Rare Earth Elements in National Defense:
Background, Oversight Issues, and Options
for Congress

Valerie Bailey Grasso
Specialist in Defense Acquisition
June 8, 2011
Congressional Research Service
7-5700
www.crs.gov
R41744
CRS Report for Congress
P
repared for Members and Committees of Congress

Rare Earth Elements in National Defense

Summary
Some Members of Congress have expressed concern over U.S. acquisition of rare earth elements
used in various components of defense weapon systems. Rare earths consist of 17 elements on the
periodic table, including 15 elements beginning with atomic number 57 (lanthanum) and
extending through number 71 (lutetium), as well as two other elements having similar properties
(yttrium and scandium). These are referred to as “rare” because although relatively abundant in
total quantity, they appear in low concentrations in the earth’s crust and extraction and processing
is both difficult and costly.
From the 1960s to the 1980s, the United States was the leader in global rare earth production.
Since then, production has shifted almost entirely to China, in part due to lower labor costs and
lower environmental standards. China now produces about 97% of rare earth oxides, is the only
exporter of commercial quantities of rare earth refined metals, and is the majority producer of the
world’s two strongest magnets (samarium cobalt (SmCo) and neodymium iron boron (NeFeB)
permanent rare earth magnets). However, Molycorp, Inc., a U.S. company with mining operations
in Mountain Pass, CA, recently announced that it will restart mining in 2012 and has secured the
final permits needed to build a rare earth manufacturing facility, now scheduled to open in 2012.
Molycorp produces rare earth oxides and recently announced a cooperative research and
development agreement with the U.S. Department of Energy’s Ames Laboratory. The Molycorp-
Ames effort will focus on developing new methods to create commercial-grade, rare earth
permanent magnets.
Recently, a series of events and press reports have highlighted what some refer to as the rare earth
“crisis.” Policymakers are concerned with the nearly total U.S. dependence on China for rare
earth elements, including oxides, phosphors, metals, alloys, and magnets, and its implications for
U.S. national security. The rare earth element supply chain cuts across the manufacturing,
defense, and science and technology sectors of the global economy. Because some Members of
Congress see a reliable domestic supply chain as critical to maintaining existing and acquiring
new defense weapons systems, they support development of a domestic source for rare earth
elements. Other policymakers see alternative rare earth sources (outside of China) as a way to
mitigate the lack of domestic mining and manufacturing.
The “crisis” for many policymakers is not that China has cut its rare earth exports and appears to
be restricting the world’s access to rare earths, but that the United States has lost its domestic
capacity to produce strategic and critical materials. The Department of Defense (DOD) is
examining whether there is a supply chain vulnerability issue. No one knows what percentage of
rare earths are used for DOD purposes; it has been estimated that DOD uses less than 10% of
domestic rare earth consumption. However, no firm estimates are currently available. Congress
has mandated 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 earth supply
chain issues and develop a plan to address any vulnerabilities.
Congress may use its oversight role to seek more complete answers to the following important
questions:
• Is there a rare earth material vulnerability that will affect national security?
• Does dependence on foreign sources alone for rare earths pose a national security
problem?
Congressional Research Service

Rare Earth Elements in National Defense

• What are the factors to consider when determining the extent to which import
dependence for rare earths may pose a threat to economic or national security?
• Are there substitutes for rare earths that are economic, efficient, and available?
• What short- and long-term options might DOD consider in response to a lack of
domestic production and China’s continued dominance in this area?
In addition to requiring DOD to assess rare earth supply chain vulnerability, Congress may want
to consider alternatives including
• development of a domestic rare earths stockpile;
• government investment in rare earths production, including aspects of the supply
chain; and
• partnering with foreign allies to diversify rare earth sources and decrease
dependence on China.
Congress may encourage DOD to develop a collaborative, long-term, well-thought-out strategy
designed to identify any material weaknesses and vulnerabilities associated with rare earths and
to protect long-term U.S. national security interests.

