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Rare Earth Elements in National Defense

with foreign allies that could potentially offer a diversified source of foreign suppliers outside of China, and providing more financial assistance for rare earth production within the United States. Each of these potential options is discussed below.

Congressional insight on these potential actions will largely depend on the findings and conclusions reached in DOD’s long-overdue self-assessment on the defense rare earth supply chain. However, it is not clear if or when DOD will release its report.

Hearings on the DOD Report on the Assessment of the Rare Earth Materials Supply Chain

Congress could require DOD to release the report, and then hold hearings to examine DOD’s assessment and conclusions. The report was required to be released within 180 days of the enactment of the act, which would have been on or about July 7, 2011. The reasons for the delay are uncertain.

Convene Defense Suppliers to Discuss Supply Chain Issues

Congress could meet with defense suppliers, at all tiers of the supply chain, to ascertain their knowledge of material shortages and bottlenecks. While DOD purchases the end product (the weapons system) from prime contractors and relies on prime contractors to deliver the finished product, rare earth elements are important throughout the supply chain from the prime contractor through successive subcontractor tiers. Some contractors at lower ends of the tiers may be reluctant to signal to DOD that there are supply chain issues or challenges.

An issue that warrants further understanding is where there is convergence between the rare earth value supply chain and the defense supply chain. The rare earth supply chain starts with mining, flows from ore to concentrate, to oxide, to metal, to alloy, and then to the finished product, the magnet. In contrast, the defense supply chain starts with the prime contractor and moves through a successive number of subcontractors down to the ultimate “first line processor” who purchases a rare earth, value-added product such as metal, alloy, or permanent magnets for incorporation into a defense component.

Convene the Strategic Materials Protection Board

Congress could require DOD to convene the Strategic Materials Protection Board (SMPB). In its December 2008 report, as discussed above, the SMPB defined critical materials in this way: “the criticality of a material is a function of its importance in DOD applications, the extent to which DOD actions are required to shape and sustain the market, and the impact and likelihood of supply disruption.”59 As a result, the SMPB defined only one rare earth element, beryllium, as a “strategic material critical to national security.” Congress may convene the board because the present board might determine that some rare earth elements have moved into a position where they are now more critical to national security purposes. The next SMPB might determine that

59 U.S. Department of Defense. Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics, Report of the Strategic Materials Protection Board, December 12, 2008.

Congressional Research Service

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