FederalTexas Lawmakers Introduce Bill to Reduce Dependence on China for Rare Earths

The legislation would provide tax incentives for the U.S. mining of rare earth materials, used to produce goods like smartphones and defense systems.
September 8, 2020
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Reps. Lance Gooden (R-TX-05) and Vicente Gonzalez (D-TX-15) introduced the Reclaiming American Rare Earths (RARE) Act last week in an effort to bolster the industry in the United States and reduce dependence on China for the materials.

Rare earth metals are used in the production of high-tech goods, including smartphones, electric vehicles, and modern defense systems.

China produces over 85 percent of the world’s rare earth materials, and most U.S. imports of the product come from China, according to the Center for Strategic and International Studies (CSIS).

The RARE Act would provide tax incentives through deductions on property used for the mining and on the purchase of materials extracted within the United States.

It would also create a $50 million yearly grant program through the Secretary of the Interior through the next four fiscal years.

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Sen. Ted Cruz (R-TX) introduced a similar bill in May, the Onshoring Rare Earths (ORE) Act, and has lent his support to the Gooden-Gonzalez bill, stating, “We must take an all of the above approach to ensuring the entire supply chain for rare earth elements and critical minerals is located in the United States, and I’m proud to lead this effort with Rep. Gooden.”

Five other Texas House members have also cosponsored the RARE Act: Reps. Will Hurd (R-TX-23), Roger Williams (R-TX-25), Henry Cuellar (D-TX-28), Pete Olson (R-TX-22), and Randy Weber (R-TX-14).

The Lone Star State’s role in the rare earths industry is poised to grow if the U.S. is able to decrease its reliance on China.

Last year, Texas’ Blue Line Corp. and Australia’s Lynas Corp. announced plans to expand a rare earths processing facility in Hondo, west of San Antonio.

At the end of July, Lynas reportedly signed a contract with the U.S. Department of Defense (DOD) to develop the separation facility.

The DOD also announced in July that they were utilizing the Defense Production Act to sign a $28.8 million contract with Urban Mining Group in Austin to “assist in developing a domestic source for Neodymium Iron Boron (NdFeB) rare earth permanent magnets.”

USA Rare Earth, the funding and development partner for a rare earths extraction project in West Texas’ Round Top, lauded the RARE Act.

“On this issue of national importance, it’s significant that Texas leads the way,” said CEO Pini Althaus in a press release. “Our Round Top deposit contains $22 billion of materials, including a significant amount of rare earths, lithium and tech metals. The Gooden-[Gonzalez] bill will facilitate projects like Round Top and other domestic projects in ensuring US independence from China, and strengthen our economy and national security.”

“We shouldn’t have to rely on the Chinese Communist Party for our critical military and communications technology,” said Gooden. “Our future technological capacity will depend on our ability to cultivate an economic environment that is favorable to robust domestic production of these resources.”

“Ending our dependence on China starts today,” said Gonzalez. “The RARE Act will allow the United States to develop a reliable domestic supply of critical minerals and rare earth elements and eliminate this pressure point that could have lasting impacts on our national security and most importantly, our way of life.”

The text of the bill can be read below.

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Daniel Friend

Daniel Friend

Daniel Friend is a reporter for The Texan. He participated in a Great Books program at Azusa Pacific University and graduated in 2019 with a degree in Political Science. He has studied C.S. Lewis’s science fiction trilogy and in his spare time you might find him writing his own novel partly inspired by the series.