Congressional Research Service

Rare Earth Elements in National Defense

Contents
Introduction ................................................................................................................................ 1
Background on Rare Earth Elements ........................................................................................... 2
What Are Rare Earth Elements? ............................................................................................ 2
How Are Rare Earths Used in Defense Applications? ............................................................ 2
How and Where Are Rare Earths Produced?.......................................................................... 7
Are Rare Earths Critical Materials for U.S. Defense? ............................................................ 8
Policy Issues for Congress ........................................................................................................ 10
Lack of Domestic Production Capacity in Rare Earths......................................................... 11
Possible Foreign Supply Chain Disruptions ......................................................................... 11
GAO Report on the Rare Earth Supply Chain ................................................................ 12
Annual Industrial Capabilities Report to Congress......................................................... 12
U.S. Department of Energy Report on Critical Mineral Strategy .................................... 13
Coordination of the Federal Approach to Rare Earths .......................................................... 13
Absence of the Study of Rare Earth Application Sciences in U.S. Colleges and
Universities...................................................................................................................... 14
Options for Congress ................................................................................................................ 15
Require DOD to Immediately Release the Rare Earths Report and Conduct Hearings
on the Report ................................................................................................................... 15
Convene Defense Suppliers to Discuss Supply Chain Issues................................................ 15
Convene the Strategic Materials Protection Board ............................................................... 16
Require Stockpiling of Specific Materials............................................................................ 16
Fund the Downstream Supply Capacity............................................................................... 17
Fund Rare Earth Research ................................................................................................... 17
Institute a New Critical Minerals Program........................................................................... 17
Develop Partnerships with Allies to Diversify the Supply Source ........................................ 18
S. 1113, The Critical Minerals Policy Act of 2011 ......................................................... 20

Figures
Figure 1. Rare Earth Elements in Guidance and Control Systems................................................. 4
Figure 2. Rare Earth Elements in Defense Electronic Warfare...................................................... 4
Figure 3. Rare Earth Elements in Targeting and Weapon Systems ................................................ 5
Figure 4. Rare Earth Elements in Electric Motors ........................................................................ 6
Figure 5. Rare Earth Elements and Communication..................................................................... 6

Appendixes
Appendix. Legislative Activity .................................................................................................. 19

Congressional Research Service

Rare Earth Elements in National Defense

Contacts
Author Contact Information ...................................................................................................... 23
Congressional Research Service

Rare Earth Elements in National Defense

Introduction
This report discusses rare earth elements used in Department of Defense (DOD) weapon systems,
current problematic oversight issues, and options for Congress to address these issues. Rare earth
elements (also referred to by the shorthand term “rare earths”) include the lanthanide series of 15
elements on the periodic table, beginning with atomic number 57 (lanthanum) and extending
through element number 71 (lutetium), as well as yttrium and scandium. These 17 elements are
referred to as “rare” because while they are relatively abundant in quantity, they appear in low
concentrations in the earth’s crust and economic extraction and processing is both difficult and
costly.
The United States is a major consumer of products containing rare earth elements. They are
incorporated into many sophisticated technologies with both commercial and defense
applications. From the 1960s to the 1980s, the United States was the leader in global production
of rare earths. Since that time, processing and manufacturing of the world’s supply of rare earths
and downstream value-added forms such as metals, alloys, and magnets have shifted almost
entirely to China, in part due to lower labor costs and lower environmental standards. Today, the
United States lacks rare earth mine production, and almost entirely lacks the refining, fabricating,
and alloying capacity to process rare earths. However, Molycorp, Inc., a U.S. company with
mining operations in Mountain Pass, CA, recently announced that it will restart mining in 2012
and has secured the final permits needed to construct a rare earth manufacturing facility, which is
scheduled to open in 2012. Molycorp has continued to process the above-ground stocks.
Molycorp produces rare earth oxides and recently announced a cooperative research and
development agreement with the U.S. Department of Energy’s Ames Laboratory. The Molycorp-
Ames effort will focus on developing new methods to create commercial-grade, rare earth
permanent magnets.
A series of events and ensuing press reports have highlighted the rare earth “crisis,” as some refer
to it. In July 2010, the China Ministry of Commerce announced that China would cut its exports
of rare earth minerals by 72%. In September 2010, China temporarily cut rare earth exports to
Japan apparently over a maritime dispute. This dispute highlighted the potential for disruption of
the world’s supply of rare earth minerals. For 2011, it appears that China has cut exports further
and raised export tariffs for rare earths. Other countries are trying to figure out how to react to
these developments and how to protect their long-term interests in rare earths.
Some Members of Congress are concerned with the potential for a nearly total U.S. dependence
on foreign sources for rare earth elements and the implications of this dependence for national
security. Congress has been interested in the rare earth issue largely because
• the world is almost wholly dependent on a single national supplier—China—for
rare earths;
• the United States currently produces approximately 3% of its light rare earth
oxides;
• the United States has no production of heavy rare earths (terbium to lutetium and
yttrium);
• the United States has virtually no production of rare earth metals, powders,
alloys, and NeFeB magnets;
Congressional Research Service
1

