Ucore Comments On The Passage Of Domestic Rare Earths Legislation By The US House Of Representatives

HALIFAX, NOVA SCOTIA, Oct 07, 2010 (MARKETWIRE via COMTEX) — Ucore Rare Metals Inc. (“Ucore” or the “Company”) is pleased to comment on the bipartisan passage of H.R. 6160, the Rare Earths and Critical Materials Revitalization Act of 2010 (“the Act”), by the U.S. House of Representatives. The Act incorporates amendments to the National Materials and Minerals Policy, Research and Development Act of 1980 and other proposals to further the establishment of a domestic supply chain for rare earths in the United States.

The Act calls for a program of research, development, and commercial application to assure the long-term secure and sustainable supply of rare earth materials sufficient to satisfy the national security, economic well-being, and industrial production needs of the United States. The program will be designed to support activities from the exploration and discovery of rare earth materials through to the development of new or improved processes and technologies utilized in the industry.

Additionally, the Act calls for a Temporary Program for Rare Earth Materials Revitalization, authorizing the Secretary of Energy to make loan guarantees for projects including the separation and recovery of rare earth materials from ore or other sources and further downstream processing, including the preparation of oxides, metals, alloys or other forms of the materials needed for national security, economic well-being or industrial production purposes. The Act contemplates cooperation between public and private sector participants to achieve a complete rare earth materials production capability in the United States within 5 years of enactment of the Act.

“The passage of this Act by the House further demonstrates policy makers’ commitment to the re-establishment of a US domestic supply chain for rare earth materials,” said Jim McKenzie, President and CEO of Ucore. “We’ve recently seen China’s willingness to use their near monopoly on the supply of rare earth products as a diplomatic tool, which underscores the necessity for cooperation between private and public sectors in the U.S. to assure a stable supply of these materials which are so crucial to domestic security and economic well-being. The five year timeframe contemplated by the legislation reflects the urgency of the situation and the necessity of securing this supply in the near term. As Ucore transitions from exploration to mine scoping and development activities in 2011, the advantage of prospective financial guarantees and expediting assistance from Federal agencies can’t be overstated.”

Further legislation with respect to the supply of rare earth materials is also making its way through the legislative process. The Rare Earths Supply-Chain Technology and Resource Transformation Act of 2010, or ‘RESTART Act’ is currently being considered by the Subcommittee on Trade.

The RESTART Act, recently amended by Senator Murkowski of Alaska (R), incorporates a number of proposals, including the creation of an interagency working group consisting of representatives appointed by the Secretaries of Commerce, Defense, Energy, Interior, and State, as well as representatives from United States Trade and the Office of Science and Technology for the purposes of reestablishing a competitive domestic rare earth supply chain. The RESTART Act also calls for the provision of loan guarantees to rare earth industry participants, as well as the stockpiling of rare earth materials on an interim basis. Under this measure, the Administrator of the stockpile would be authorized to purchase necessary rare earth materials from China for a period of 5 years.

The RESTART Act further calls for a prioritization of Defense Production Act projects which address the domestic rare earth supply chain. Under the proposed legislation, within 180 days of the enactment, the Secretary of Defense will be required to issue a report describing past, current and future Defense Production Act projects to address the domestic rare earth supply chain, or to justify the lack thereof.

Within 90 days after the enactment of the RESTART Act, the Secretaries of Commerce, Interior, State, Defense and Energy will be called upon to issue guidance to rare earth industry related to obtaining loan guarantees under a number of available programs.

“While these Acts together promise to give U.S.-based rare earth producers a remarkable edge in the race to replace specialty metals now dominated by China, very few domestic projects have the qualifications of Bokan as a strategic military and technological asset,” said Jack Lifton, a leading REE expert and a party to the initial drafting of proposed RESTART legislation. “As the largest historically documented Heavy rare earth deposit in the U.S., Bokan is a counterpoint to Molycorp’s primarily Light rare earth deposit at Mountain Pass in California. Together, these two deposits, located in relative proximity to each other and on U.S. soil, have the potential of liberating the U.S. from non domestic rare earth dependencies in the near term.”