Supporting Statement

SUPPORTING STATEMENT
U.S. Department of Commerce Bureau of Industry and Security
The Effect of Imports of Neodymium-Iron-Boron (NdFeB)
Permanent Magnets on U.S. National Security
[Herein referred to as NdFeB magnets]
OMB Control No. 0694-0120

A. Justification

1. Explain the circumstances that make the collection of information necessary.

On September 21, 2021, the Secretary of Commerce self-initiated an investigation to determine the
effect of imports of Neodymium-Iron-Boron (NdFeB) magnets on U.S. national security
requirements. The investigation must be completed by June 18, 2022. In support of this
investigation, the Bureau of Industry and Security (BIS), Office of Technology Evaluation (OTE)
is conducting a survey and assessment focused on the imports, distribution, and production of
NdFeB magnets and components used in the manufacture of NdFeB magnets, including rare earth
ore and concentrate, rare earth carbonates, rare earth oxides, and constituent alloys (hereafter
“NdFeB magnet components”) by U.S. companies and the corresponding impacts on the national
defense.

The resulting data will be used to support this investigation conducted under Section 232 of the
Trade Expansion Act of 1962, as amended. The principal goal of this survey effort is to assist BIS
in determining whether NdFeB magnets are imported into the United States in such quantities or
under such circumstances as would threaten or impair the national security of the United States.
The survey will also assist in determining the health and competitiveness of the companies
affiliated with the import, distribution, and production of NdFeB magnets and NdFeB magnet
components to assess their capabilities to support the national defense. In the long term, U.S.
Government stakeholders will be better informed to develop targeted strategies to ensure the

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availability and security of the NdFeB magnet supply chain network that supports U.S. national
defense systems and critical infrastructure.

The OTE survey is designed to provide detailed information on several categories related to NdFeB
magnet industry health and competitiveness. Information collected will include organizational data,
facility information, current and prospective production, purchases and suppliers, sales and
customers, employment, capital expenditures, R&D, intellectual property, recycling, competition
and challenges, and other topic areas. The resulting aggregate data will provide BIS detailed
information that is otherwise not available and is needed to effectively conduct its analysis.

During the design and development of the survey instrument, OTE gathered input from the
interagency, industry, and experts in academia. These engagements included contacts with the U.S.
Department of Defense’s Office of Industrial Policy and Defense Logistics Agency, the U.S.
Department of Energy, Arnold Magnetics, MP Materials, Urban Mining Company, USA Rare
Earths, and the University of Arizona.

OTE has authority under Section 705 of the Defense Production Act of 1950, as amended, and
Section 232 of the Trade Expansion Act of 1962, as amended, to conduct assessments and collect
information on the capabilities and capacity of the U.S. industrial base and domestic industries to
meet national defense requirements. These industrial base assessments are normally undertaken in
partnership with the U.S. Department of Defense and other agencies and typically focus on
manufacturing, workforce, resiliency, and financial and economic issues affecting key industrial
sectors or critical technologies.

The attached survey questionnaire, which covers historic 2017-2021 data and forecasted 2022-2026
data, is the primary source of information needed for a national security analysis of this type.

Pursuant to the abovementioned statutes and relevant delegations thereunder, OTE remains the
focal point for national security investigations and assessments among civilian federal agencies.
This includes mandatory data collection authority to carry out these responsibilities.

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2. Explain how, by whom, how frequently, and for what purpose the information will be
used. If the information collected will be disseminated to the public or used to support
information that will be disseminated to the public, then explain how the collection complies
with all applicable Information Quality Guidelines.

OTE intends to survey 50 organizations with facilities in the United States. This figure is
comprised of 40 organizations involved in the NdFeB magnet value chain, including rare earth
mining, the production of rare earth carbonates and oxides, alloying, magnet production, and
magnet distribution, and 10 organizations that are end-users of NdFeB magnets.

This survey is a one-time only request. Both quantitative and qualitative data obtained from the
survey responses will be held in a database for analysis, with public releases consisting only of
aggregate, nonproprietary results with no business confidential information.

This survey-based data is needed to assess the status of the organizations involved or considering
involvement in the importation, distribution, and production of NdFeB magnets and NdFeB magnet
components, and learn how U.S. national security, including the national defense, may be
threatened by imports of said products. Expository, qualitative responses are also used to
complement the statistical, quantitative information.

Through its analysis of the survey results, OTE will be better able to determine whether to
recommend further actions be taken by the President to adjust imports of NdFeB magnets if they
are found to threaten to impair the national security.

3. Describe whether, and to what extent, the collection of information involves the use of
automated, electronic, mechanical, or other technological techniques or other forms of
information technology.

