U.S. Army Announces Base Lease Agreements with Critical Minerals Miners

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Written by Paul Wiseman for IIR News Intelligence (Sugar Land, Texas)

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Summary

Miners of graphite, lithium, boron, dysprosium and terbium will pay rent in kind at four military bases by funding and executing infrastructure improvements.

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Critical Minerals on Base

With the goal of "strengthening national defense and securing domestic supply chains," the U.S. Army last week announced conditional award of long-term leases to four U.S.-based minerals miners. The lease allows the companies to "design, finance, build, and operate critical mineral processing facilities," with each company on one of four army bases.

Paying for the lease "in kind," the miners would be required to fund and build general infrastructure improvements at their respective bases instead of sending a rent check.

Industrial Info Resources is tracking a total of five projects at the four bases:

• Anniston Army Depot, Bynum, Alabama - Empire State Mines, LLC, a wholly owned subsidiary of Titan Mining Corporation (battery-grade refining of graphite)
• Pine Bluff Arsenal, Jefferson County, Arkansas - Empire State Mines, LLC, a wholly owned subsidiary of Titan Mining Corporation (battery-grade refining of graphite)
• Red River Army Depot (New Boston, Texas) - EnergyX (lithium)
• Tooele Army Depot (40 miles southwest of Salt Lake City, Utah) - Ioneer USA Corporation (boron)
• Tooele Army Depot: REalloys (dysprosium, terbium)

According to the army's statement, these are preliminary agreements, with formal negotiations continuing. They hope to see development starting in 2027, with first operations beginning in 2028 (or sooner, according to the very optimistic statement).

The Army's Reasoning and Methods

It is no surprise that national security tops the listed reasons, with the U.S. importing the vast majorities of all minerals used in electronics in all areas, including weapons.

The vehicle for this is known as an Enhanced Use Lease (EUL). While the name was only formalized in 2001, the idea of repurposing underutilized space on military bases originated in the post-World War II environment, when the U.S. military found itself owning large parcels of land it could no longer fully utilize. It comes under Title 10 of the U.S. Code (U.S.C.) § 2667, originally enacted in August of 1956.

Essentially, "An EUL is a real estate agreement that allows the Army to lease non-excess, underutilized land to private-sector partners," said the army's statement.

Mutual benefits are a key part of the mix, said Dr. Jeff Waksman, principal deputy assistant secretary of the Army for Installations, Energy and Environment. "Leveraging our legal authorities and land, the U.S. Army is able to help nurture a critical minerals industrial base which equips and sustains America's Soldiers without putting any taxpayer dollars at risk."

Presidential Order Part of the Impetus

It was enacted by the Army's Strategic Capital Initiatives (SCI) an effort to partner with private enterprise and was based on President Donald Trump's executive order 14241.

Entitled "Immediate Measures to Increase American Mineral Production," it invoked the Defense Production Act (DPA) of 1950 to expand domestic mining and processing of critical minerals. Enacted during the start of the Korean war, the DPA directs federal agencies to fast-track permitting involving the use of federal lands for such operations. It also allows the government to require businesses to prioritize government contracts and to provide financial incentives to expand production.

While the DPA is a longtime law, this is the first time the Pentagon has used it to allow commercial mineral plants on U.S. military bases, reinforcing the idea that establishing a domestic supply chain of critical minerals is important for defense technologies in reducing reliance on China.

By the Numbers

• Four: Number of Army bases with pending projects
• Five: Total number of projects

Key Takeaways

• U.S. Army has preliminarily entered into agreements with critical minerals miners/processors allowing them to rent space at four bases.
• Payment will be in kind. In other words the processors will plan, fund and build infrastructure for the base instead of paying money.

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Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).