Rare Earth Elements in National Defense
How and Where Are Rare Earths Produced?22
In April 2010, GAO reported on the world’s production of rare earths and stated that China produced
97% of rare earth ore,
97% of rare earth oxides,
89% of rare earth alloys,
75% of neodymium iron boron magnets (NeFeB), and
60% of samarium cobalt magnets (SmCo).
The rare earth production process is complex and expensive. The stages of production consist of mining, separating, refining, alloying, and manufacturing rare earths into end-use items and components, as described in the GAO report. 23
The first stage is the actual mining, where the ore is taken out of the ground from the mineral deposits.
The second stage is separating the ore into individual rare earth oxides.24
The third stage is refining the rare earth oxides into metals with different purity levels; oxides can be dried, stored, and shipped for further processing into metals.
The fourth stage is forming the metals, which can be processed into rare earth alloys.
The fifth stage is manufacturing the alloys into devices and components, such as permanent magnets.
From the 1960s to the 1980s, the United States was the leader in global production of rare earths and in the research and development of high-performance magnets.25 Since that time, as discussed above, production has shifted primarily to China, due to lower labor costs and lower environmental standards. China is the only exporter of commercial quantities of rare earth metals. 26
Today, the United States almost entirely lacks the refining, fabricating, metal-making, alloying, and magnet manufacturing capacity to process rare earths. While the United States lacks domestic facilities that produce sintered NdFeB magnets, Molycorp does produce NeFeB and SmCo alloys which are used in permanent magnets. 27
22 For a more detailed discussion of rare earth supply chain issues, economics, and global supply of rare earths, see CRS Report R41347, Rare Earth Elements: The Global Supply Chain, by Marc Humphries.
23 U.S. Government Accountability Office (GAO). Rare Earth Materials in the Defense Supply Chain, GAO-10-617R, April 14, 2010, p. 19, http://www.gao.gov/new.items/d10617r.pdf.
24 The second stage creates a rare earth concentrate that is then separated through a flotation separation process into oxide. This process is referred to as beneficiation.
Cindy Hurst, “China’s Ace in the Hole: Rare Earth Elements,” Joint Forces Quarterly, Issue 59, 4th Quarter, 2010, http://www.ndu.edu/press/lib/images/jfq-59/JFQ59_121-126_Hurst.pdf. 25
Japan produces some rare earth metal for the production of alloys and magnets for its own use.
27 Molycorp official Andy Davis, Manager of Public Affairs, stated in May 2012 that “there has been a substantial (continued...)
Congressional Research Service