Advanced Technologies:

Strengthened Federal Approach Needed to Help Identify and Mitigate Supply Risks for Critical Raw Materials

GAO-16-699: Published: Sep 7, 2016. Publicly Released: Oct 3, 2016.

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What GAO Found

Federal agencies are primarily focused on two areas of activity related to critical materials supply—assessing risk and supporting research. For example, the Department of Energy (DOE) has conducted two criticality assessments on materials important to clean energy applications and manages the Critical Materials Institute—a 5-year, $120 million investment aimed at mitigating risks by diversifying supply, providing alternatives to existing materials, and improving recycling and reuse. In addition, agencies conduct a range of other critical materials related activities, including stockpiling or producing materials, and reviewing and approving resource extraction projects, among other efforts.

The federal approach to addressing critical materials supply has areas of strength but is not consistent with selected key practices for interagency collaboration and faces other limitations, as shown below.

Selected Strengths and Limitations of Federal Critical Materials Activities

According to its charter, the Subcommittee on Critical and Strategic Mineral Supply Chains (Subcommittee)—co-chaired by the Office of Science and Technology Policy (OSTP), DOE, and the Department of the Interior—is to facilitate a strong, coordinated effort across its member agencies on critical materials activities. However, the Subcommittee's efforts have not been consistent with selected key practices for interagency collaboration, including agreeing on roles and responsibilities; establishing mutually reinforcing or joint strategies; and developing mechanisms to monitor, evaluate, and report on results. For example, some member agencies do not have a clear role in the Subcommittee's efforts and have had limited or no involvement in its work. By taking steps to actively engage all member agencies in its efforts and clearly define roles and responsibilities, the Subcommittee would have more reasonable assurance that it can effectively marshal the potential contributions of all member agencies to help identify and mitigate critical materials supply risks.

Other limitations to the federal approach to addressing critical materials supply include limited engagement with industry and a limited focus on domestic production. For example, the Department of Commerce (Commerce) is required by law to identify and assess cases of materials needs. However, Commerce does not solicit information from stakeholders across a range of industrial sectors. As a result, Commerce may not have comprehensive, current information across a range of industrial sectors to help it identify and assess materials needs.

Why GAO Did This Study

Certain metals, minerals, and other “critical” raw materials play an important role in the production of advanced technologies across a range of industrial sectors and defense applications. Recently, concentration of the supply of some critical materials under foreign control has renewed questions about the U.S. government's and industry's ability to address potential supply disruptions.

GAO was asked to examine U.S. efforts to identify and strategically plan for critical materials supply issues. Among other objectives, this report (1) describes federal agencies' activities related to the supply of critical materials and (2) evaluates the federal government's approach to addressing critical materials supply issues. GAO reviewed relevant laws, agency documents, and academic studies; interviewed federal officials; and conducted a two-stage web-based survey of a nongeneralizable sample of critical materials experts selected to cover a range of subject matter areas.

What GAO Recommends

GAO is making six recommendations, including that OSTP take steps to improve interagency collaboration by, for example, defining Subcommittee member roles and responsibilities and that Commerce engage with stakeholders to continually identify and assess critical materials needs across industrial sectors. Commerce agreed. OSTP agreed with one and neither agreed nor disagreed with the other four recommendations but discussed how roles and responsibilities are defined, among other things. GAO continues to believe these steps are needed, as discussed in the report.

For more information, contact John Neumann at (202) 512-3841 or neumannj@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: In December 2016, Commerce provided information on its implementation of the recommendation from GAO-16-699. Commerce stated that it had developed an action plan consisting of the following steps: (1)consulting with relevant offices and agencies, including: OSTP, DOD, the U.S. Geological Survey, DOE, the U.S. International Trade Commission, the Bureau of Industry and Security, the National Institute of Standards and Technology, and the National Oceanic and Atmospheric Administration; (2) determining criteria to be used when it is necessary to collect information to identify and assess critical materials needs; (3) determining appropriate steps, which might include: (a) developing a summary of information that federal agencies currently collect on the domestic and international supply of critical raw materials; (b)soliciting input from a broad range of industries through a Federal Register notice; (c)assessing aggregate information, as allowable under law, that is submitted through the Miscellaneous Tariff Bill process over the course of Q1-2 of fiscal year 2017; and (d)consulting with federal advisory groups for advice; (4) determining the audience for collected information and methodology for information dissemination; (5) determining the process for identifying further information collection needs and methodology for disseminating collected information; and (6) determining the timeline and responsibilities for information collection and distribution. In an April 2017 update, Commerce stated that it had identified points of contacts in 7 of the 8 agencies listed in its action plan and is in the process of contacting them for input. Commerce stated that it hoped to identify an appropriate contact in the 8th agency in the near future. Commerce stated that it had also drafted questions to ask the agencies in order to implement the action plan. Commerce did not provide a timeframe for when it expected to complete implementation of the action plan.

    Recommendation: To fulfill the role assigned to it under the 1980 Act, the Secretary of Commerce should engage with industry stakeholders and continually identify and assess critical materials needs across a broad range of industrial sectors.

