'We Don't Have The Capacity': Joe Manchin Warns That U.S. Can't Produce Needed Minerals Domestically

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In a House Foreign Affairs Committee hearing on Tuesday, former Senator Joe Manchin spoke about shifting mineral reliance away from China and to the U.S.

Transcript

00:00Thank you, Mr. Fennin. I now recognize Mr. Manchin for your opening statements.

00:06Chairwoman Kim and Ranking Member Behrer, I want to thank you all and members of this committee

00:11for the opportunity to share my perspective on this vital and bipartisan economic and national security issue.

00:17It's something I put years of work into during my time as chair and ranking member of the Senate Committee on Energy and Natural Resources,

00:25as well as the Senate Armed Services Committee.

00:27When I joined the Senate in 2010, China put rare-earth export controls on Japan,

00:32following a territorial dispute over islands they claimed ownership of, which should really sound familiar to all of us.

00:39From that moment, through the Energy Act of 2020, which created the critical minerals list itself,

00:44through my last day in the Senate, I focused on this issue.

00:47And while there has been good legislation, there remains much more to be done.

00:51If I could leave you with one thing today, it's to impress the urgent need for us and our allies

00:55to have strong, reliable, critical mineral supply chains across the three phases,

01:00extraction, processing, and manufacturing, so that no part of the process is in the hands of an adversary.

01:06The solution includes the use of our financing tools, like the Development Finance Corporation,

01:11the Defense Production Act, and the Export-Import Bank.

01:14We need to reauthorize and strengthen these key financial tools so that we have a full toolbox.

01:19And given the Committee's focus, we must keep in mind that none of this works without diplomatic engagement.

01:25The Senate Department must focus on energy security with experts who understand the complexity of resource economics

01:32and energy geopolitics, with emphasis to prioritize the issue in-country.

01:39Finally, we need to make sure that this effort is coordinated so that efforts across so many agencies

01:43are effective and don't work at cross-purposes or waste investments.

01:48Here's why this matters now more than ever.

01:50Just like Putin weaponized Russia's oil and gas resources to try to scare off Europe from supporting Ukraine,

01:57Xi Jinping and the Chinese Communist Party are more than willing to use critical minerals as leverage

02:02to put Americans and the free world at risk.

02:05They have ramped that up in earnest recently by flooding the market with oversupply,

02:10driving prices down, and leaving producers worldwide unable to compete,

02:14and then using export controls once they dominate the market.

02:18In fact, at the end of 2023, I held a hearing in the wake of the first round of China's export restrictions on gallium and germanium,

02:27two critical minerals that are needed for semiconductor fabrication.

02:30As I feared that export restrictions became a ban in the late 2024,

02:36that with recent trade disputes, they have gone even further by cutting off our supplies of rare earths,

02:43anemone, tungsten, and more.

02:45That is why tariffs are so important.

02:47Tariffs are needed to protect the building blocks of our economy and national security,

02:52as well those of our allies from China's market distortions and economic malfeasance.

02:58That is what tariffs are for, to protect strategic industries by penalizing bad actors and keeping the U.S. prices competitive.

03:07Even worse than Europe's addiction to Russian gas, which is about 45% of supply in 2021,

03:14we are over 90% reliant on China for graphite, gallium, rare earths,

03:19over 60% reliant on germanium,

03:21over 70% reliant for high-grade cobalt and nickel,

03:25and I could go on and on.

03:26And China's critical mineral grip extends around the entire globe.

03:32They control mines throughout the world,

03:34all of which feed the processing and manufacturing powerhouse that they control.

03:38So just as we cannot solve this problem alone,

03:41we are not in this mess by ourselves either.

03:44We must acknowledge that while we can provide much of the minerals we need domestically,

03:48we don't have the capacity to produce or process every mineral in the quantities that we need here in the United States,

03:56in North America, or even in a newly formed AUKUS security partnership between Australia, the United Kingdom, and the U.S.

04:03Even if capacity weren't an issue, we can't afford to spend a billion dollars per mineral to support domestic suppliers.

04:13Our debt is a national security threat, too, and we must come to grips with that.

04:17Permitting reform is essential to fast-track domestic production,

04:21but we also need to ensure that we are working with trusted and reliable partners when it comes to overseas and mineral resourcing.

04:29That means looking first to friends like Canada, Australia, Japan, and Norway,

04:35but also building new trusted partners throughout efforts like the Mineral Security Partnership

04:41and countering China through the energy and mineral diplomacy efforts under the committee's jurisdiction.

04:47We must also be extremely cautious of our policies where the Chinese have a majority of control,

04:52like the Democratic Republic of Congo and Indonesia,

04:55and don't get sucked in when they have total control either.

04:58So, in closing, the time to solve this issue, this issue is now,

05:02and Congress has a grave responsibility to step up to the plate.

05:06I look forward to your questions, and thank you for asking me to be here today.

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