House Lawmakers Introduce Bill to Reduce US Reliance on China for Rare Earths

A cyclist wears a protective face mask while riding along a dusty road where dozens of factories processing rare earths, iron, and coal on the outskirts of Baotou city in Inner Mongolia, China on April 21, 2011. Frederic J. Brown/AFP via Getty Images

A bipartisan group of House lawmakers has introduced a proposal aimed at reducing U.S. dependence on China for rare-earth minerals and other critical materials used to manufacture modern technologies such as cellphones, hybrid vehicles, and missiles.

“A reliable supply of these materials is essential to American economic and security interests. We shouldn’t have to rely on the Chinese Communist Party for our critical military and communications technology,” said Rep. Lance Gooden (R-Texas), who introduced the bill along with Rep. Vicente Gonzalez (D-Texas), in a Sept. 1 statement from his office.

Rare-earth metals are 17 elements on the periodic table that are required for manufacturing everyday electronics such as computers, digital cameras, lithium batteries, and computer monitors—in addition to defense products used by the U.S. military, such as night-vision goggles, armored vehicles, and communications equipment.

China accounts for more than 70 percent of global production annually.

The bill, named the Reclaiming American Rare Earths (RARE) Act, would provide tax incentives for companies engaged in “mining, reclaiming, or recycling” of critical minerals and metals from deposits in the United States.

According to language in the measure, tax incentives come in the form of tax reductions on properties that are used for these activities, a depreciation deduction on nonresidential properties used, and reductions for individuals who purchase these materials extracted in the United States.

If approved, the bill would require the Secretary of the Interior to establish a grant program that would finance projects for the development of these industries, including $50 million to be appropriated for each of the fiscal years from 2021 to 2024.

Similar legislation (S.3684) was introduced by Sen. Ted Cruz (R-Texas) in the Senate in May.

The House bill is co-sponsored by five other Texas lawmakers: Republicans Will Hurd, Roger Williams, Pete Olson, Randy Weber, and Democrat Henry Cuellar.

Most rare-earth metals, as well as other elements such as lithium, cobalt, and manganese, are on a list of 35 critical minerals identified by the Department of Interior in May 2018 as essential to the United States’ economic and national security.

China was either the leading global producer or the leading U.S. supplier of 22 of these 35 critical minerals, according to a March article by Daniel McGroarty, a principal of the Washington-based firm Carmot Strategic Group, an advisory company on resource and defense sectors.

“By decreasing our dependence on China, the RARE Act would strengthen our national security, spur American innovation, grow our economy, and ensure the United States has the resource independence required to cement our leadership in technologies that define the 21st century,” Gooden said.

The bill was hailed by Pini Althaus, CEO of investment firm USA Rare Earth, which is developing the Round Top Mountain deposit located east of El Paso, Texas. The deposit contains 16 rare-earth elements and high-tech metals, such as lithium, uranium, and beryllium, according to the company’s website.

“The Gooden-Gonzales bill will facilitate projects like Round Top and other domestic projects in ensuring U.S. independence from China, and strengthen our economy and national security,” Althaus said in a statement.

“Billions of dollars’ worth of rare earths translates into trillions of dollars of finished goods and hundreds of thousands of jobs. China has understood this for a long time, and as a result, have solidified their stranglehold of the critical minerals supply chain.”

A previous version of this article misstated Rep. Vicente Gonzalez’s party affiliation. The Epoch Times regrets the error.