Welcome to Golden, Colorado. I want to thank our hosts, the Colorado School of Mines and School of Mines President Paul Johnson for their amazing hospitality. In addition, I want to thank our Metals Subcommittee Chair, Professor Ian Lange, who made this meeting of the Energy and Environmental Markets Advisory Committee possible.

Before we get started, I also want to recognize our #1 Kansas City Chiefs fan and EEMAC Secretary Lauren Fulks who once again went above and beyond the call of duty in both hosting a Super Bowl party on Sunday and flying to Colorado early Monday morning. I would also like to thank our Assistant Secretaries, Lillian Cardona and JonMarc Buffa as well as our Physical Energy Infrastructure Subcommittee Chair, Professor Timothy Fitzgerald, and our EEMAC Chair, Dena Wiggins.

Today, in addition to a progress report from our subcommittees, we will hear from two panels. First, we will have a discussion on the development of rare earth metals and minerals. Then, a panel on the proposed implementation of Basel III. This is a topic we have not discussed before in EEMAC, but one which will certainly have an impact on derivatives markets and commercial end-users that use those markets to manage risk.

Thank you all again for taking time away from your work, families and maybe even not being able to watch the Super Bowl to be here today. I am very grateful for all your hard work.

As we focus on the development of rare earth metals and minerals, I can think of no better place to discuss the development of rare earth markets than Golden, Colorado.

In addition to the cutting edge work of the Colorado School of Mines, what makes Golden a fitting place for an EEMAC meeting is its history as a meeting point between commodity buyers and sellers.

Surprisingly, when the Colorado Gold Rush began in 1859, little gold was discovered in Golden.[1] Rather, the town is named for its co-founder Thomas L. Golden, who had the foresight to realize that miners would need a location to sell their ore as well as to purchase supplies.[2]

What made Golden so attractive was its terrain and location. It was referred to as “the last flat place”, meaning that it was the last significant amount of flat land before the Rocky Mountains.[3] That flat land allowed gold miners to transport gold ore from nearby Clear Creek and the mountains west of Golden in towns like Breckenridge and South Park, to Golden where it could be smelted and turned into processed gold bars and shipped east.[4]

As the gold rush grew, the town also became a commercial and agricultural center where miners could stock up on food, equipment, and the occasional refreshing beverage they needed before venturing into the mountains to prospect.[5]

Golden’s development is an example of the rapid creation of a local commodity spot market. In Colorado, gold was first found in Clear Creek on January 7^th, 1859,[6] and Golden was founded just five months later on June 16^th, 1859.[7] In towns like Golden, sellers found buyers, creating commodity liquidity, transparency, and price discovery. But, before long, centralized derivatives markets in cities like New York and Chicago began to perform the liquidity, transparency, and price discovery functions of local spot markets like Golden, Colorado.

For example, for gold, it took just thirteen years after the California Gold Rush of 1849[8] and three years after gold was discovered in Colorado for gold derivatives to be traded on the New York Stock Exchange and later the Gold Exchange in early 1862.[9]

From this, we can conclude that the iron, or perhaps we should say—golden—rule of commodity derivatives market creation is that when critical commodities are found in abundance, spot commodity markets develop quickly and derivatives markets may, if the conditions are right, follow thereafter.

This brings me to our discussion of rare earth metals and minerals.

As commodity derivatives regulators, we must always be prepared for new commodity derivatives markets, particularly ones which will significantly impact our economy.

Today, we are in the midst of a “gold rush” for rare earths. The spirit of 1859 remains in Golden, except that cutting edge science has taken the place of the sluice and the pickaxe.

As rare earth exploration efforts increase, spot markets develop, and derivative markets can be expected to follow.

Today, I look forward to learning more about the development of rare earth exploration and the spot market for rare earths as EEMAC considers how the CFTC should prepare for the almost certain development of rare earth derivatives markets.

Finally, I wanted to take a moment to remember a former associate member of EEMAC and a CFTC alum, Mike Gill. Mike was a wonderful colleague to those who were fortunate to overlap with his time at the agency, combining keen insights on public policy with an open and welcoming demeanor. His dedication to public service was surpassed only by his dedication to his family. We will all truly miss him.

As we have several EEMAC members who knew Mike, I wanted to take this opportunity to have those members say a few words in remembrance. Tyson, would you like to start us off?