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Sen. Cruz and Gov. Dunleavy: China Has Taken Control of Critical Mineral and Rare Earth Supply Chains - We Need to Act Now to Take It Back

Highlight the need to end U.S. dependence on the communist regime for critical minerals

October 21, 2020

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202-228-7561

HOUSTON, Texas - In a new op-ed for The Hill, U.S. Sen. Ted Cruz (R-Texas), member of the Senate Foreign Relations Committee, and Gov. Mike Dunleavy of Alaska, outlined the importance of redirecting critical supply chains of critical minerals including rare earth elements, among other resources, from China. To lessen the United States' dangerous dependence on the Chinese Communist Party, Sen. Cruz introduced the ORE Act, or Onshoring Rare Earths Act of 2020, legislation to bring back supply chains for these resources within the United States. Read the full text of the ORE Act here.

Read Sen. Cruz and Gov. Dunleavy's full op-ed here and below:

China could cut our access to critical minerals at any time - here's why we need to act
The Hill
By: Sen. Ted Cruz and Gov. Mike Dunleavy
October 21, 2020

When the COVID-19 pandemic hit and it became clear that the Chinese government had lied to the world about the nature of the virus and how it was spreading, it was a wake-up call to many politicians in Washington and even some in the media - who for decades had turned a blind eye to the dangers of this communist regime - that China is the most significant geopolitical threat to the United States in the next century.

It was also a wake-up call that China has taken control of supply chains around the world as part of its quest for global domination. We saw leaders of the Chinese Communist Party - in the midst of a public health crisis they allowed to go global and endanger millions - threaten to withhold life-saving medical supplies and medications from the United States. That's not just economic warfare, that's actual warfare that would cost American lives. And it's foolish for us to allow American citizens to be vulnerable to that sort of Chinese aggression.

But medical supplies and medications aren't the only products the Chinese control that the United States depends on. China has also consolidated the global supply chain for critical minerals, including rare earth elements. These are minerals critical to our national security and our way of life - from the weapons that our military needs to ensure our national security, to the batteries that power the modern global economy. The supply chain that China controls spans everything from the very top - where minerals are mined or recycled or recovered - to the final steps of manufacturing. Over the years, the Chinese Communist Party systematically came to dominate the entire process, and had already begun using that dominance against us before the pandemic hit.

Fortunately, the Trump administration wisely had already been moving to bring those supply chains to the United States. In 2017, President Trump signed an executive order which produced several calls to action, including improving the understanding of domestic critical mineral resources and growing the American critical minerals workforce. And just last week, he signed another executive order regarding critical minerals, declaring our reliance on importing these minerals from adversaries like China a national emergency.

However, the challenge before us remains enormous. If the task was simply to keep existing supply chains in the United States, that would be one thing. But jumpstarting an industry that barely exists is exponentially more difficult, because China has been seeking to control the critical minerals sphere since it became clear they would have an enormous role to play in high-tech economies. Bringing the supply chain to the United States requires granular knowledge of the industry, because investors are sitting on the sidelines of the critical minerals industry for different reasons than they're sitting on the sidelines of the pharmaceutical industry. To fix this, we have to convince investors to get into a market where they are justifiably afraid China will undermine them at every point of the supply chain.

Despite the challenges, we have the resources we need, and with American ingenuity we are up for the task - if the federal government reduces regulations and provides market-based incentives. As a Texas senator, I introduced in the Senate the ORE Act, which would build the confidence of investors who are starting projects at the very top of the critical minerals supply chain, where the minerals are produced by being mined, recycled and reclaimed. The ORE Act would provide tax relief for those projects and limited pilot project money to get them going. To build out the rest of the supply chain, it also provides tax incentives for manufacturing final products wholly produced in the United States from beginning to end, and ensures that the Department of Defense will purchase those products.

As governor of Alaska, I've taken a similar approach by directing Alaska's industrial development authority to provide financing for rare earth mining projects. One of these projects could bring a rare earth separation plant to Alaska, enabling private companies to move forward with plans to extract strategic elements like dysprosium and yttrium. My administration is also working to construct a 211-mile road to the Ambler Mining District, a region so rich in critical and strategic minerals that access to the region was guaranteed by Congress 40 years ago.

When it comes to establishing a supply chain for critical minerals in the United States, the entire country has a role to play - from the reclamation of mines and reprocessing of mine waste rock in Appalachia, to mines in Texas, Alaska, California and Wyoming. In Alaska alone, 30 of the 35 critical minerals identified by President Trump are available for extraction, as well as tremendous amounts of commercial-grade graphite, lead, zinc and copper.

In Congress, engaged lawmakers and industry leaders are urging passage of the ORE Act not just in the Senate, but in the House of Representatives as well. The requirement that the Department of Defense purchase critical minerals from the United States was inserted into the National Defense Authorization Act, and the House is considering a bill that would give tax breaks and money for pilot projects, like the ORE Act does. Meanwhile, Alaska is rapidly laying the groundwork to address our nation's shortage of critical rare earth minerals by using technologies to map the state's geology, surveying transportation routes, and thoroughly evaluating proposals to responsibly extract these resources.

At any time, China could cut off our access to rare earth elements and critical minerals. We need to act now to establish a critical mineral supply chain in the United States, and to make sure we can manufacture defense technologies and support our military. Our national security depends on it.

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