllium alloys are used for the manufacture of high performance, electrically conductive terminals such as: --Extremely reliable automobile connectors for air bag crash sensor and deployment systems, anti-lock brake systems, and new drive-by-wire technologies. --Life-saving medical applications such as the connections in medical operating rooms and monitoring equipment. --Critical connections and relays in electrical, electronic and telecommunications equipment where failure would disrupt the communications of emergency services like firefighters and police. --No-fail aircraft and spacecraft electrical and electronic connectors, which enable, for example, fly-by-wire commercial airliners to achieve previously impossible fuel efficiencies. --Household appliance temperature and other function controls that provide reliability and safety to consumers while minimizing energy and water use. --Relays used for telephone exchanges and controlling industrial, domestic and automobile electrical equipment. Copper beryllium alloys are used for the manufacture of mechanical components such as: --Critical aircraft components such as altimeter diaphragms. --Extremely long service life fire sprinkler water control valve springs that must react to fires after decades of inactivity to save lives and control fire damage. --Non-magnetic equipment components used in oil & gas exploration, production and directional drilling equipment to improve extraction efficiencies and reduce land despoliation at drill sites by reducing the number and footprint of drill sites. --Coal and mineral mining equipment bearings that operate longer underground. --Mine detection and minesweeping systems that keep the global forces safe. --Undersea fiber optic cable signal amplification ``repeater'' housings that carry more simultaneous transmissions than ever conceived of in the original cable systems. --Low-friction, high-strength aircraft landing gear bearings, control rod ends and wing aileron/flap bearing bushings that allow significant weight loss to reportedly lower global fuel consumption and reduced associated carbon dioxide emissions. --High thermal efficiency, reduced icing, aircraft components such as pitot tubes to provide enhanced aircraft safety for passengers. --Electrode holders and components of welding robots for automated automobile and appliance welding allowing better working environments for factory workers. --Property modifier for aluminum and magnesium castings with enhanced properties that reduce weight to achieve fuel and pollution reduction in automobiles and trucks. --Plastic and metal casting molds with enhanced thermal efficiency. Approximately 20 percent of the beryllium used is in the form of pure metal, as a metal matrix composite containing over 50 percent beryllium or as a beryllium oxide ceramic. --X-ray transparent windows used to control and focus X-ray beams in all medical, scientific and analytical devices incorporating X-ray sources, providing finer resolution thereby allowing earlier cancer detection in mammography and other medical interventions. --Gyroscope gimbals and yokes for use in guidance, navigational and targeting systems used on aircraft, armored vehicle and marine missile systems providing levels of precision that give our forces tactical advantages and minimize collateral damage. --Satellite-mounted directional control devices for astronomical and other telescopes and instruments to provide accurate GPS locations signals and a wealth of scientific, agricultural and climatic data. --Satellite structural components that reduce weight, provide unmatchable rigidity at deep space low temperatures and enable longer, more capable space missions. --Mirrors for terrestrial and space-mounted astronomical telescopes that expand our knowledge of the universe, including the mirrors on the James Webb Telescope. Beryllium mirrors were not originally used on the Hubble telescope, but NASA eventually had to use small beryllium mirrors to clear up Hubble's blurred vision during a Hubble repair space mission. --Beryllium is critical for the success of the multi-national ITER fusion energy project located in Cadaraches, France that offers the opportunity to provide sustainable energy sourced from non-radioactive nuclear fusion. Beryllium is the only material that can withstand the heat to control the fireball-like plasma inside the chamber. --Medical isotope production nuclear reactors produce critical isotopes for treatment of many types of cancer as a result of the unique neutron beam reflective capabilities of beryllium. --Substrates for mounting high-powered civil aviation radar systems and power amplifiers that need cooling to prevent self destruction. --Mobile telephone infrastructure equipment. --Medical excimer laser beam focusing and control components, allowing surgeons unprecedented fine control of the high- energy laser beam during surgery. Preserving beryllium and other critical minerals for today's leading and life-saving technologies along with tomorrow's innovations must be a top priority to distinguish us from international competitors. Materion thanks the Senate Energy and Natural Resources Committee for considering these comments in crafting its Critical Minerals legislation and looks forward to a continuing dialogue on this important issue. We would be pleased to meet with the Committee, and we are always available to respond to any and all questions.