Pentagon Proposes NDAA Amendment for Australia, UK Rare Earths Funding
- May 12, 2022
- Posted by: Quatro Strategies
- Category: Mining
The U.S. Department of Defense has asked Congress for authorization to fund strategic mineral facilities in the UK and Australia. The Pentagon calls the proposal crucial to national defense since those minerals are crucial for weapons manufacturing as well as electric vehicles (EVs).
Pentagon’s request to alter the Cold War-era Defense Production Act (DPA) came as part of its recommendations to Congress for how to write the upcoming US military funding bill, the National Defense Authorization Act (NDAA).
Congress will decide whether to accept or reject the proposal when it finalizes the bill later this year.
The U.S. has accelerated efforts to wean off dependence on China for lithium, rare earths and other minerals that are used to make a range of technologies including weaponry. Existing law bars DPA funds from being used to dig new mines, but they can be used for processing equipment, feasibility studies and upgrades to existing facilities. Currently, only the U.S. and Canada facilities are eligible for DPA funding.
The Pentagon argues that by adding Australia and the United Kingdom, the U.S. could leverage the resources of its closest allies to enrich US manufacturing and industrial base capabilities and increase the nation’s advantage in an environment of great competition.
The Department of Defense also says limiting the DPA only to domestic or Canadian sources unnecessarily constrains strengthening an industrial base.
The U.K. refines nickel and has several proposed processing facilities for lithium and rare earths. Australia has mining and processing facilities for a range of minerals, including iron ore, lithium, copper and rare earths, a group of 17 metals used to make magnets that turn electricity into motion.
The Pentagon last year awarded a DPA grant worth $30.4 million to Australia-based Lynas Rare Earths to build a processing facility in Texas with privately held Blue Line Corp.
Lynas said last month that these funds have not been dispersed yet. The company cites ongoing negotiations over protection of its intellectual property as the issue.
The Pentagon has also granted at least $45 million to MP Materials, which controls the only US rare earths mine but depends on China for processing.
The funds are to help MP’s efforts to resume US processing of those strategic minerals. The company said last week that it has started receiving those funds while confirming that the Pentagon will have certain rights to technical data because of its financial support.
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