Revitalize our defense industrial base with mine permitting reform

Watching the annual defense policy bills take shape this year, many of us from the national security community are delighted to see that Congress is finally acting to reverse years of inattention and wrong thinking regarding our nation’s vital defense industrial base.

Let us recall that in World War II, the U.S. produced a plane an hour and a ship a day, and we had American materials, manufacturing facilities, and stockpiles to make that happen. The Allies prevailed in the global struggle because our industrial strength supported the relentless courage and sacrifice of the American military. With a few twists, the modern era is no different. We must have the natural resources, we must be able to access those resources, be able to process, manufacture, stockpile, and own the entire supply line, free from foreign ownership that conspires not to play by U.S. rules that mitigate the effect that foreign owners can exercise on a business. The finest military in the world deserves no less.

{mosads}As chairman of the Strategic Materials Advisory Council, I have worked with my colleagues, the defense establishment, Congress and the media to ensure that there are secure, mostly domestic, supply chains for the strategic minerals and materials, processes, and facilities that our military needs to win. That’s why we so publicly opposed the transfer of sensitive military-grade battery technology to China’s Wanxiang Group in 2013, and that is why I support the Rep. Mark Amodei’s (R-Nev.) critical minerals amendment to this year’s National Defense Authorization Act (NDAA).

The Amodei amendment would speed the mine permitting process for critical and needed minerals and help jump-start the long-overdue process of defense industrial base revitalization. With the U.S. reliant on foreign miners for many critical minerals, it is time for us to change the overly burdensome mine permitting process here at home. As the 2015 report language accompanying the National Strategic and Critical Minerals Production Act notes, new mine permits in US take seven to 10 years. In Australia and Canada, two countries with stringent environmental safeguards, the same permit takes two years. The added years in the process contribute nothing in terms of environmental protection, but burden U.S. mine developers enormously in direct and opportunity costs. The current process drives mining production overseas and not everyone overseas shares our national security interests.

Many of the minerals that would be affected by the Amodei legislation, including rare earth elements, are already present domestically in large quantities; but sadly, we can’t access them with current laws. According to the 2017 Mineral Commodities Survey published by the USGS, there are 1.4 million tons of rare earth elements domestically available. At the current rate of consumption, around 11,000 tons per year, this means there is enough domestically available material to supply current needs for over 120 years. With such mineral wealth in our land, there is no reason why the U.S. should rely on imports for rare earths and other mineral commodities. That reliance endangers our national security.

For too long, Chinese enterprises, including those that are state-financed and politically directed, have been able to take advantage of the freedom and openness of U.S. markets to pursue China’s strategic ambitions, most recently articulated by the China 2025 strategy for world dominance. Access to our strategic supply chain starts at the mine. China’s dominance of markets for critical minerals, including rare earths and tungsten, proves that point. China has also moved downstream, through acquisition of component manufacturing companies, such as the high-powered magnets formerly provided by Indiana’s Magnequench, and into end items, like the advanced batteries now produced by Wanxiang, to capture the strategic advantage.

Perhaps in the nick of time, the U.S. Department of Defense now realizes that some of its most advanced systems — aircraft, missiles, and ships — are entirely dependent on ores and components being sourced, processed, manufactured and delivered from a potential adversary with additional baggage including quality control, pricing, and the use of such in the adversary’s foreign policy aims.

For the first time in two decades, Congress and the White House are taking steps to broaden the ability of the military and other government officials to review and block transfers of sensitive technologies and production to foreign nations, as well as enhancing our own indigenous capabilities. This year’s U.S. Senate NDAA contains language that would greatly strengthen the Committee on Foreign Investment in the United States (CFIUS), giving it the authorities needed to block the types of Chinese investment actions that were previously able to escape regulatory scrutiny.

Combined, an update to CFIUS, a streamlined mine permitting process, and the fostering of other measures to nurture and protect our supply chain security would send a powerful signal to potential adversaries that the United States means business in addition to providing opportunities for domestic investment and for increasing jobs and innovation. And that’s precisely the way we keep our military and national security on top.

Dean Popps is a Washington, D.C. area attorney who serves as chairman of The Strategic Materials Advisory Council. He served as the U.S. Army’s Service Acquisition Executive (SAE) and Acting Assistant Secretary for Acquisition, Logistics and Technology.