Watch Video Here

WASHINGTON - U.S. Senator Roger Wicker, R-Miss., Chairman of the Senate Armed Services Committee, today led a hearing to receive testimony on rebuilding American critical minerals supply chains.

The Honorable Michael P. Cadenazzi, Jr., Assistant Secretary of Defense for Industrial Base Policy, Department of Defense, and Mr. Jeffrey Frankston, Acting Deputy Assistant Secretary of Defense for Industrial Base Resilience, Department of Defense, both appeared before the committee.

In his opening remarks, Chairman Wicker stressed the urgent need to strengthen America's critical mineral supply chains, warning that China's dominance poses a serious national security risk. He called for sustained investment, allied cooperation, and clear legal authorities to rebuild a resilient and secure supply chain.

Read Chairman Wicker's hearing opening statement as delivered.

The committee meets today to discuss the state of our country's critical mineral supply chains and what can be done to make them stronger and more resilient.

It is no exaggeration to say that America's resilience on Chinese critical minerals represents one of our greatest strategic vulnerabilities. Twice last year, Chinese Communist Party leader Xi Jinping threatened to cut off exports of Chinese rare earths, this would have brought American defense manufacturing to its knees and deeply damaged the U.S. economy.

Our advanced weapons systems and key parts of our civilian economy rely on critical minerals-materials that are largely imported from China. Specifically, America imports over 70 percent of our rare earths from China. These elements are the backbone of permanent magnets and perhaps the most important component for phones, cars, and military systems. More than 60 percent of American antimony comes from China. Antimony is a necessary ingredient for many explosives, electronics, and batteries.

I could go on with other examples, but the simple point is this: The scale of China's critical minerals domination is wholly unprecedented.

This situation is untenable for America's national security and economic prosperity. The good news is that the U.S. government is forming a plan, which will simultaneously re-establish critical minerals as a global free market and significantly increase American mining and production of these key elements. This effort will take more than a decade. It will face setbacks. It cannot be achieved without leaning on our allies and partners. And it will be expensive. But it is a necessary risk.

The Pentagon has been and will be at the center of these efforts, given the centrality of critical minerals to our weapons manufacturing.

And that brings us to the committee's interest in this matter. Joining us today are two Pentagon officials: Mr. Mike Cadenazzi, Assistant Secretary of Defense for Industrial Base Policy, and Mr. Jeff Frankston, Acting Deputy Assistant Secretary of Defense for Industrial Base Resilience.

Both Mr. Cadenazzi, Mr. Frankston, and the teams they lead have done important work. They performed a deep analysis of both our military's requirements for critical minerals and the state of industrial production from mining to refining across the globe. That data-driven approach is leading to new investments by the Industrial Base Fund, the Defense Production Act, and the National Defense Stockpile. It's also driving interagency investments from the Development Finance Corporation, the Department of Commerce, and others. It is imperative that our investment strategy remains closely tied to the areas of greatest military need.

Rebuilding America's critical mineral supply chains will require additional investments. Last year's defense reconciliation bill included $5 billion dollars for the Industrial Base Fund, $2 billion for the National Defense Stockpile, and a $100 billion loan limit for the Office of Strategic Capital. Those appropriations have already paid dividends. Last year, the Pentagon signed deals with MP Materials and a consortium of Vulcan, Re-Element, and Corning for magnet production. Another investment went to Element USA, which will make progress on obtaining gallium and scandium from a recycling process. We have brought Australia, Brazil, and Saudi Arabia into deals where mining or refining opportunities do not exist here in the United States.

The good news is that we do not need to outspend Communist China on this effort. We can leverage our private capital markets, one of our few remaining comparative advantages against Beijing. Many of our allies and partners have incredible mining and refining opportunities. Dozens of countries are poised to ditch the predatory debt-trap diplomacy Beijing has foisted upon them in this area.

As to private capital markets, I appreciate the Pentagon's use of innovative financial tools to power these deals. In some cases, Congress has spoken clearly on these tools. The committee created the Office of Strategic Capital loan program three years ago through the Biden administration. Since then, we have remained intimately involved in amending its legislation. In other cases, such as the use of equity-based investments, little law currently exists.

I believe these equity-based investments make good strategic sense in many cases, particularly where no free market exists and where we have seen aggressive Chinese economic warfare. However, opinions range wildly between and within our two political parties. While not public, Ranking Member Reed and I had a long series of discussions with our House counterparts last year about legislation regarding equity investments. I anticipate that conversation will continue in earnest this year.

This legislation is both important and urgent, because rebuilding America's critical minerals supply chains will take more than a decade. We must give the free markets confidence that America's approach will stand the test of time and succeed in unshackling the world from Beijing's market domination. To do that, we need effective government tools built on a solid foundation of law and bipartisan support.

This year, the committee has much work to do to help in this endeavor. We will discuss equity as an investment tool. We will examine the need for continued multi-billion dollar investments in this area. We will consider further improvements to the National Defense Stockpile authorities. And we will expect improvements in communication from Pentagon leadership on our investment strategy. Congress understands the need to execute quickly, but that cannot excuse a lack of communication and partnership between the Congress and the administration.

I hope today's hearing is the beginning of a historic year, in which this committee and the Trump administration work together to rebuild America's supply chains.