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Rare Earth Elements in National Defense

The lessons learned from the pre-slowdown economy will concentrate a global push for fuel efficiency and finding substitutes for hydrocarbon fuel products. This will drive up the demand for specialty metals and super alloys that are closely associated to battery manufacturing. These metals are typically not mined or melted within the United States and the E.U. countries. Therefore, this will likely become a growing strategic concern for the United States as resources will have to be utilized to secure the free flowing access to the limited supply of super alloys and specialty metals products (i.e., chromium, cobalt, lithium, rare earth and platinum group metals). 54

U.S. Department of Energy Report on Critical Mineral Strategy

In December 2010, the U.S. Department of Energy released a report that examined the role of rare earths in renewable energy technologies. While the report did not focus on the use of rare earths for national security and defense purposes, it does shed light on the steps DOD has reportedly undertaken to review the rare earth supply chain, as described in excerpts below.

Recognizing the evolution of the market for rare earth elements (REEs), in the summer of 2009 the Office of Industrial Policy/AT&L, Department of Defense (DOD) self-initiated a review of the U.S. supply chain. The study is based on available forecasts and data from multiple sources and as a result, most of the data are available only at the aggregate level of all REE [Rare earth elements]. The study reviews the U.S. supply chain for both commercial and defense demand of REE. The study also assesses gaps in the supply chain and their potential implications for the Department.

The rationale for this effort included the U.S. dependence on a sole supplier that is not domestic, the importance of REE in certain defense applications and forecasts for a surge in demand for commercial end uses that could strain global supplies. Recent events in the global market for REE have reinforced the Department’s concern regarding reliable and secure supplies of REE. 55

Coordination of the Federal Approach to Rare Earths

Rare earths are used for both commercial and defense purposes, but the majority of domestic use of rare earths is for commercial purposes. There is no unified opinion on whether every rare earth element is considered “critical” or “strategic” for economic or national security purposes, or whether economic security is a national security issue.

Working with the Departments of Commerce and Energy, the White House Office of Science and Technology Policy (OSTP) began gathering experts to hold interagency group discussions on rare earth elements from 2007 to 2008. Initially, an interagency working group (an ad hoc working group) was the result of a roundtable discussion on rare earths organized by the Department of Commerce. This group of subject-matter experts from various federal agencies discussed the potential usefulness of the White House taking a lead role on rare earth strategy. 56

54 U.S. Department of Defense, Office of the Under Secretary of Defense for Acquisition, Technology and Logistics. Annual Industrial Capabilities Report to Congress, May 2010, p. 19, http://www.acq.osd.mil/ip/docs/ annual_ind_cap_rpt_to_congress_2010.pdf.

55 U.S. Department of Energy, Report on Critical Materials Strategy, December 2010, pp. 58-59, http://www.energy.gov/news/documents/criticalmaterialsstrategy.pdf.

56 U.S. Congress. House Committee on Science and Technology, Subcommittee on Investigations and Oversight, (continued...)

Congressional Research Service


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