    Agency Affected: Department of Commerce

  2. Status: Open

    Comments: In February 2017, OSTP provided information on its efforts to implement recommendations from GAO-16-699. OSTP stated that an increasing number of agencies participate in Subcommittee discussions and activities, with the last several meetings having had strong engagement from agencies that had not previously been involved, including the Department of Homeland Security and the U.S. Department of Agriculture's Forest Service. OSTP indicated that when the Subcommittee's charter is considered for renewal in spring 2017, it will reach out to all federal agencies with relevant responsibilities to discuss their roles in the Subcommittee's efforts and encourage them to name a lead representative and regularly participate. However, OSTP did not provide information about any plans to more clearly define the roles and responsibilities of the Subcommittee's member agencies. OSTP stated that it prefers flexibility, as this facilitates cooperation on topics of mutual interest and better accommodates changing circumstances and areas of focus.

    Recommendation: To enhance the ability of the Executive Office of the President to coordinate federal agencies to carry out the national materials policy outlined in the 1980 Act, and to strengthen the federal approach to addressing critical materials supply issues through enhanced interagency collaboration, the Director of the Office of Science and Technology Policy, working with the National Science and Technology Council's Subcommittee on Critical and Strategic Mineral Supply Chains and agency leadership, as appropriate, should agree on and clearly define the roles and responsibilities of member agencies and take steps to actively engage all relevant federal agencies in the Subcommittee's efforts.

    Agency Affected: Executive Office of the President: Office of Science and Technology Policy

  3. Status: Open

    Comments: In February 2017, OSTP provided information on its efforts to implement recommendations from GAO-16-699. However, the information OSTP provided did not include any details related to developing joint strategies that articulate common outcomes and identifying contributing agencies' efforts.

    Recommendation: To enhance the ability of the Executive Office of the President to coordinate federal agencies to carry out the national materials policy outlined in the 1980 Act, and to strengthen the federal approach to addressing critical materials supply issues through enhanced interagency collaboration, the Director of the Office of Science and Technology Policy, working with the National Science and Technology Council's Subcommittee on Critical and Strategic Mineral Supply Chains and agency leadership, as appropriate, should develop joint strategies that articulate common outcomes and identify contributing agencies' efforts.

    Agency Affected: Executive Office of the President: Office of Science and Technology Policy

  4. Status: Open

    Comments: In February 2017, OSTP provided information on its efforts to implement recommendations from GAO-16-699. However, the information OSTP provided did not include any details related to developing a mechanism to monitor, evaluate, and periodically report on the progress of member agencies' efforts.

    Recommendation: To enhance the ability of the Executive Office of the President to coordinate federal agencies to carry out the national materials policy outlined in the 1980 Act, and to strengthen the federal approach to addressing critical materials supply issues through enhanced interagency collaboration, the Director of the Office of Science and Technology Policy, working with the National Science and Technology Council's Subcommittee on Critical and Strategic Mineral Supply Chains and agency leadership, as appropriate, should develop a mechanism to monitor, evaluate, and periodically report on the progress of member agencies' efforts.

    Agency Affected: Executive Office of the President: Office of Science and Technology Policy

  5. Status: Open

    Comments: In February 2017, OSTP provided information on its efforts to implement recommendations from GAO-16-699. OSTP stated that current efforts to update the early warning screening methodology have refined, and in some cases augmented, the materials being screened based on available, regularly collected data. The Subcommittee will continue to consider incorporation of additional materials. OSTP further stated that, with respect to data availability limitations, the report's suggestion that the Subcommittee "better work with member agencies to address existing data limitations" is sometimes not actionable because private entities and foreign governments may be unwilling or unable to provide (or even collect) such data. OSTP stated that the Subcommittee will, however, continue to explore approaches to improve data availability and granularity, such as through proposals for revisions to the Harmonized Tariff Schedule or to the North American Industry Classification System or other such systems.

    Recommendation: To enhance the ability of the Executive Office of the President to coordinate federal agencies to carry out the national materials policy outlined in the 1980 Act, and to broaden future applications of the early warning screening methodology, the Subcommittee should take the steps necessary to include potentially critical materials beyond minerals, such as developing a plan or strategy for prioritizing additional materials for which actions are needed to address data limitations.

    Agency Affected: Executive Office of the President: Office of Science and Technology Policy

  6. Status: Open

    Comments: In February 2017, OSTP provided information on its efforts to implement recommendations from GAO-16-699. OSTP stated that it concurs with the recommendation that the Subcommittee should examine approaches other countries or regions are taking to see if there are any lessons learned that can be applied to the United States. OSTP stated that the Subcommittee is sharing and discussing information on production in other regions, including a U.S.-led project (and other projects with U.S. involvement or support) under the Mining Task Force of the Asia-Pacific Economic Cooperation. OSTP stated that in the future, the Subcommittee expects to review experiences in other countries/regions to glean lessons learned. OSTP did not provide a time frame in reach it would review experiences in other countries/regions.

    Recommendation: To enhance the ability of the Executive Office of the President to coordinate federal agencies to carry out the national materials policy outlined in the 1980 Act, and to enhance the federal government's ability to facilitate domestic production of critical materials, the Subcommittee should examine approaches other countries or regions are taking to see if there are any lessons learned that can be applied to the United States.

    Agency Affected: Executive Office of the President: Office of Science and Technology Policy

 

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