HALIFAX, NOVA SCOTIA--(Marketwired - Mar 7, 2017) - Ucore Rare Metals, Inc. (TSX:UCU)(OTCQX:UURAF) ("Ucore" or the "Company") is proud to announce its support of the Materials Essential To American Leadership and Security Act of 2017 (the "METALS Act" or the "Act"). The associated House of Representatives (H.R.) Bill, sponsored by California Congressman, Rep. Duncan Hunter was introduced today. http://ucore.com/METALS-act
The purpose of the METALS Act is to re-establish a domestic industrial base for the production of rare earths, reduce existing dependence on foreign nations, and ensure the Department of Defense always has a secure supply chain for critical materials regardless of the geopolitical environment.
The Act recognizes that the People's Republic of China dominates the supply chain for the production of rare earth elements, controlling more than 90% of the world's production and that they have used this dominance geopolitically in the past by selectively enacting a de facto embargo on the export of rare earth elements. Additionally, the Act acknowledges that a host of advanced defense related applications would be rendered ineffective if the United States' access to foreign sources of these materials was restricted. The potential for China to suspend exports of these crucial materials exists to today.
"Ucore has worked closely with a number of key legislators to affect the intent and the potential of this bill," said Jim McKenzie, President and CEO of Ucore. "The Act promotes the development of a domestic industrial base for the production of strategic and critical materials, and is in direct keeping with our present objective of establishing a US based Strategic Metals Complex (SMC). With a new administration focused on trade issues vis a vis China, our timing could not be better."
"We're pleased to support the METALS Act and the goal of providing the United States with a domestic source of these critical materials," continued McKenzie. "The Act is a concrete step toward developing a domestic industrial base for the production of strategic and critical materials, including rare earths. Further, we support provisions prohibiting the sale of US rare earth assets to certain foreign parties. Ucore strongly believes a domestic industrial base for the production of rare earths is essential to ensuring safe and secure defense supply chains and is in the best interests of U.S. national security."
To accomplish the foregoing, the METALS Act proposes to establish the Strategic Materials Investment Fund ("SMIF" or the "Fund") to provide 5-year, interest-free loans to companies who succeed in developing new production or manufacturing techniques for strategic and critical materials. These investments will ensure a sustainable domestic supply of rare earth elements by investing in U.S. suppliers and businesses. Additionally, the Fund would reimburse original equipment manufacturers for cost increases as a result of procuring strategic and critical materials from domestic sources, in the event that these materials were more expensive than those produced in foreign countries as a result of unfair trade or labor practices, or predatory pricing being introduced to impact global competition in the sector.
Additionally, the Act would implement a prohibition on the sale of rare earth assets located in the United States to any individual, entity, or subsidiary thereof, from either The People's Republic of China or the Russia Federation. The potential prohibition comes shortly after the Wall Street Journal reported that a group with ties to Russian billionaire Vladimir Lorich is attempting to take control of Mountain Pass, the rare earth mine formerly operated by Molycorp Inc. See the following link: https://www.wsj.com/articles/russia...u-s-rare-earths-mine-mountain-pass-1486485426
The days of the dragon continuing to produce rare earths below the cost of production may soon be coming to an end with Uncle Sam now taking measured to ensure its own domestic supply chain gets established. There will be incentives for domestic producers and incentives for buyers to purchase from US producers.
Appears Uncle Sam has just played its rare earth Trump card ....... and will remove the geopolitical incentive for the Dragon to continue to sell rare earths below the cost of production.
NTU Price at posting:
12.0¢ Sentiment: Buy Disclosure: Held
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