Jeff Green offered his thoughts to Joe Gould of Defense News regarding the DoD’s proposal to raise spending limits under the Defense Production Act (DPA). The legislative suggestion, submitted to Congress for it to consider including in the National Defense Authorization Act for Fiscal Year 2021, would allow DoD to spend up to $350 million to address each of the five rare earths supply chain shortfalls identified by the Presidential Determinations issued last summer.
J.A. Green & Company, representing a number of clients with rare earths capabilities, has worked for more than a decade to ensure DoD can make critical DPA investments into domestic rare earths production infrastructure. An excerpt of the article is provided below:
“To me, this is the biggest thing that has happened to rare earths in a decade,” Jeffrey Green, a defense industry consultant and advocate for government intervention on rare earth materials, said Monday. “The policy shift is the government is realizing they have to put serious bucks into this.”
The U.S. government recently awarded contracts for heavy rare earth separation and issued solicitations for the processing of light separation and for neodymium magnets, which are used in Javelin missiles and F-35 fighter jets. Under current law, DoD cannot invest more than $50 million in DPA funds without additional congressional notification, but the Pentagon’s legislative proposal would raise this cap to $350 million, to invest in multiple projects.
These processes can be expensive, and the process for separating rare earth oxides can cost hundreds of millions dollars, Green said.
“The recent awards are like a drop in the bucket, for very small scale pilot programs. It’s nowhere near what they’d need to get a commercial facility, even to support DoD’s very small volume,” Green said. “They have to put big dollars in if they want to separate the oxide at a state-of-the-art facility that’s going to be anywhere close to Chinese pricing.”
The complete article is available here.