Senators ask Obama Administration to block Chinese mining investment
U.S. senators urged the Obama Administration oppose domestic and international Chinese mining projects "until China plays fair and square with rare earth element exports."
Posted: Wednesday , 16 Mar 2011
RENO, NV -
Four U.S. Senate Democrats Tuesday urged Treasury Secretary Timothy Geithner and Secretary of the Interior to use their power to block Chinese mining projects both internationally and in the U.S. until "China agrees to participate fairly in the global trade of REEs."
"China has been increasing hoarding of rare earth minerals, sending costs across a range of industries skyrocketing," said Senators Charles Schumer of New York, Debbie Stabenow of Michigan, Robert Casey of Pennsylvania, and Sheldon Whitehouse of Rhode Island.
In a letter sent to Secretaries Geithner and Salazar Tuesday, the senators accused China's "anticompetitive practices" of exacerbating "global supply problems at a time when world demand continues to climb. We proposed the United States stop helping China enhance its dominant position in rare earth materials."
"To that end, Secretary Geithner, we respectively request that you instruct the United States Executive Director at each multilateral bank, including the World Bank entities, to oppose the approval of any new financing to the government or China or for a project located within China involving rare earth mining, smelting or separation, or production of rare earth products," the senators wrote. "The United States' support for multilateral bank international development initiatives should not extend to projects directly at odds with our own national and economic security needs."
The senators claimed China's anticompetitive rare earth policies extend beyond export restriction. "China also prohibits foreign investors from mining rare earths and from participating in rare-earth smelting and separation projects except in joint ventures with Chinese firms."
"We propose the United States stop tolerating China's imposition of unfavorable terms on foreign companies," the lawmakers urged. "The United States should not sit passively while China's investment policies hamstring U.S. companies and undermine our national and economic security needs."
In a news release, the senators accused China of taking "numerous actions to hoard REEs in recent months" including using their "monopoly as a retaliation tactic against other countries."
"As China's anti-competitive practices drive rare earth prices increasingly higher, American businesses suffer the consequences," they said.
"The Chevy Volt, an electric car manufactured in Michigan, relies on rare earth metals for its engine, and countless American clean energy technology, defense technology, and other companies use rare earth products."
"Sydor Optics, a Rochester, NY company that makes lenses for 3D projects, saw the price of a rare earth element-based compound critical to their production practices skyrocket from $8.50 a pound to $45 a pound, damaging their business," the senators noted.
The lawmakers also claimed China's trade practices also pose a threat to national security. "According to the Department of Defense, difficulty in obtaining a rare earth metal has already caused production delays with weapons systems."
"Several branches of the military, a defense contractor, and departments across the federal government have begun to review their rare earth metals acquisition process, recognizing the possible perils of depending on a Chinese-dominated market full of unfair policies," the senators said.
They stressed that "in the long run, new mining projects coupled with development of refining, alloying and fabricating capacity will alleviate concerns."
However, with so much at stake, "the United States should not sit passively while China's investment policies hamstring U.S. companies and undermine our national and economic security needs," the senators concluded.