Rare Earth Elements in National Defense

• there may be repercussions if these materials are not available for commercial
and defense applications; and
• the rare earths supply chain vulnerability question may adversely affect the
ability of the United States to plan strategically for its national security needs.
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. In an April 2010 report, 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.
Congress may want answers to at least four important questions with regard to 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
in this area?
Background on Rare Earth Elements
What Are Rare Earth Elements?
According to the U.S. Geological Survey (USGS),1 there are 17 rare earth elements on the
periodic table. The first 15 elements begin with atomic number 57 (lanthanum) and extend
through element number 71 (lutetium), and there are two other elements, yttrium and scandium,
which have similar properties. Rare earths are not particularly rare but are found in low
concentrations in the earth’s crust. The economics of locating and retrieving them are
challenging. Rare earths are divided into two groups: light rare earths (lanthanum, cerium,
praseodymium, neodymium, promethium, samarium) and heavy rare earths (europium,
gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium, scandium, and
yttrium).
How Are Rare Earths Used in Defense Applications?
No one knows what percentage of rare earths are used for Department of Defense purposes. It has
been estimated that DOD uses less than 10% of domestic consumption for rare earths. However,
no firm estimates are available at this time.2 Rare earth elements are found in two types of

1 USGS Fact Sheet 087-02, and USGS Mineral Commodity Summaries, January 2010, http://pubs.usgs.gov/fs/2002/
fs087-02/.
2 Gopal Ratnam, “Pentagon is ‘Myopic’ over China’s Rare Earths Monopoly, U.S. Lawmaker Says” Bloomberg,
November 1, 2010, http://www.bloomberg.com/news/2010-11-01/pentagon-is-myopic-over-china-s-rare-earths-
(continued...)
Congressional Research Service
2

Rare Earth Elements in National Defense

commercially available, permanent magnet materials. They are samarium cobalt (SmCo), and
neodymium iron boron (NdFeB). NdFeB magnets are considered the world’s strongest permanent
magnets and are essential to many military weapons systems. SmCo retains its magnetic strength
at elevated temperatures and is ideal for military technologies such as precision-guided missiles,
smart bombs, and aircraft. The superior strength of NdFeB allows for the use of smaller and
lighter magnets in defense weapon systems.
The following illustrations (Figures 1-5) show the use of rare earth elements in a variety of
defense-related applications:
• fin actuators in missile guidance and control systems, controlling the direction of
the missile;
• disk drive motors installed in aircraft, tanks, missile systems, and command and
control centers;
• lasers for enemy mine detection, interrogators, underwater mines, and
countermeasures;
• satellite communications, radar, and sonar on submarines and surface ships; and
• optical equipment and speakers.


(...continued)
monopoly-u-s-lawmaker-says.html.
Congressional Research Service
3



Rare Earth Elements in National Defense

Figure 1. Rare Earth Elements in Guidance and Control Systems

Source: Compiled from presentations by the Rare Earth Industry and Technology Association, the United States
Magnet Manufacturing Association, and David Pineault, “Global Rare Earth Element Review,” Defense National
Stockpile Center, spring 2010.
Figure 2. Rare Earth Elements in Defense Electronic Warfare

Source: Compiled from presentations by the Rare Earth Industry and Technology Association, the United States
Magnet Manufacturing Association, and David Pineault, “Global Rare Earth Element Review,” Defense National
Stockpile Center, spring 2010.
Congressional Research Service
4


Rare Earth Elements in National Defense

Figure 3. Rare Earth Elements in Targeting and Weapon Systems

Source: Compiled from presentations by the Rare Earth Industry and Technology Association, the United States
Magnet Manufacturing Association, and David Pineault, “Global Rare Earth Element Review,” Defense National
Stockpile Center, spring 2010.
Congressional Research Service
5



Rare Earth Elements in National Defense

Figure 4. Rare Earth Elements in Electric Motors

Source: Compiled from presentations by the Rare Earth Industry and Technology Association, the United States
Magnet Manufacturing Association, and David Pineault, “Global Rare Earth Element Review,” Defense National
Stockpile Center, spring 2010.
Figure 5. Rare Earth Elements and Communication

Source: Compiled from presentations by the Rare Earth Industry and Technology Association, the United States
Magnet Manufacturing Association, and David Pineault, “Global Rare Earth Element Review,” Defense National
Stockpile Center, spring 2010.
Congressional Research Service
6

Rare Earth Elements in National Defense

How and Where Are Rare Earths Produced?3
In April 2010, GAO reported on the world’s production of rare earths and stated that China
produced
• 97% of rare earth ore;
• 97% of rare earth oxides;
• 89% of rare earth alloys;
• 75% of neodymium iron boron magnets (NeFeB); and
• 60% of samarium cobalt magnets (SmCo).
The rare earth production process is complex and expensive. The stages of production consist of
mining, separating, refining, alloying, and manufacturing rare earths into end-use items and
components, as described in the GAO report.4
• The first stage is the actual mining where the ore is taken out of the ground from
the mineral deposits.
• The second stage is separating the ore into individual rare earth oxides.5
• The third stage is refining the rare earth oxides into metals with different purity
levels; oxides can be dried, stored, and shipped for further processing into metals.
• The fourth stage is forming the metals, which can be processed into rare earth
alloys.
• The fifth stage is manufacturing the alloys into devices and components, such as
permanent magnets.
From the 1960s to the 1980s, the United States was the leader in global production of rare earths
and in the research and development of high-performance magnets.6 Since that time, as discussed
above, production has shifted primarily to China, due to lower labor costs and lower
environmental standards. China is the only exporter of commercial quantities of rare earth
metals.7
Today, the United States almost entirely lacks the refining, fabricating, metal-making, alloying,
and magnet manufacturing capacity to process rare earths. One U.S. company, Electron Energy
Corporation (EEC) in Landisville, PA, produces SmCo permanent magnets. EEC, in its
production of SmCo permanent magnets, uses predominately samarium metal and significant
amounts of gadolinium, rare earths for which there is no U.S. production. Additional rare earth

