Just sipping black coffee and waking up quickly with the charismatic Jack Lifton moderating and kicking off the Rare Metal Summit in LA’s first panel this morning, keynote panelists include the following: David Cammarota, Director-Office of Material Industries, US Department of Commerce; and John Neumann, Assistant Director for the US Government Accountability Office.
One of the conversations last night was about why Goldman Sachs pulled out of MOLYCORP. A theory that was related was perhaps they withdrew so that the US government could invest and fund a processing plant. With financing directly from the US Government to Goldman Sachs already, it seemed to me (theory only) that perhaps they needed to withdraw from MOLYCORP so that it did not appear that they were ‘double dipping’. Clearly I do not have the answer but this panel is well versed in the government’s interest in not being dependent on the Chinese for rare metals and was interested in this esteemed panels opinions…
Picking up comments relating to questions from both Jack and he audience, Dr. Long speaks first on HR4866 – a bill that puts together the components of the policy that sets forth the infrastructure for supply change issues relating to rare metals. Explaining that the bill is still in draft format and it is “very likely that nothing will happen before the November hearings” he goes on to say “I want to remind you that we do not have an energy bill” and he addresses how this is a multi-year process. The bill is described as basically an outline for a process where rare metal companies will be able to access US government assistance. Jack’s comment was that “It is amazing to me that the awareness of this bill is just hitting Washington…”
David Cammarota was speaking to how the rare metal issue is a supply chain challenge, not just a mining issue. Commenting on how the commercial and government are intertwined and insuring a competitive commercial space will insure sufficient military supply. Several members discuss stockpiling very lightly and reference that the defense department would be better equipped to answer the question on this topic and that stockpiling is reserved for strategic metals only.
Question about international alliances towards dealing with the issues of working together leaned towards asking my MOLYCORP question. The audience member asked whether or not the US and Canadian government had the infrastructure in place towards insuring that they are not competing together. For instance why have 2 expensive processing plants in the US and Canada and instead have one. The point was well received by the audience and the answers were intriguing.
One member in the audience explained how the GNP for Australia and Canada are heavily dependent on natural resources thus they had institutions in place to deal with this. The panel commented that this was not in place in the US nor was there an interest to be there and that the government’s interest in this variable was ‘unlikely’.
Based on this response, it seems unlikely that MOLYCORP will be financed by the US government towards the building of this processing plant. With this said, this does not preclude state funding; although listening to the news in Los Angeles this week where they are looking at closing government offices for 2 days of the week to save money, shorten school weeks to 4 days a week – this also seems unlikely…my female intuition says otherwise.