Washington, DC (WVDN) – The U.S. Senate Energy and Natural Resources Committee held a hearing to examine opportunities to counter the People’s Republic of China’s control of critical mineral supply chains through increased mining and processing in the United States as well as international engagement and trade. During the hearing, Chairman Joe Manchin (D-WV) discussed concerns with the electric vehicle supply chain, the Administration’s loosening of restrictions included in the Inflation Reduction Act intended to reduce our dependence on China and other adversaries for critical minerals, delays in permitting new critical mineral mines, and the Administration’s efforts to throttle back oil and gas leasing production.
Chairman Manchin commented on China’s ability to impact the global critical mineral supply chain.
“Just like Putin weaponized Russia’s oil and gas resources to try to scare off Europe from supporting Ukraine, Xi Jinping and the Chinese Communist Party are more than willing to use critical minerals as leverage to put Americans and the free world at risk. In fact, China is already doing so. Just last month, Xi Jinping’s government announced export restrictions on gallium and germanium – two critical minerals that are needed for semiconductor fabrication. This is just a small preview of what could come in the future. And some of the decisions that the Administration has been making seem to be increasing our risk, instead of reducing it,” said Chairman Manchin.
Chairman Manchin continued, “When it comes to the EV battery supply chain, depending on the mineral, China processes anywhere from 60 to 100 percent of all the minerals needed for batteries and electric motors. And their dominance is not just in minerals, it’s also in battery manufacturing. China is responsible for 74% of the world’s cathode production, 92% of anode production, and 76% of lithium-ion battery cell production. They’ve cornered the market.”
Chairman Manchin also expressed his strong concern about the Administration’s attempt to weaken requirements for critical minerals sourcing in the Inflation Reduction Act (IRA).
“With numbers like these, it is frustrating that the Administration continues to try to water down the sourcing requirements for EV batteries clearly stated in the IRA. Through guidance, the administration is attempting to cut the critical mineral sourcing percentage requirements in the IRA in half, pretending battery component manufacturing is the same as critical minerals processing, and proposing fake ‘free trade agreements’ that circumvent the law….This administration appears to care more about getting EVs on the road than our energy security and competition with China,” said Chairman Manchin.
Chairman Manchin also commented on the Administration’s delay in delivering a report to Congress with recommendations and a progress update on mine permitting improvements, as required in Chairman Manchin’s Bipartisan Infrastructure Law.
“Not only has the administration delayed the minerals projects we need, they appear to be taking the position that we don’t have a permitting problem at all for critical minerals. The Bipartisan Infrastructure Law directed the Department of Interior to make critical mineral permitting improvements and then report back to Congress within one year on progress and additional recommendations. But instead of getting the report the law requires, the report we received earlier this month – 10 months late – does not describe any concrete actions that have been taken to speed up permitting or establish timelines as required by the Bipartisan Infrastructure Law. While I do support the intent of some of the administration’s non-permitting recommendations – like reasonable reforms to the Mining Law of 1872 to ensure a fair return for taxpayers and addressing abandoned hardrock mines – none of that does anything to secure the supply chain for minerals or for the EV batteries this administration so desperately wants,” said Chairman Manchin.
During the hearing The Honorable Tommy Beaudreau, Deputy Secretary, U.S. Department of the Interior (DOI), responded to a request for an update on the DOI’s five-year offshore oil and gas leasing plan that would include lease sales required by Chairman Manchin in the IRA.
“We will be publishing the five-year program tomorrow. The program is definitely informed by the IRA and the connection the IRA makes between offshore oil and gas leasing and renewable energy leasing,” said Deputy Secretary Beaudreau.
Chairman Manchin questioned witnesses about how the Administration’s push to get electric vehicles on the road is affecting the demand for critical minerals.
“The pressure with us coming on so strong with the demand for EVs, the way the Administration is pushing our electric vehicles out the door quicker, how much of a strain is that putting on the world market and us being able to meet the demand?” asked Chairman Manchin.
“It is going to put enormous pressure on the system and I just don’t see how the mining, the supply is going to catch up, so that will mean prices going up, that will mean shortages, and there is a real imbalance on the processing of it. It is quite concerning about how concentrated at this point the supplies are from just a few countries. I don’t envision a sort of 1973, in the sense of a collusion of countries, but you can imagine very tight markets and shortages and a few countries being in very tight control of supply,” said Dr. Daniel Yergin, Vice Chairman, S&P Global.
Chairman Manchin also asked about the Administration’s lack of urgency to issue permits for new critical minerals and mining projects.
“The Administration doesn’t seem to have the urgency to try to get permits and to make sure that we are able to provide our own resources here with the minerals and deposits we have. What can we do to change that? What do you think really needs to be done for us to make a substantial change in how we extract in America?” asked Chairman Manchin.
“One of the biggest challenges is permitting, allowing for responsible mining to go forward. I think there are many examples where there are responsible mines, including mines that have been permitted in this Administration such as lithium mines in Nevada. So, it can be done, I’m fully confident, the timelines do need to be reduced,” said Deputy Secretary Beaudreau.
“I think permitting and the judicial review that goes on is absolutely the biggest obstacle when you realize that sometimes the permitting process will be half of a person’s professional career, and also what that does to the ability to have capital available to undertake these projects,” said Dr. Yergin.
The hearing featured witnesses from the U.S. Department of the Interior and the American Exploration and Mining Association, as well as the esteemed author Dr. Daniel Yergin of S&P Global.
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