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Rare Earth Elements in National Defense

In April 2010 Congress required the Government Accountability Office (GAO) to examine rare earths in the defense supply chain and also required the Secretary of Defense to assess the defense supply chain and develop a plan to address any shortfalls or other supply chain vulnerabilities, including a specific requirement to present a plan for the restoration of domestic NeFeB magnet production. GAO concluded that revamping the defense supply chain could take 15 years or more. Congress has required that the Secretary of Defense, pursuant to the Ike Skelton National Defense Authorization Act for FY2011 (P.L. 111-383), conduct an assessment of the rare earths supply chain issues and develop a plan to address any supply chain vulnerabilities. DOD‘s report was released in March 2012.

Congress may want answers to at least four important questions on rare earth elements: (1) Are rare earth elements essential to U.S. national security? (2) How would a scarcity of rare earths affect the delivery or performance of defense weapon systems? (3) Is the United States vulnerable to supply disruptions, and if so, are there readily available and equally effective substitutes? (4) What are the short-term and long-term options that DOD may consider in response to a lack of domestic rare earth element production and China’s continued dominance?

Major New Developments

  • H.

    R. 1960, National Defense Authorization Act (NDAA) for FY2014

  • H.

    R. 1960 was introduced in the House on May 14, passed the House in a recorded vote (315-

    • 108)

      on June 14, and was referred to the Senate on July 8, 2013. The bill contains several

provisions which would, if enacted into law, give the President more authority to conserve strategic and critical materials, as well as direct the Secretary of Defense to report on plans to assess the supply chain diversification for rare earth substitutes and develop risk mitigation strategies. The provisions appear below.

Subtitle B—National Defense Stockpile

Section 1411. Use of National Defense Stockpile for the Conservation of a Strategic and Critical Materials Supply

Section 1411 would modify the President’s authority to maintain and manage a national defense stockpile, and allow the Defense Logistics Agency to more proactively engage in the market. These changes would grant the President the authority to conserve strategic and critical materials.

(a) Presidential Responsibility for Conservation of Stockpile Materials - Section 98e(a) of Title 50, United States Code, is amended:

  • (1)

    by redesignating paragraphs (5) and (6) as paragraphs (6) and (7), respectively; and

  • (2)

    by inserting after paragraph (4) the following new paragraph (5):

“(5) provide for the recovery of any strategic and critical material from excess materials made available for recovery purposes by other Federal agencies;”

Congressional Research Service


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