3 For a more-detailed discussion of the supply chain issues, economics, and global supply of rare earths, see CRS
Report R41347, Rare Earth Elements: The Global Supply Chain, by Marc Humphries.
4 U.S. Government Accountability Office (GAO), Rare Earth Materials in the Defense Supply Chain, GAO-10-617R,
April 14, 2010, p. 19, http://www.gao.gov/new.items/d10617r.pdf.
5 The second stage creates a rare earth concentrate that is then separated through a flotation separation process into
oxide. This process is referred to as beneficiation.
6 Cindy Hurst, “China’s Ace in the Hole: Rare Earth Elements,” Joint Forces Quarterly, Issue 59, 4th Quarter, 2010,
http://www.ndu.edu/press/lib/images/jfq-59/JFQ59_121-126_Hurst.pdf.
7 Japan produces some rare earth metal for the production of alloys and magnets for its own use.
Congressional Research Service
7

Rare Earth Elements in National Defense

elements needed to produce rare earth magnets such as NeFeB include small amounts of
dysprosium and possibly terbium. Currently, dysprosium and terbium are only available from
China. EEC also imports metals for its magnet production from China through North American
distributors and processes them into alloys in the United States before further processing into
sintered SmCo magnets.8 Also, Santoku America, Inc., the North American subsidiary of a
Japanese company, with a production facility in Tolleson, AZ, processes both NdFeB and SmCo
alloys used in the production of permanent magnets. Santoku America is the only U.S. producer
of NdFeB alloys.9
However, there are some new developments in the acquisition of new sources for domestic rare
earth production. Molycorp, a U.S. company with mining operations in Mountain Pass, CA,
recently announced that it restarted limited mining operations and has secured the final permits
needed to construct a rare earth manufacturing facility, which is scheduled to open in 2012.
Molycorp, the Western hemisphere’s only producer of rare earth oxides, has announced the
establishment of a cooperative research and development agreement with the U.S. Department of
Energy’s Ames Laboratory for the development of commercial-grade rare earth permanent
magnets.10
Are Rare Earths Critical Materials for U.S. Defense?
There are several definitions of what constitutes a strategic or critical material; however, there is
disagreement over what elements fall within these categories. Generally, strategic and critical
materials have been associated with national security purposes. Some experts trace the first
mention of strategic and critical materials to legislative language contained in both the Naval
Appropriations Act of 1938 and the Strategic and Critical Materials Stockpiling Act of 1939 (P.L.
76-117, 50 U.S.C. 98 et seq.), which authorized the development of an inventory of strategic and
critical materials for military use and provided funds for their purchase.11
DOD’s current position on strategic materials was largely determined by the findings of the
Strategic Materials Protection Board (SMPB).12 The purpose of the SMPB was to determine the
need to provide a long-term domestic supply of strategic materials designated as critical to
national security, and to analyze the risk associated with each material and the effect on national
defense that not having a domestic supply source might pose. The SMPB was to meet as
determined to be necessary by the Secretary of Defense, but not less frequently than once every
two years. SMPB’s last report was issued in December 2008. Given the two-year meeting
requirement, the board would have met in December 2010, but no meeting was held.

8 Confirmed on March 17, 2011, by Peter C. Dent, Vice President for Business Development, Electron Energy
Corporation.
9 Santoku America is owned by Santoku Corporation (STC) of Kobe, Japan.
10 MolyCorp and U.S. Department of Energy’s (DOE’s) Ames Laboratory Sign Cooperative Research and
Development Agreement on Rare Earth Magnets. BusinessWire, March 30, 2011, at
http://www.businesswire.com/news/home/20110330005852/en/Molycorp-Ames-Laboratory-Sign-Cooperative-
Research-Development, and Molycorp and Hitachi Metals Announce Agreement to Pursue Formation of Joint Ventures
to Manufacture Rare Earth Alloys and Magnets in the U.S. BusinessWire, December 21, 2010.
11 National Research Council, Managing Materials for a Twenty-first Century Military, and Minerals, Critical
Materials, and the U.S. Economy,
http://books.nap.edu/catalog.php?record_id=12028#toc.
12 The board was established through Section 843 of the John Warner National Defense Authorization Act for FY2007
(P.L. 109-364).
Congressional Research Service
8

