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Rare Earth Elements in National Defense

that are in danger of supply interruption to ensure security of supply of both metals and magnets. 52

Government Reports on Rare Earths

GAO Report on the Rare Earth Supply Chain

In response to congressionally directed requirements in Section 843 of the National Defense Authorization Act of 2010 (P.L. 111-84), GAO was asked to examine the defense rare earth supply chain issues. An April 2010 GAO report noted the lack of U.S. presence in the global supply chain at each of the five stages of rare earth production—mining, separating, refining (oxides into metal), fabricating (of alloys), and manufacturing (of magnets and other components). GAO concluded that the United States lacks a domestic rare earth supply chain and offered the following assessment of the current defense rare earth supply:

While rare earth ore deposits are geographically diverse, current capabilities to process rare earth metals into finished materials are limited mostly to Chinese sources.

The United States previously performed all stages of the rare earth material supply chain, but now most rare earth materials’ processing is performed in China, giving it a dominant position that could affect worldwide supply and prices.

Based on industry estimates, rebuilding a U.S. rare earth supply chain may take up to 15 years and is dependent on several factors, including securing capital investments in processing infrastructure, developing new technologies, and acquiring patents, which are currently held by international companies.

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GAO was unable to determine whether DOD faces any supply chain vulnerability issues or the degree to which national security interests are potentially threatened by the current rare earth situation. Its assessment was limited, primarily because DOD stated that it was in the process of performing its own internal assessment and had not yet identified national security risks or taken steps to address any potential material shortages.

Annual Industrial Capabilities Report to Congress

Section 2504 of Title 10, United States Code, requires that the Secretary of Defense submit an annual report on industrial capabilities to the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives. The 2009 report did not address the rare earth supply, but it did suggest that the issue warranted further study, as described in excerpts from the report.

52 U.S. Congress. Letter to Secretary of Defense Robert M. Gates, from Senator Mark Bewitch, Senator Lisa Murkowski, and Representative Mike Coffman, January 28, 2011; http://www.politico.com/static/ PPM110_110131_rare_earth.html.

53 U.S. Government Accountability Office. Rare Earth Materials in the Defense Supply Chain, GAO-10-617R, April 14, 2010, at http://www.gao.gov/new.items/d10617r.pdf.

Congressional Research Service

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