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Rare earth metals, a variety of elements that are difficult and costly to extract, are vital for technology and the military. Tiny amounts of the metals and alloys are used in a plethora of everyday devices, like cell phones, computer memory, and fluorescent lighting. But they are also vital components in many weapon systems, laser devices and telescopes.

The United States used to be the top producer in the rare earth industry, but it is now almost entirely dependent on Chinese exports, which have been increasingly reduced.

Last July, China announced that it would reduce rare earth exports by 72 percent, and during a maritime dispute with Japan, temporarily cut all rare earth exports to its neighbor. In addition, China’s growing domestic demand for rare earth minerals, which could outpace the country’s production between 2012 and 2014, potentially cutting into exports.

“Lawmakers are not just concerned about relying on China, or that China is cutting back access, but the fact that the United States has lost its domestic capacity to produce strategic and critical materials and that the manufacturing supply chain for rare earths has largely migrated to outside the United States,” a report by the Congressional Research Service said.

Congress has requested an assessment by the Pentagon to analyze supply chain issues and vulnerabilities of rare earth metals, necessary for many DOD weapon and technology systems. The report is long overdue and the Pentagon has not indicated if or when it plans on releasing it, CRS said. Congressional action largely hinges on these findings.

Policymakers are concerned about the U.S. dependence on China for the material, which could have serious implications for national security efforts and the technology industry.

“Clearly, rare earth supply limitations present a serious vulnerability to our national security. Yet early indications are the DOD has dismissed the severity of the situation to date,” said a January letter signed by Sens. Mark Begich (D-Alaska) and Lisa Murkowski (R-Alaska) as well as Rep. Mike Coffman (R-Colo).

The United States has only one rare earth mine production facility, Molycorp, which is restarting production in Mountain Pass, Calif. The facility will open in 2012, and at full capacity, the mine will be able to mine and separate rare earth elements, but not be immediately able to refine rare earth oxides into metals. Last year, the Government Accountability Office reported that rebuilding the U.S. rare earth supply chain could take up to 15 years, and is dependent on acquiring patents currently held by international companies.

FAST FACT: China, which produces 97 percent of rare earth oxides, is the only exporter of refined earth metals and is the top producer of the two strongest magnets, samarium cobalt and neodymium iron boron. The United States currently produces approximately 3 percent of rare earth oxides.

Following are other new watchdog reports released by the Government Accountability Office (GAO), various federal Offices of Inspector General (OIG), and other government entities.


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