Rare Earth Elements in National Defense

In the December 2008 report, 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.”13
Based on DOD’s definition for “critical material,” the 2008 SMPD report defined one rare earth
metal, beryllium, as a “strategic material critical to national security.” The SPMB offered the
following justification:
High purity beryllium is essential for important defense systems, and it is unique in the
function it performs. High purity beryllium possesses unique properties that make it
indispensable in many of today’s critical U.S. defense systems, including sensors, missiles
and satellites, avionics, and nuclear weapons. The Department of Defense dominates the
market for high purity beryllium and its active and full involvement is necessary to sustain
and shape the strategic direction of the market. There is a significant risk of supply
disruption. Without DOD involvement and support, U.S. industry would not be able to
provide the material for defense applications. There are no reliable foreign suppliers that
could provide high purity beryllium to the Department. Recognizing that high purity
beryllium meets all the conditions for being a critical material, the Department should take,
and has taken, special action to maintain a domestic supply. The Department has used the
authorities of Title III of the Defense Production Act to contract with U.S. firm Brush-
Wellman, Inc. to build and operate a new high purity beryllium production plant.14
The House Armed Services Committee criticized this definition, as discussed in the following
excerpt that appeared in the House report accompanying H.R. 2647, the FY2010 National
Defense Authorization Act.15
This definition limits the purview of the Board to only those materials for which the
determinations the Board is tasked to make are presupposed in the definition of the materials
themselves. Furthermore, such a definition fails to include a range of materials that Congress
has designated as critical to national security and, as such, has provided significant
protection or domestic preference in DOD policy and in statute. For example, Congress has
determined that reliance on foreign sources of supply for materials such as titanium,
specialty steel, and high performance magnets, poses a heightened risk. The Board’s
narrowing of the definition of materials critical to national security renders the Board unable
to provide perspective on the adequacy, suitability, or effectiveness of those policies.
Moreover, it limits the ability of the Board to consider any course of action, however minor,
in relation to a material until the point at which potential damage to national security is
imminent and severe. It also creates the perverse situation that a material could be critical to
every element of the industrial base upon which the Department depends, but not considered
critical to the Department itself if the material is also used significantly in commercial items.
As an indication of the inadequacy of this definition for the Board’s functioning, the Board
currently identifies only one material as meeting the definition for consideration as a
strategic material critical to national security. The committee does not find this conclusion to
be plausible and expects that the Board will swiftly revisit this definition to ensure that it is
able to identify gaps in our domestic defense supply chain and provide the President, the

13 Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics, Report of the Strategic
Materials Protection Board
, December 12, 2008, http://www.acq.osd.mil/ip/docs/report_from_2nd_mtg_of_smpb_12-
2008.pdf.
14 Ibid, p. 6.
15 U.S. Congress, House Armed Services Committee, H.Rept. 111-166, Report on H.R. 2647: National Defense
Authorization Act for FY2010
, P.L. 111-84, signed into law on October 28, 2009.
Congressional Research Service
9

Rare Earth Elements in National Defense

Secretary of Defense, and Congress with information, analysis, and advice on strategic
materials which are critical to the operations of the Department of Defense.
Congress has addressed this issue in the FY2011 National Defense Authorization Act (P.L. 111-
383, H.R. 6523), where strategic materials are defined as “material essential for military
equipment, unique in the function it performs, and for which there are no viable alternatives.”
Policy Issues for Congress
Some Members of Congress have expressed concern with the nearly total U.S. dependence on
foreign sources for rare earth elements. Some in Congress have raised questions about China’s
near dominance of this industry and the implications for U.S. national security. Yet the “crisis”
for many policymakers is not the fact that China has cut its rare earth exports and appears to be
restricting the world’s access to rare earths, but the fact that the United States has lost its domestic
capacity to produce strategic and critical materials and that the manufacturing supply chain for
rare earths has largely migrated to outside the United States. Still others are concerned about the
impact of availability for defense systems. Additionally, some Members of Congress have
questioned the lack of knowledge of what specific materials are needed for defense purposes,
which materials are strategic and critical to national security, and what steps might be taken to
increase the domestic capability to produce these materials.
In January 2011, three Members of Congress wrote a letter to Secretary of Defense Robert M.
Gates outlining their concerns over what they perceived as a lack of action on DOD’s part to
ensure that adequate supplies of rare earths were available. They pressed for DOD to take
immediate action, as described in excerpts below.
Clearly, rare earth supply limitations present a serious vulnerability to our national security.
Yet early indications are the DOD has dismissed the severity of the situation to date. Based
on initial discussions with the DOD Office of Industrial Policy, we understand the effort to
precisely ascertain and fully comprehend DOD consumption of certain rare earth elements is
still an ongoing effort. In our view, it is a fundamental responsibility of DOD Industrial
Policy to have a comprehensive understanding of the security of our defense supply chain,
which requires understanding detailed knowledge of the sources and types of components
and materials found in our weapon systems.
As the ultimate customer, the Department has the right and responsibility to require their
contractors to provide a detailed accounting of the various rare earth containing components
within their weapon systems. This information should then be aggregated into an element by
element overall demand for DOD. With that knowledge, DOD could compare expected
supply and demand of each rare earth element with overall consumption by the Department
to identify critical vulnerabilities in our supply chain. This will enable the Department to
establish policies to ensure the defense supply chain has access to those materials. For
example, one policy may be for the DOD to establish a limited stockpile of rare earth alloys
that are in danger of supply interruption to ensure security of supply of both metals and
magnets.16

