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Business Coalition Urges Secretary Chu to Address Rare Earth Element Crisis

Monday, June 28, 2010 - 8:00pm

Calls on DOE to Use Loan Guarantees to Bolster Domestic Rare Earth Element Supply Chain

WASHINGTON, D.C.—In a letter sent to Secretary Chu today, a coalition of 13 business organizations, including the U.S. Chamber of Commerce, expressed deep concern about the current U.S. lack of capacity to manufacture rare earth elements (REE) and permanent magnets, which are critical for clean energy, defense, communication and computer technologies. The business associations urged the Energy Department to act expeditiously on applications for loan guarantee assistance, made under the Section 1703 Loan Guarantee Program, for the purpose of re-establishing on U.S. soil a rare earth oxide, metal, alloy and permanent magnet manufacturing supply chain.

“It is in our nation’s interest to encourage the rapid re-establishment of a domestic rare earth materials and permanent magnet manufacturing supply chain as soon as possible,” said Chamber Senior Vice President for Environment, Technology & Regulatory Affairs Bill Kovacs. He notes that REEs are, for example, essential constituents of automotive pollution-control catalytic converters, hybrid-electric vehicle components, permanent magnets, wind turbine components, and petroleum fluid cracking catalysts. In fact, many U.S. defense and weapons systems are now totally dependent upon foreign-sourced rare earth materials.

The United States’ current 97% dependence upon REE imports from China is becoming increasingly problematic. China is quickly increasing internal REE demand as it ramps up domestic activities, leading to down-trending exports of REEs. Analysts forecast that rest-of-world REE demand will likely exceed Chinese exports by 2011, putting the United States in a difficult position.

The coalition believes that re-establishing a domestic REE manufacturing and supply chain is especially critical given that the U.S. is now so heavily dependent upon questionably available foreign supplies of rare earths. As noted, restoring domestic REE production capability could leverage new manufacturing jobs on U.S. soil in a variety of rare-earth dependent technologies, including renewable energy, hybrid and electric vehicles, batteries, power generation, energy efficient lighting, water treatment, agriculture, communications, health care systems and many others.

“We must restore the U.S. to a position of effective independence in the production of these critical materials,” Kovacs continued. “If we fail to do this, and given that there are no cheap alternatives to REE in many applications, how can we possibly hope to advance innovative energy technologies that are needed to diversify our energy options?”

The full text of the letter is available here: http://www.uschamber.com/issues/comments/2010/100629_rareearth.htm

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.

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