To lessen the burden on respondents, OTE is asking organizations to submit Excel-based survey
responses. Each respondent will receive a personalized distribution letter signed by BIS

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management and a project overview fact sheet which outlines the scope of information required.
The letter will contain directions to the BIS website, where the respondent can gain access to the
instrument. This approach was used successfully for the 2020 Vanadium, 2020 Mobile Cranes,
2020 Electrical Steel, 2019 Titanium Sponge, 2019 Uranium, and 2018 Automotive 232
investigations. All six surveys were reviewed and approved by OMB.

The statistical information requested in the survey adheres closely with categories adopted in the
NdFeB magnet and NdFeB magnet components industries. Almost all responding organizations
will have the solicited information computerized and will be able to retrieve it in the format
requested. Select questions will require thought and discussion internally for proper responses.
These questions do not lend to computer automation but only require brief responses in the text
boxes provided.

4. Describe efforts to identify duplication.

The information sought in the survey is unique and not available from any other source, either
public or private. Some of the basic corporate data, such as address location, stock symbol and
leadership profiles, are submitted by companies to the U.S. Census Bureau. However, the Census
Bureau is precluded by law from releasing information on specific companies.

5. If the collection of information involves small businesses or other small entities, describe
the methods used to minimize burden.

Participants in this collection are importers, distributors, and producers of NdFeB magnets and
NdFeB magnet components. The survey is designed to minimize burden on all respondents. If for
any reason the respondent cannot complete the survey in Excel format, OTE will work closely with
the respondent to facilitate an alternate form of submission. Based on previous survey data
collections, OTE expects the vast majority of companies to respond electronically.

6. Describe the consequences to the Federal program or policy activities if the collection is

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not conducted or is conducted less frequently.

For the assessment of U.S. importers, distributors, and producers of NdFeB magnets and NdFeB
magnet components, a mandatory survey is the only method available for OTE to carry out its
responsibilities under the Defense Production Act of 1950, as amended. Without the survey
instrument, OTE could not obtain company specific information necessary to perform a robust,
accurate evaluation of the effect of imports of NdFeB magnets on the national security. Examples
of such information include current and planned production, capital expenditures, R&D, customer
and supplier data, and employment, among others.

The resulting dataset will allow OTE to benchmark industry performance, identify impacts of
imports on the NdFeB magnet supply chain, as well as determine the resulting impact on the
national security. If industry was not surveyed in such detail, the investigation would not determine
the effects of NdFeB magnet imports on the national defense.

7. Explain any special circumstances that require the collection to be conducted in a
manner inconsistent with OMB guidelines.

There are no special circumstances that will result in the collection of information in a manner
inconsistent with the guidelines of 5 CFR 1320.6. Survey responses will of course contain
business confidential information, all of which will be protected by the Bureau of Industry and
Security (BIS).

8. Provide information of the PRA Federal Register notice that solicited public comments
on the information collection prior to this submission. Summarize the public comments
received in response to that notice and describe the actions taken by the agency in response to
those comments. Describe the efforts to consult with persons outside the agency to obtain
their views on the availability of data, frequency of collection, the clarity of instructions and
recordkeeping, disclosure, or reporting format (if any), and on the data elements to be
recorded, disclosed, or reported.

The PRA Federal Register notice requirement is not applicable to this collection because this

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collection falls within the scope of the BIS generic authority entitled, “Request for Investigation
under Section 232 of the Trade Expansion Act,” as approved under OMB Control No. 0694-0120.
This authority is renewed by OMB every three years (last renewed on September 20, 2021) to
support ongoing BIS national security investigation needs.

OTE staff developed the survey in consultation with industry and multiple government experts.
The following is a partial list of those individuals who provided input and advice:

U. S. Government

Brian Gabriel, Deputy Chief Technology Officer, Department of Defense Industrial Policy, (571)
372-8662, brian.m.gabriel.civ@mail.mil
David Pineault, Economist, Defense Logistics Agency – Strategic Stockpile, (571) 767-5498,
david.pineault@dla.mil
Sam Browne, Department of Energy Office of International Market Development, (202) 586-8724,
samuel.browne@hq.doe.gov

Industry

Peter Afiuny, Executive Vice President, Urban Mining Company, (714) 552-5454,
pafiuny@urbanmining.com
Matt Sloustcher, Senior Vice President – Communications, MP Materials, (725) 233-0537,
msloustcher@mpmaterials.com
Josh Hawes, USA Rare Earths, (813) 335-8183, josh.hawes@usare.com
Aaron Williams, Director – Strategic Technologies and Business Development, Arnold Magnetics,
(585) 385-9010 x 2227, awilliams@arnoldmagnetics.com

Academia

Hongyue Jin, Assistant Professor of Systems and Industrial Engineering, University of Arizona,

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(520) 621-7284, hjin@arizona.edu

9. Explain any decisions to provide payments or gifts to respondents, other than
remuneration of contractors or grantees.

