During a House Energy and Commerce Committee hearing prior to the congressional recess, Rep. Brett Guthrie (R-KY) spoke about China's use of market manipulation to make the United States more reliant on China for critical minerals.
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00:00General Lady Yields, the chair now recognizes the chairman of the full committee, Mr. Guthrie,
00:06for five minutes for his question.
00:07Thank you, Mr. Chair.
00:08Thank you for having this.
00:09Sorry, I've been in the rules committee over in the Capitol building most of the night.
00:12So I missed your testimony, so I apologize.
00:16And first, I want to just bring up, I know I think everybody probably heard that our
00:20dear colleague, Jerry Connolly, passed away.
00:23And I mentioned to him in our full committee, he was one of my dear friends here, he and
00:26his wife, Smitty.
00:28And I told a story about where he brought her the wrong Valentine gift last time.
00:31This one, he was studying to be a priest.
00:34He was in the seminary, was right before vows, and she had been a nun, his wife.
00:39And they met at a nonprofit thing later.
00:41They both, she had left the, anyway, I was telling a, we were on a NATO committee, telling
00:45a friend of ours in Europe, I said, well, Jerry was about to be a priest and he married a nun.
00:49And he came to me, he goes, you make it sound like I was trolling the convent.
00:53You better tell it, you better tell that like it really is.
00:55I didn't think about that, the story of it.
00:57But anyway, so gosh, what, what a man, what a wonderful person.
01:02So I'm sorry, we're going to all lose, we've lost him.
01:06Getting back to the end, thank you, Mr. Chairman, for doing this.
01:09Critical minerals, as we know, we saw during the tariff issues when China was going to start
01:15restricting that and the leverage they had.
01:17And so, Ms. Hunter, how critical are, how, how are critical minerals, and particularly
01:23rare earth elements, for the reliability for energy and also to being competitive with
01:28China for AI, which is part energy as well?
01:31You want to talk about that?
01:33Thank you for the question, Chairman.
01:35Rare earths are a really good example here of the importance across energy infrastructure,
01:40ensuring American energy dominance, and then also supporting new growing technologies
01:44like the AI revolution.
01:47They get a lot of attention, rare earth elements, for their application in permanent magnets,
01:51specifically used to propel wind turbines, also to use in electric motors for EVs, but
01:57to their utilization across society is really outsized.
02:01When we're putting in place these new AI data centers, they have to remain cool.
02:05It is the rare earth magnets that actually keep the fans going in these data centers, so
02:10critically important there as well.
02:11Another good example, besides rare earths is copper and aluminum, for their conductivity,
02:16they're used not only in transmission infrastructure, but also in these data centers to make sure they
02:21can have that high level of computation.
02:24Okay, thanks.
02:24And so, Ms. Sweeney and, or Ms. Hunter, and also Ms. Sweeney, the issue right now is China.
02:31Well, we need them anyway, but the issue right now is China.
02:34And so, could you talk about, I'm certain Ms. Sweeney and Ms. Hunter could talk about it, too.
02:38I think my question for you, what are the economic implications of not having our own supply, Ms. Hunter?
02:44And then, Ms. Sweeney, if you'll talk first and talk about both of it is, my understanding is that China has
02:50tried to kind of drum up opposition in the United States for us to develop our own critical minerals
02:55and rare earth elements, not only mining, but processing as well.
03:01I mean, how does China try to use more manipulation, any type of thing to prevent us or discourage us
03:09from developing this industry, which makes us more dependent on them?
03:12Can you give us some examples of that?
03:13Yes.
03:14A great example, I think, is the Gervois cobalt mine in Idaho.
03:22They were just about to open.
03:25They were fully permitted.
03:28And China dropped the price of cobalt, manipulated the market,
03:35dumped excess cobalt onto the market,
03:39and Gervois had to choose between operating a loss or closing,
03:46and they closed that facility.
03:50But that's a prime target for trade action, is it?
03:54It should be.
03:56So, Ms. Hunter, what are the national security implications
04:01if China keeps doing this and we don't have our own supply?
04:03There are very clear national and economic security implications
04:07if we don't find alternative supplies to China.
04:10Again, rare earths is a great example.
04:13With the most recent export controls that we've seen,
04:16that have been somewhat de-escalated.
04:19We heard, you know, it's covered all over the news
04:23about how manufacturers who keep, you know, around 45 to 60 days of inventories
04:27are lacking alternative sources of supply,
04:29particularly for heavy rare earths that we have to get processing online for.
04:33Last year, the USGS documented a lawsuit.
04:35Thanks, I'm just about out of time.
04:37But we have the biggest proponent of rare earth minerals chairing this committee
04:40right now on critical minerals, Mr. Palmer.
04:42And we're going to all turn him loose and ourselves loose.
04:46What?
04:47Turning ourselves loose and having a game plan to different things?
04:49I know he has a game plan.
04:50I'm trying to learn from him.
04:52So what do you, anybody, I do start with you guys,
04:54suggest what does Congress need to be doing?
04:57What's the biggest impediment that Congress can help you solve
04:59to get rare earth and critical mineral processing in our nation?
05:03State side, start Ms. Hunter.
05:05And go down.
05:06Permitting reform and helping with the cost of disadvantages for U.S. processors.
05:11Ms. Hunter, Ms. Weaney?
05:12I'm sorry.
05:12Ditto.
05:13Mr. Hergert, you want to?
05:14Capital being put at risk.
05:16There's a 30% premium in the United States
05:17spent on unnecessary permitting costs.
05:21The IRA, all it did was offset half of that.
05:24So if we sped up mining projects, we would see close to a trillion dollars
05:28of foreign direct investment pour into the United States,
05:31and you wouldn't need Keynesian-style federal money.
05:33Now, I'm not going to tell my members that are going to slap me that they don't like the free money,
05:37but at the end of the day, we need to change the way we think about it.
05:41That's what Mr. Palmer says, a trillion dollars of it.
05:44So you're saying he's right.
05:46We have a narrow window where China is at the end of its useful life on what it built 20 years ago.
05:52It can no longer meet the purity standards that are required for AI, semiconductors, cathodes, and the rest.
05:58So we have about a two-, three-year window where we need to get out of our own way,
06:01and we might be able to catch up a little bit to China.
06:03I'm not going to get to the other two of you, but I will say that the time to act is now,
06:07and so it's time for us to put some action into this.
06:09Thank you very much.
06:10Appreciate it.
06:11Thanks, gentlemen.
06:12The chair now reckoned.