16 U.S. Congress. Letter to Secretary of Defense Robert M. Gates, from Senator Mark Begich, Senator Lisa Murkowski,
and Representative Mike Coffman, January 28, 2011. The letter can be viewed at http://www.politico.com/static/
PPM110_110131_rare_earth.html.
Congressional Research Service
10

Rare Earth Elements in National Defense

Lack of Domestic Production Capacity in Rare Earths
Currently, the United States has only one rare earth mine production facility that is restarting
production. However, the lack of a U.S. production capacity in rare earths will persist for the next
one to two years. Molycorp, a U.S. company with a mining operation in Mountain Pass, CA, has
recently announced plans to resume production after a 10-year break. Molycorp operates a
separation plant at Mountain Pass, CA, and sells the rare earth concentrates and refined products
from previously mined above-ground stocks. As previously mentioned, Molycorp has secured the
final permits needed to construct a rare earth manufacturing facility, which is scheduled to open
in 2012.17 On January 24, 2011, Molycorp’s board of directors announced the approval of an
expansion plan that is expected to give Molycorp the ability to produce at an annual rate of up to
approximately 40,000 metric tons of rare earth oxide (REO) equivalent per year by the end of
2013.18 The company expects that by 2012, the Mountain Pass mine will be able to achieve full-
scale production of mining and separating the rare earth elements cerium, lanthanum,
praseodymium, and neodymium. However, the Mountain Pass mine will not immediately be able
to refine rare earth oxides into rare earth metals.
Some rare earth experts are concerned that DOD is not doing enough to mitigate the risk posed by
a scarcity of domestic suppliers. Many trade associations are pursuing strategies to raise
awareness about what some view as an impending rare earth crisis. Two such associations are the
Rare Earth Industry and Technology Association (REITA), a consortium of academic and
industry experts,19 and the United States Magnetic Materials Association (USMMA), a coalition
of magnet producers, representing aerospace, medical, and electronic materials, who provide
critical technologies for defense weapon systems.20 In February 2010, the USMMA unveiled a
six-point plan to address the “impending rare earth crisis,” which it asserts poses a significant
threat to the economy and national security of the United States. The six-point plan advocates the
formation of an interagency working group with the purpose of restoring a domestic rare earth
supply chain.21
Possible Foreign Supply Chain Disruptions
Some Members of Congress are concerned that disruptions in the global supply chain for rare
earths could result in a failure to meet projected needs for these elements in defense-related

17 “Molycorp Secures Last of Permits Needed for Construction Start of $531 Million Rare Earth Manufacturing Supply
Chain Project,” Business Wire, December 31, 2010, http://www.businesswire.com/news/home/20101213005938/en/
Molycorp-Secures-Permits-Needed-Construction-Start-531.
18 “Molycorp Announces Approval of Phase 2 Expansion at Mountain Pass, a Proposed Mandatory Convertible
Preferred Offering by the Company and Proposed Secondary Offering of Common Stock,” Business Wire, January 24,
2011, http://www.businesswire.com/news/home/20110124006068/en/Molycorp-Announces-Approval-Phase-2-
Expansion-Mountain.
19 See http://www.reitausa.org/renewable-energy-news/.
20 United States Magnet Material Association, “Magnet Material Supply Chain Players Propose a Six-Point Plan to
Address Impending Rare Earth Crisis,” February 4, 2010, http://www.usmagnetmaterials.com/press-releases/Six-Point-
Plan-Letter-2-04-10.pdf.
21 “Magnet Materials Supply Chain Players Propose Six-Point Plan to Address Impending Rare Earth Crisis,” Vertical
News
, February 19, 2010. This article may be viewed at http://mining-and-minerals.verticalnews.com/articles/
3201615.html.
Congressional Research Service
11

Rare Earth Elements in National Defense

production and a possible rise in rare earth costs. GAO and the U. S. Department of Energy have
examined these issues.
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 examined the rare earth supply chain issues. An
April 2010 GAO report addressed 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 the 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.22
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 assessment and had not yet identified national security risks or taken steps to
address any material shortages. DOD reported that its study would be completed by the end of
September 2010. As of March 2011, the study has yet to be completed and released to the
public.23
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.

