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Rare Earth Elements in National Defense

some rare earth elements have moved into a position where they are now more critical to national security.

Congress might demand the 2010 statutorily required meeting of the board to commence immediately. The next SMPB will be required to use the new definition of “materials critical to national security” as defined in Section 829 of the FY2011 NDAA, which states the following:

Sec. 829. Definition of Materials Critical To National Security

(1) The term “materials critical to national security” means materials (A) upon which the production or sustainment of military equipment is dependent; and (B) the supply of which could be restricted by actions or events outside the control of the Government of the United States. 60

In the short run, however, creating a stockpile could raise prices even further because of the increased demand.

Require Stockpiling of Specific Materials

Congress could require a strategic rare earth elements stockpile. Stockpiles might possibly increase the security of the domestic U.S. supply for rare earths. Congress may consider compiling a “virtual” stockpile database, with commitments and contracts with suppliers to buy the items when needed. One trade association, USMMA, advocates for a limited strategic reserve of rare earth alloys, metals, and magnets. USMMA asserts that government action is needed to ensure that there is a downstream domestic manufacturing capability.

This strategic stockpile would ensure our Department of Defense has ready access to those materials needed to ensure our national security and to incentivize the return of domestic manufacturing. With defense critical materials such as dysprosium being sourced solely from China, it is critical that the Department of Defense have access to rare earth oxides from reliable producers and manufacturers in the United States and ally nations to perform value added processes, such as metal, alloy and magnet manufacturing. 61

Fund the Downstream Supply Capacity

Once DOD and its suppliers identify whether and where material shortfalls exist, Congress could determine which stages of the supply chain (e.g., mining or manufacturing) require federal funding.

Fund Rare Earth Research

With the growing strategic importance of rare earths, and in order to create interest and build additional U.S. leadership in rare earth research and development, Congress may consider funding rare earth application sciences in curriculums for military and other government institutes

60

P.L. 111-383, Section 829.

61 “USMMA Calls For A Rare Earth Strategic Reserve,” Businesswire, February 23, 2011, http://www.businesswire.com/news/home/20110223006331/en/USMMA-Calls-Rare-Earth-Strategic-Reserve.

Congressional Research Service

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