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Rare Earth Elements in National Defense

Secretary of Defense, and Congress with information, analysis, and advice on strategic materials which are critical to the operations of the Department of Defense.

It should be noted that Congress has addressed this issue in the P.L. 111-383, FY2011 National Defense Authorization Act (H.R. 6523), where strategic materials are defined as “material essential for military equipment, unique in the function it performs, and for which there are no viable alternatives.”

Policy Issues for Congress

Dependence on Foreign Sources for Rare Earth Materials

Some Members of Congress have expressed concern with the nearly total U.S. dependence on foreign sources for rare earth elements. Some have raised questions about China’s near dominance of the rare earth industry and the implications for U.S. national security. Yet the “crisis” for many policymakers is not the fact that China has cut its rare earth exports and appears to be restricting the world’s access to rare earths, 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. Still others are concerned about the impact of a potential supply chain vulnerability of materials critical for defense systems. Additionally, some Members of Congress have questioned the lack of knowledge of what specific materials are needed for defense purposes, which materials are strategic and critical to national security, and what steps might be taken to increase the domestic capability to produce these materials.

In January 2011, three Members of Congress wrote a letter to Secretary of Defense Robert M. Gates outlining their concerns over what they perceived as a lack of action on DOD’s part to ensure that adequate supplies of rare earths were available. They pressed for DOD to take immediate action, as described in excerpts below.

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. Based on initial discussions with the DOD Office of Industrial Policy, we understand the effort to precisely ascertain and fully comprehend DOD consumption of certain rare earth elements is still an ongoing effort. In our view, it is a fundamental responsibility of DOD Industrial Policy to have a comprehensive understanding of the security of our defense supply chain, which requires understanding detailed knowledge of the sources and types of components and materials found in our weapon systems.

As the ultimate customer, the Department has the right and responsibility to require their contractors to provide a detailed accounting of the various rare earth containing components within their weapon systems. This information should then be aggregated into an element by element overall demand for DOD. With that knowledge, DOD could compare expected supply and demand of each rare earth element with overall consumption by the Department to identify critical vulnerabilities in our supply chain. This will enable the Department to establish policies to ensure the defense supply chain has access to those materials. For example, one policy may be for the DOD to establish a limited stockpile of rare earth alloys

Congressional Research Service


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