SJR 8-MINING/PROCESSING OF RARE EARTH ELEMENTS  2:18:39 PM CO-CHAIR SADDLER announced the next order of business would be CS FOR SENATE JOINT RESOLUTION NO. 8(RES), Supporting the continued and increased exploration, extraction, processing, and production of rare earth elements in the state; and urging the United States Congress to support efforts of the state to develop rare earth elements in the state for the benefit of the economic and national security of the United States. 2:18:48 PM CO-CHAIR FEIGE moved to adopt the proposed House committee substitute (HCS) for CSSJR 8, Version 28-LS0324\P, Bullock, 4/8/13, as the working document. REPRESENTATIVE TUCK objected for the purpose of discussion. 2:19:19 PM TREVOR FULTON, Staff, Representative Dan Saddler, Alaska State Legislature, informed the committee the first change in Version P is found on page 3, line 2, in that the word "state" was deleted to imply that the Alaska State Legislature urges not just state agencies, but all agencies, both state and federal. Also on page 3, line 6, the FURTHER RESOLVED was rewritten so that federal agencies are directed to work with state agencies. Both of these changes were made to adhere to the guidelines of joint resolutions, which are used to express the view or wish of the legislature to the President, the Congress, U.S. government agencies or other state governments, whereas concurrent resolutions are used for the internal business of the legislature and for requesting action of executive state agencies. REPRESENTATIVE TUCK removed his objection. CO-CHAIR SADDLER would like the record to reflect that the sponsor wished to include an additional Whereas that would urge the following: the Alaska Industrial Development and Export Authority (AIDEA) to expedite the review and due diligence necessary to assess and finance participation in a specific project, that being the Bokan Mountain [Rare Earths Project] for rare earth elements. CO-CHAIR SADDLER discouraged the addition of this clause because a joint resolution is aimed at the President and the U.S. government, and the aforementioned clause is more appropriate for a concurrent resolution. However, he expressed his full support of the sponsor's efforts to encourage AIDEA's rapid review and due diligence of the Bokan Mountain project. 2:22:09 PM JESSE LOGAN, Staff, Senator Lesil McGuire, Alaska State Legislature, further explained the House committee substitute is a result of the awareness of the differences between a joint resolution and a concurrent resolution, and the changes in no way imply a lessening of the sponsor's support for the identified projects; in fact, SJR 3 passed in the Senate 20-0. Mr. Logan paraphrased from the sponsor statement as follows: SJR 8 is supporting the continued and increased exploration, extraction, processing, and production of rare earth elements in the state; and urging the United States Congress to support efforts of the state to develop rare earth elements in the state for the benefit of the economic and national security of the United States. Rare Earth Elements possess unique chemical, electrical, and physical properties; they're indispensable for national defense military equipment such as night vision goggles, precision guided weapons, drones, radar systems and satellites, and clean energy technology, hybrid-electric cars, vehicles, wind turbines, solar panels, and consumer goods such as portable communication devices. Industrial uses include catalytics, phosphorus, polishing compounds, pollution control devices, illumination screens, and optical quality glass. MR. LOGAN stated that the demand for rare earth elements (REEs) has increased 100 percent in the last 20 years, and 95 percent of the world's supply is controlled by China, which is currently reducing its export quotas. This poses a national security and energy security risk for the U.S. However, mineral resources make up a majority of Alaska's economic assets, and Alaska has several prospects for the production of REEs, the most promising of which is the Bokan Mountain deposit, putting Alaska in position to become the U.S. leading supplier of REEs. Increased exploration for REEs, along with processing facilities, can create new opportunities for Alaskans, in contrast to the existing mining extraction in Alaska that does not provide for the export of value-added products. Mr. Logan concluded, saying the resolution supports increased exploration, extraction, processing, and production of REEs, urges federal agencies to expedite consideration of permits, and urges Congress to support these efforts. 2:24:40 PM REPRESENTATIVE TUCK asked how REE mining increases the opportunity for Alaska to export value-added products. MR. LOGAN said to do so the state would have to develop manufacturing along with the extraction of elements. At Bokan Mountain, there is the opportunity to develop a road to Craig and access to a deepwater port. In further response to Representative Tuck, he said manufacturing REEs in support of nanotechnology is possible. REPRESENTATIVE JOHNSON said the only processing plants for REEs in the world are in China and Australia. Building a processing plant in Alaska would require a source of natural gas and electricity, which could be supplied by an in-state gas line. He called attention to an application available on the Ucore Rare Metals Inc. web site that is a source for information on REEs, and quoted a price for a specific element. China is trying to control the entire supply chain of REEs from extraction to the export of a finished product. CO-CHAIR FEIGE recalled the U.S. used to have REE mines, the largest of which was in Mountain Pass, California, but they were regulated out of existence. He cautioned that the traditional manufacturing process of REEs encompasses significant environmental impacts if improperly managed. 2:29:01 PM KEN COLLISON, Chief Operating Officer, Ucore Rare Metals Inc., informed the committee the technology used today was developed in Montana and from an environmental perspective, is a totally different process than that used in China. The new process uses a series of columns to separate the individual rare earths, thus environmentally, there are not the issues raised by the solvent extraction process. In addition, the reagents are recycled and nitric acid is used instead of sulfuric acid. Further, a sorting technology is used to sort the ore and all of the tailings, with some of the waste rock, will go back underground. As an aside, he said the Massachusetts Institute of Technology (MIT) recently identified Ucore's project as an example of sustainable mining. In response to Co-Chair Saddler, he advised there are light and heavy REEs; in fact, light REEs are not rare, and the mine at Mountain Pass is a light REE mine. Bokan Mountain is unique in that 40 percent of the deposit is heavy REEs, which are critical to the automotive and green energy industries, Boeing, and the U.S. Department of Defense (DoD). In further response to Co-Chair Saddler, he said the Bokan Mountain deposit could supply about one-half of the current U.S. demand for dysprosium. 2:32:34 PM REPRESENTATIVE P. WILSON asked why the U.S. Department of Homeland Security (DHS) is interested in the project. MR. COLLISON said the main interest is from DoD, which is interested in the technology of the production of dysprosium, and has agreed to fund Ucore's pilot plant. He was unaware of interest from DHS. CO-CHAIR SADDLER opened public testimony, and after ascertaining no one wished to testify, closed public testimony. 2:34:05 PM REPRESENTATIVE JOHNSON pointed out China's REEs are mined on a large plain, and the procedure is to remove two feet of surface, process that, and return the earth. This procedure is very disruptive environmentally, without protections for ground water or air, and unhealthy for people and the environment. Because REEs are very valuable and compact, a small shaft mine has very little environmental impact and the tailings are mixed with concrete for fill. He opined this type of mining is environmentally as un-intrusive as possible. Representative Johnson relayed his knowledge of REEs began several years ago at a seminar on REEs that was focused on batteries and their use in hybrid cars and micro-engines. He restated his support for the resolution, saying "this is a totally different outlook on mining than anything we've seen in Alaska." REPRESENTATIVE P. WILSON added that the refining process is a new process and completely different than in the past. She said the mine will expand economic activity in Southeast and can be done in an environmentally safe manner. 2:37:14 PM CO-CHAIR FEIGE moved to report the House committee substitute for CSSJR 8, Version 28-LS0324\P, Bullock, 4/8/13, out of committee with individual recommendations and the accompanying zero fiscal notes. There being no objection, HCS CSSJR 8(RES) was reported from the House Resources Standing Committee.