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Background on H.R. 6160

 The political and financial relationship between China and the United States has taken center stage for quite some time. A great deal has been written regarding trade imbalance, currency manipulation and, of course, our country’s dependence on China’s purchases of our debt, (U.S. bonds). China is the largest importer of U.S. goods and the largest holder of U.S. debt. This relationship has given many in Congress cause for concern as it relates to our national security.

 According to the Science and Technology Committee, China holds control of approximately 90-97% of the world’s supply of rare earth materials. China has imposed export quotas on many of these rare earth materials and has consistently decreased those quotas. In fact, over the past year they have reduced quotas by 72%.

There is growing concern that if, nothing is done, we could become dependent on Chinese-made electronics made specifically for military use, energy storage and power generation. As we search and develop alternative energy sources, we find rare earth elements in all of them ranging from wind turbines and hybrid vehicles, to batteries and electric motors.

 We are putting our nation in a compromising situation.  An example of this potential problem is the Japanese relationship with China. According to a New York Times article dated 10/10/2010 “ Amid a diplomatic spat with Tokyo, China started to block exports of all rare earths to Japan.” What would our response be if supplies were cut to the United States? Imagine the potential repercussions to commerce and our military capability if we continue to be reliant on China for these important materials?

 H.R. 6160 was written and introduced to deal with the issue of China’s monopolistic approach to the accumulation of raw materials. This “resource free-for-all” attitude ranges from oil, gas, coal and tar sands just to name a few. As our world has continued to use greater amounts of all resources, it is no wonder rare earth metals and China’s method of accumulation are now forcing our lawmakers to act in our country’s best interest. Bravo.

 H.R. 6160 Rare Earths and Critical Revitalization Act

Sponsor: Rep. Kathleen A. Dahlkemper (Science and Technology Committee)

 Status: Bill Has Passed the House on 9/29/2010 as the “Rare Earths and Critical Materials Revitalization Act of 2010”

 Purpose of the Bill: to establish a program within the Department of Energy to research and develop advancing technology to assure the long-term, secure, and sustainable supply of rare earth materials sufficient to satisfy the national security, economic well-being and industrial production needs of the U.S.

 To accomplish this Department of Energy (D.O.E.) will collaborate with relevant government agencies and foreign countries with interests relating to rare earth materials.

 In addition, the bill would allow the D.O.E. to make loan guarantees for the commercial application of new or improved technologies for the separation, recovery, or application of rare earth materials.

 The bill has considerable implications for new commercial ventures in the rare earth arena. Loan guarantees could be approved for the application of rare earth materials in the production of improved magnets, batteries, refrigeration systems, optical systems, electronics, and energy catalysts. The authority to enter into guarantees would expire September 30, 2015.

 Additional Information Links

 http://www.economist.com/blogs/babbage/2010/09/rare-earth_metals