This survey will not involve any payment or gifts to respondents.

10. Describe any assurance of confidentiality provided to respondents and the basis for
assurance in statute, regulation, or agency policy.

The survey instrument, cover letter, and fact sheet all provide assurance to the respondents that the
information collected through the survey will be deemed business confidential and will be treated
in accordance with Section 705 of the DPA (50 U.S.C.A. app. Section 2061 et. seq.). This section
prohibits the publication or disclosure of such information unless the President of the United States
determines that its withholding is contrary to the national defense.

The survey will be administered and housed on a secure U.S. Department of Commerce server.
Submitted surveys will not be shared with non-government entities, other than in aggregate form.
The U.S. Department of Commerce will protect the confidentiality of such information pursuant to
the appropriate disclosure exemptions under the Freedom of Information Act (FOIA), should it be
the subject of a FOIA request. OTE has a long and successful track record of protecting business
confidential information collected under the above statute.

11. Provide additional justification for any questions of a sensitive nature, such as sexual
behavior and attitudes, religious beliefs, and other matters that are commonly considered
private.

This survey instrument will not collect information that could be construed as being of a sensitive
nature, such as information concerning sexual behavior and attitudes, religious beliefs, and other
matters that are commonly considered sensitive or private.

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12. Provide an estimate in hours of the burden of the collection of information.

OTE estimates that the total burden on respondents by this survey of importers, distributors, and
producers of NdFeB magnets and NdFeB magnet components will be approximately 600 hours.
This estimate is based on the distribution of similar surveys in both scope and sample size in
previous 232 collections, with an average of 12 hours needed for completion in this instance.

This burden estimate is subject to variations among respondents due to discrepancies in the level of
participation in the sector, record keeping, company size and type, and other variables. The
estimate is based on OTE’s past Section 232 data collections, as well as feedback from industry
participants in information collection. OTE has conducted surveys of various industries and
sectors, including titanium sponge, vanadium, uranium, grain-oriented electrical steel, and others.
The estimated total cost to respondents of this particular information collection is $21,000. This
estimate was calculated by assuming an average hourly respondent work rate of $35 multiplied by
600 total burden hours.

13. Provide an estimate of the total annual cost burden to the respondents or recordkeepers resulting from the collection (excluding the value of the burden hours in Question 12
above).

Not applicable.

14. Provide estimates of annualized cost to the Federal government.

The estimated cost to the Federal Government for the survey is $357,634.8 over the six-month
period. A major portion of this cost is the survey itself, which includes preparation, collection,
inspection, and verification of the responses, compilation of the information and analysis of the
data. Other relevant costs will be incurred in field testing the survey, summarizing the analysis and
findings, preparing the final report, and report printing and distribution.

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The direct employee costs were calculated by multiplying estimated aggregate hours spent on the
project (26 weeks) by the annual pay of one GS-15, Step 10 ($176,300x.5= $88,150); one GS-14,
Step 10 ($164,102x.5=$82,051); one GS-13, Step 10 ($138,868x.5=$69,434); and one GS-12, Step
10 ($116,788x.5=$58,394). The direct employee costs are $298,029 over the six month period.
Indirect or overhead costs associated with the project are calculated as 20 percent of the above
mentioned direct employee costs, or .2x$298,029=$59,605.8 over the 6 month period. A review of
OTE data collection budgets and ledgers from previous years indicates costs for maintenance,
telephone, computers, and space rental charges represent 20 percent of total employee costs.

15. Explain the reasons for any program changes or adjustments.
Because this collection of information falls within BIS’s generic authority entitled, “Request for
Investigation under Section 232 of the Trade Expansion Act,” (OMB Control No. 0694-0120),
there is no increase in burden hours being requested.

This is the first time OTE has used this authority since its renewal on September 20, 2021 (a total
of 12,260 burden hours were authorized). The survey on NdFeB magnets is estimated to take 12
hours per survey with a sample of 50 respondents, meaning 600 hours are needed to conduct the
collection. Therefore, an unused balance of 11,660 hours will remain if this survey is approved
under the aforementioned authority.

16. For collections whose results will be published, outline the plans for tabulation and
publication.

The survey data collected by OTE will be aggregated before publishing to protect company
confidentiality. The instrument will be distributed January 31, 2022. The analysis will begin in
March 2022 and a draft report prepared in April 2022. The final Section 232 report is planned to go
to the President by June 18, 2022. The public version of the report will be available after

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completion of the President’s review and final determination of the report’s findings and
conclusions.

17. If seeking approval to not display the expiration date for OMB approval of the
information collection, explain the reasons why display would be inappropriate.

Not applicable. OTE will display the expiration date of this collection authority on all survey and
instructional instruments the public receives.

18. Explain each exception to the certification statement.

Not applicable.

B. COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL METHODS

Not applicable.

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