WATCH: Sen. Kelly Highlights Economic & National Security Importance of Arizona Critical Mineral Production in Senate Hearing

Yesterday, during a Senate Energy and Natural Resources Committee (ENR) hearing, Arizona Senator Mark Kelly highlighted Arizona’s leadership in critical mineral production and examined China’s dominance of global critical mineral markets.  

As mineral demand accelerates to support production of clean energy technologies, China’s dominance in critical mineral production poses serious economic and national security concerns. To combat this, the Inflation Reduction Act and Bipartisan Infrastructure Law created incentives for companies to source critical minerals domestically or from countries within a free trade jurisdiction. However, this has spurred Chinese companies to take advantage of U.S. tax breaks by forming joint ventures with critical mineral producers within free trade jurisdictions.  

During the hearing, Kelly highlighted the importance of combating these Chinese joint ventures competing with U.S. critical mineral producers.

Click here to watch the exchange. See the transcript below: 

Sen. Kelly: Thank you. Dr. Yergin, we have a few companies in Arizona—one in particular is a business called Urbix—that does processing of graphite. I’m concerned that some of the joint ventures that are currently being formed in some of these free-trade jurisdictions with Chinese partners are skirting the intent of the Bipartisan Infrastructure Law and Inflation Reduction Act. It’s potentially subsidizing our competitors instead of helping businesses like the one I mentioned—Urbix, who is in Maricopa County and processes graphite.  

So, Dr. Yergin, have you seen these joint ventures? What do you know about them? What impact do you expect that they have on U.S. domestic jobs and U.S. production?  

Dr. Daniel Yergin, Vice Chairman of S&P Global:  I have not studied them in detail, but the reality was that until about 2019, 2020, people just were not paying attention much to this issue at all. And the way that the industry developed globally is with China being a predominant player. So, I think the reality is that those entities exist. I don’t know whether those specific ones are competing with the companies you are talking about. But this issue of critical minerals is so entangled with our changing relationships with China, and what they were four or five years ago. It is not going to get easily untangled at this point. But you can try and continue to shift balance, which is what recent legislation is aiming to do.  

Sen. Kelly: We’ve heard that as Urbix and companies like them try to sign contracts it’s often challenging because of the joint ventures that exist in these free trade jurisdictions. So, it does need to be addressed. We have to get this back on track.