22 U.S. Government Accountability Office (GAO), Rare Earth Materials in the Defense Supply Chain, GAO-10-617R,
April 14, 2010, at http://www.gao.gov/new.items/d10617r.pdf.
23 Unnamed sources have reported in the press that the DOD study concludes that China’s dominance over rare earths
does not pose a national security issue for the United States. However, it is reported, the study goes on to say that
defense suppliers report that neither defense contractors nor federal agencies currently track statistics for the quantities
of rare earths used in defense weapon systems. Gopal Ratnam, “Pentagon Sees No Rare Earths Crisis: May Aid U.S.
Producers,” Bloomberg News, October 31, 2010, at http://www.businessweek.com/news/2010-10-31/pentagon-sees-no-
rare-earths-crisis-may-aid-u-s-producers.html.
Congressional Research Service
12

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).24
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 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.25
Coordination of the Federal Approach to Rare Earths
Different jurisdictional needs complicate a cohesive federal approach to rare earth supply chain
policies. There is no unified opinion on whether every rare earth element is considered “critical,”
“strategic,” or necessary for economic or national security purposes. Rare earth elements fall
outside the scope of the Specialty Metal Clause, which restricts DOD from acquiring selected
items unless they are wholly produced in the United States or nations covered by a Memorandum
of Understanding.26
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 2007-2008. Initially, an interagency working group (an ad hoc working

24 U.S. Department of Defense (DOD), 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_gress, congress-2010.pdf.
25 U.S. Department of Energy, Report on Critical Materials Strategy, December 2010, pp. 58-59,
http://www.energy.gov/news/documents/criticalmaterialsstrategy.pdf.
26 For background on the Berry Amendment and the Specialty Metal Clause, see CRS Report RL31236, The Berry
Amendment: Requiring Defense Procurement to Come from Domestic Sources
, by Valerie Bailey Grasso.
Congressional Research Service
13

Rare Earth Elements in National Defense

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.27 Additionally,
the Department of Commerce OSTP’s National Science of Technology Council has a Strategic
and Critical Minerals Supply Chain Subcommittee.28
Absence of the Study of Rare Earth Application Sciences in U.S.
Colleges and Universities

There is a growing gap between the United States and China with regard to the academic study of
rare earth elements. Rare earth chemistry and rare earth application sciences are rarely offered in
U.S. colleges and universities today, while China employs thousands of scientists in both
disciplines. The only U.S. public university with a rare earths specialty is the Colorado School of
Mines, a public research university devoted to engineering and applied science. The decline in the
U.S. manufacturing base could divert engineers, metallurgists, and scientists who might pursue
careers in manufacturing into other fields of employment.
In a hearing before the House Committee on Science and Technology, Subcommittee on
Investigations and Oversight, Dr. Stephan Freiman, a scientist and former member of the National
Research Council’s (NRC) Committee on Critical Mineral Impacts on the U.S. Economy,
discussed the conclusions of a study sponsored by the NRC to examine the role of nonfuel
minerals in the U.S. economy and potential material supply vulnerabilities.29 Among the study’s
recommendations were the following:
Federal agencies, including the National Science Foundation, Department of the Interior
(including the USGS), Department of Defense, Department of Energy, and Department of
Commerce, should develop and fund activities, including basic science and policy research,
to encourage U.S. innovation in the area of critical minerals and materials and to enhance
understanding of global mineral availability and use programs involving academic
organizations, industry, and government to enhance education and applied research.
The study also recommended funding scientific research on the entire mineral life cycle and
building cooperative programs among academia, industry, and government to enhance education
and applied research.30

27 U.S. Congress, House Committee on Science and Technology, Subcommittee on Investigations and Oversight,
hearing on Rare Earth Minerals and 21st Century Industry, March 16, 2010, http://democrats.science.house.gov/Media/
File/Commdocs/hearings/2010/Oversight/16mar/Hearing_Charter.pdf.
28 NSTC Executive Order, posted January 26, 2010, at http://www.whitehouse.gov/search/site/
%22critical%20materials%22?filters=im_og_gid:7967.
29 NRC is the operating arm of the National Academy of Sciences, National Academy of Engineering, and the Institute
of Medicine of the National Academies, chartered by Congress in 1863 to advise the government on matters of science
and technology. See http://sites.nationalacademies.org/NRC/index.htm.
30 Statement of Dr. Stephen Freiman, President, Freiman Consulting, Inc., Member, National Research Council
Committee on Critical Mineral Impacts on the U.S. Economy, in U.S. House of Representatives, Committee on Science
and Technology, Subcommittee on Investigations and Oversight, hearing on Rare Earth Minerals and 21st Century
Industry, March 26, 2010, http://democrats.science.house.gov/Media/File/Commdocs/hearings/2010/Oversight/16mar/
Hearing_Charter.pdf.
Congressional Research Service
14

