Ucore Rare Metals comments on the John S. McCain National Defense Authorization Act for Fiscal Year 2019, which was signed into law by the President of the USA this week. The new legislation prohibits the US Department of Defense from acquiring rare earth magnets from China.
“This is a turning-point in the re-establishment of an independent US rare earth industry,” said Jim McKenzie, President and CEO of Ucore. “It is also an important inflection point for rare earth investors. Rare earth magnets, or REMs, represent a technology of critical importance to the American military. Ucore’s planned Strategic Metals Complex, as a US based producer of high purity REEs, comes at a time when the US military will be actively pursuing these materials. The company is also uniquely equipped to step in and serve as a key source for rare metals resources, extraction and beneficiation technologies for the Department of Defense.”
“The signing of the 2019 NDAA into law is a pivotal moment in the resurgence of a US-based REE sector,” said Dean Popps, formerly the US Army’s most senior procurement official and Ucore Advisory Board Member. “Further risk to the nation’s strategic supply chain’s dependency on China has been reduced by the new law, which prohibits the Department of Defense’s purchase of Chinese-made magnets used in an array of military applications, from aviation and weapons systems, to supercomputers and satellites. This event is also an important signal to the defense industry, and its attendant defense establishment procurement officials and policy makers, to begin proactively reviewing all supply chains consistent with the intent of the new law.”
Section 871, along with other provisions of the bill that encourage the development and retention of critical technologies in the defense and technology industrial base, provide a strong statement of support for developing producers of strategic minerals. The bill includes a prohibition on the sourcing of REMs from China, Russia, North Korea and Iran, a significant embargo, given that over 90% of REM’s consumed by the US Military are currently produced by China alone. Section 871 will now need to be implemented by a rulemaking process within the Department of Defense in order to take effect.
Ucore Rare Metals is a development-phase company focused on rare metals resources, extraction and beneficiation technologies with near term potential for production, growth and scalability. In March 2015, Ucore announced the development of a joint venture with IBC for the deployment of Molecular Recognition Technology for REE and multi-metallic tailings processing applications in North America and associated world markets.
