WASHINGTON — Congress has repeatedly authorized multimillion-dollar sell-offs of the U.S. strategic minerals stockpile over the past several decades, but Washington’s increased anxiety over Chinese domination of resources critical to the defense industrial base has prompted lawmakers to reverse course and shore up the reserve.
The House Armed Services Committee will seek to bolster the National Defense Stockpile of rare earth minerals in the fiscal 2023 defense authorization bill, Defense News has learned. And earlier this week, the Defense Department submitted its own legislative proposal to Congress asking the committee to authorize $253.5 million in that legislation to procure additional minerals for the stockpile.
The stockpile includes valuable minerals essential to defense supply chains, such as titanium, tungsten and cobalt.
Rep. Seth Moulton, D-Mass., who sits on the armed services committee, is also trying to convince the powerful defense appropriations subcommittee to provide additional funding for the National Defense Stockpile. The stockpile is managed by the Defense Logistics Agency and funded by the Treasury Department.
“Right now, the stockpile is reaching insolvency, so we can’t even operate to simply maintain salaries and maintain the stockpile,” Moulton told Defense News. “The second broad issue is that the stockpile has been reduced dramatically in size over the past several years [as] the stockpile’s been sold off.”
The stockpile was valued at nearly $42 billion in today’s dollars at its peak during the beginning of the Cold War in 1952. That value has plummeted to $888 million as of last year following decades of congressionally authorized sell-offs to private sector customers. Lawmakers anticipate the stockpile will become insolvent by FY25.
“A lot of what happened is Congress just getting greedy and finding politically convenient ways to fund programs that they weren’t willing to raise revenue for,” said Moulton.
These sell-offs have included 3,000 short tons of titanium, used in building military airframes, and 76 million pounds of tungsten ores and concentrates, used in military turbine engines and armor-piercing ammunition. They have also included more than 2 million pounds of tantalum, used in electronics, as well as 26 million pounds of cobalt and 62,881 short tons of aluminum.
“It was just ignorance on our part that we allowed that to happen,” Rep. Tim Burchett, R-Tenn., told Defense News. “I don’t see any other reason for it.”
Burchett was one of seven Republicans to sign onto Moulton’s letter to the defense appropriations subcommittee last month asking appropriators to provide an additional $264 million in funding for the stockpile for FY23.
“While these drawdowns were appropriate when the Department of Defense mainly focused on counterterrorism, the current stockpile is inadequate to meet the requirements of great power competition,” the lawmakers wrote. “The [National Defense Stockpile] is no longer capable of covering the Department of Defense’s needs for the vast majority of identified materials in the event of a supply chain disruption.”
Furthermore, China monopolizes much of the global rare earth mineral market, raising the prospect Beijing could cut off access to critical minerals in the event of a conflict with the United States.
“China in particular does a remarkably good job of hoarding these materials,” said Moulton. “China clearly has a comprehensive global strategy to corner the market on these materials and we’re behind and we’re playing catch-up.”
China has the world’s largest trove of titanium and exports a significant quantity of tungsten to the United States. The nation also dominates the mining and mineral trade in developing countries that export large quantities of critical minerals. For instance, it has a majority ownership of 70% of the cobalt mined in the Democratic Republic of Congo, the world’s largest supplier of the metal.
“Communist China is definitely not a friend of this country and they will continue to bleed us with this,” said Burchett. “They go into these countries and offer to subsidize something for them at a ridiculously low price.”
Sens. Tom Cotton, R-Ark., and Mark Kelly, D-Ariz., both of whom sit on the armed services committee, have also introduced legislation to create a separate reserve of strategic rare earth minerals while restricting the use of Chinese rare earth minerals in advanced defense technology.
Kelly told Defense News the additional rare earth mineral reserve would be akin to the Strategic Petroleum Reserve.
“If we do wind up in a conflict with a country which is where we’re getting our lithium or cobalt, for instance, or other rare earths, we could go to the strategic reserve,” Kelly told Defense News.
Energy Secretary Jennifer Granholm praised the idea during a Senate Armed Services Committee hearing on Thursday while thanking Congress for including funding for rare earth minerals as part of the $40 billion Ukraine aid package the Senate passed the same day.
Congress allocated $600 million in funding in that legislation for President Joe Biden to invoke the Defense Production Act to expand access to critical minerals and expedite missile production.
Last year, Biden signed an executive order to shore up U.S. supply chains that included a directive for the Defense Department to submit a report identifying risks in the critical mineral supply chain. That built upon a 2020 executive order from former president Donald Trump authorizing grants and loan guarantees in the procurement of critical minerals.
Bryant Harris is the Congress reporter for Defense News. He has covered U.S. foreign policy, national security, international affairs and politics in Washington since 2014. He has also written for Foreign Policy, Al-Monitor, Al Jazeera English and IPS News.
