16 Nov BPC Action Priorities for Critical Mineral Provisions in the FY24 NDAA in Energy and Environment, National Security and Defense
As Congress discusses the FY24 National Defense Authorization Act, BPC Action urges incorporation of four critical mineral provisions in the final bill to help set the U.S. for economic and clean energy success.
1. National Defense Stockpile multi-year procurement for domestically processed rare earth elements (House, Sec. 181)
- What is it? Allows the National Defense Stockpile to enter into long-term procurement contracts with domestic rare earth element (REE) processing and recycling projects. The provision includes advance procurement authority, which allows the stockpile to pay projects upfront prior to delivery.
- Why is it important? Long-term contracts provide domestic processing projects with customer and price certainty, making the project a more attractive investment and decreasing the risk that price volatility will leave investors in the red. Additionally, advance procurement authority can provide projects with the working capital needed to kickstart production.
2. National Defense Stockpile critical materials pilot program (Senate, Sec. 1412)
- What is it? Establishes a new 5-year pilot program using “commercial best practices” for acquiring and disposing of critical materials.
- Why is it important? The new program could potentially use contracting tools, such as the long-term contracts for rare earth elements described above, that better suit the needs of domestic critical mineral projects. Agreements that provide project developers with customer and price certainty are needed to develop reliable sources for critical minerals.
3. DOD battery procurement supply chain transparency (House, Sec. 865)
- What is it? Requires that, to be eligible for procurement by DOD, any contractor that provides advanced batteries or advanced battery components must disclose the countries in which the lithium, nickel, cobalt, manganese, and graphite used in the battery were mined and processed as well as the countries in which the battery cells were manufactured. This requirement is already in place for rare earth magnets.
- Why is it important? Transparency is crucial to estimate the risk of critical mineral supply chain disruption and the environmental impact of sources. Greater transparency requirements will allow DOD to mitigate risks, bolster it’s supply chains, and create opportunities to shift reliance to more reliable producers.
4. University Affiliated Research Center for Critical Minerals (Senate, Sec. 865)
- What is it? Requires DOD to develop a plan to establish a new or expand an existing University Affiliated Research Center to increase DOD’s ability to conduct research, development, engineering, or work force expansion related to critical minerals for national security needs.
- Why is it important? The U.S. currently lacks the domestic workforce for mining and mineral processing needed to build out domestic supply chain capacity. This program can provide investment to develop the needed expertise as domestic critical mineral projects break ground.