Rare Earth Exchanges

In 2013 a Congressional Report was to Jolt the U.S. Ruling Establishment into Rare Earth Action – Not Much Happened. Where is the Accountability?

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Highlights

  • The U.S. is critically dependent on China for rare earth elements.
  • By 2010, China controlled 90-95% of global rare earth elements production.
  • The Department of Defense identified seven rare earth elements as crucial for military equipment, highlighting significant supply chain risks.
  • Despite legislative efforts since 2013, the U.S. has made limited progress in developing a resilient domestic rare earth elements production strategy.

The Congressional Research Service’s 2013 report, “Rare Earth Elements in National Defense: Background, Oversight Issues, and Options for Congress (opens in a new tab)” by Valerie Bailey Grasso highlighted significant concerns regarding U.S. dependence on China for rare earth elements (REEs), which are critical for defense weapon systems and other technologies. The report noted that while rare earths are not inherently rare, their low concentrations and complex extraction and processing make them costly. Historically, the U.S. led global REE production but ceded dominance to China due to cheaper labor, lower environmental regulations, and aggressive market strategies. By 2010, China controlled about 90-95% of REE production and export, which raised alarms about supply chain vulnerabilities, particularly after China restricted REE exports.

Congress mandated the Department of Defense (DoD) to assess the national security implications of REE reliance and devise strategies to mitigate supply chain risks. The DoD’s findings revealed that seven REEs were critical to military equipment and susceptible to supply disruptions. Recommendations included diversifying supply chains, increasing domestic production, stockpiling key materials, and exploring substitutes. However, efforts to rebuild U.S. REE capabilities, such as Molycorp’s vertical integration initiative, faced challenges, including financial hurdles, environmental concerns, and dependence on Chinese processing facilities.

Despite legislative efforts, such as the National Strategic and Critical Minerals Production Act and other proposed bills, progress has been slow. The report emphasized the need for a unified federal approach, increased research funding, and partnerships with allies to reduce dependency on Chinese REEs. However, little has changed since 2013, leaving critical gaps in the U.S. REE supply chain.

Key Questions:

  1. What are the current supply chain vulnerabilities for REEs in the U.S., and how have they evolved since the 2013 report?
  2. Has the U.S. made any significant progress in domestic REE production or diversification of supply sources?  The answer appears to be little movement.
  3. What initiatives or partnerships have been developed to counteract China’s dominance in the REE market? We know over the last couple of years, some efforts, but some, such as the Minerals Security Partnership, according to some experts, will do little. 
  4. Are there effective substitutes for REEs in defense and technology applications, and what advancements have been made in this area? It is an area of R&D interest, but according to our growing network of experts, nothing is palpable in the short run.
  5. Why has there been limited follow-through on the recommendations from the 2013 report, and what barriers exist to implementing a robust national strategy? Don’t our leaders understand the magnitude of the problem?

Addressing these questions is critical as REEs remain essential for national security and technological advancement, underscoring the urgency of developing a resilient U.S. REE supply chain.

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