Rare Earth Elements in National Defense

Options for Congress
Congress may consider both short-range and long-range options for securing a source for rare
earth elements as part of its oversight role in addressing U.S. national security interests. Short-
range options potentially include requiring DOD to release the rare earths report, convening
defense suppliers to discuss rare earth material shortages, establishing rare earth material
stockpiles for defense purposes, instituting a new critical minerals program, and reconvening the
SMPB. Long-range options could include reducing DOD consumption of rare earth elements by
identifying and securing equally effective alternatives to rare earths, establishing partnerships
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.
Require DOD to Immediately Release the Rare Earths Report and
Conduct Hearings on the Report

Congress could require DOD to immediately release the rare earths report, hold public hearings
on its findings, and examine the methodology and assumptions used in collecting the data. DOD
had reported to GAO that DOD’s assessment of the defense supply chain would be released in
September 2010. As of March 2011, the report has not been released. The reasons for the delay
are uncertain. One press report stated that at least one Member of Congress was initially provided
a briefing on the report and disagreed with its conclusion, reportedly, that China’s monopoly on
rare earth materials did not pose a national security threat.31
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

31 Gopal Ratnam, “Pentagon is ‘Myopic’ Over China’s Rare Earths Monopoly, U.S. Lawmaker Says,” Bloomberg
News
, November 1, 2010, http://www.bloomberg.com/news/print/2010-11-01/pentagon-is-myopic-over-china-s-rare-
earths-monopoly-u-s-lawmaker-says.html.
Congressional Research Service
15

Rare Earth Elements in National Defense

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.”32 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
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.33
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

32 Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics, Report of the Strategic
Materials Protection Board, December 12, 2008.
33 P.L. 111-383, Section 829.
Congressional Research Service
16

Rare Earth Elements in National Defense

reliable producers and manufacturers in the United States and ally nations to perform value
added processes, such as metal, alloy and magnet manufacturing.34
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
or in national research and development centers designed to train students, scientists, and
engineers.
Institute a New Critical Minerals Program
Should DOD determine that rare earths fall into the classification of critical minerals, Congress
could institute a new Critical Minerals Program. In the early 1980s, there existed a Critical
Minerals Program aimed at warning Congress about potential supply shortages, protecting
strategic materials, and keeping an inventory of those minerals on hand in order to mitigate a
supply shock.35 This program ended in the 1990s as the consensus within Congress grew that the
market could handle mineral supply disruptions without government intervention. Two decades
later, at a 2010 hearing of the House Science and Technology Committee on rare earths, one
policymaker suggested that the time has come to revive the program:
This is not the first time the Committee has been concerned with the competitive
implications of materials such as rare earths. In 1980—30 years ago—this Committee
established a national minerals and materials policy. One core element in that legislation was
the call to support for “a vigorous, comprehensive and coordinated program of materials
research and development.”

34 “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.
35 In the first session of the 99th Congress, the role of the Critical Minerals Program was the subject of a hearing before
the House Committee on Science and Technology, Subcommittee on Transportation, Aviation, and Materials. At the
hearing (held October 8-10, 1985), Robert N. Broadbent, Assistant Secretary for Water and Science, U.S. Department
of the Interior, testified: “The Strategic and Critical Minerals Program of the U.S. Geological Survey provides a
continuing assessment of the Nation’s endowment of strategic minerals and a continuing analysis of the world’s
mineral resources for the formulation of national minerals policy and the identification of secure sources of minerals
that are critical to the security, industrial production, and economic well-being of this country and that are vulnerable to
disruption in supply”; http://www.ebooksread.com/authors-eng/aviation-united-states-congress-house-committee-on-
scien/the-national-critical-materials-act-of-1984—hearings-before-the-subcommittee-o-tin/page-2-the-national-critical-
materials-act-of-1984—hearings-before-the-subcommittee-o-tin.shtml. The testimony can also be viewed at
http://www.archive.org/stream/nationalcritical00unit/nationalcritical00unit_djvu.txt.
Congressional Research Service
17

Rare Earth Elements in National Defense

Unfortunately, over successive administrations, the effort to keep that program going fell
apart. Now, it is time to ask whether we need to revive a coordinated effort to level the
playing field in rare earths.
In particular, I want to learn if there is a need for increased research and development to help
address this Nation’s rare earth shortage, or if we need to re-orient the research we already
have underway.
Based on my review of the written submissions, it appears that we could benefit from more
research both in basic and applied materials sciences.36
Develop Partnerships with Allies to Diversify the Supply Source
Congress may encourage DOD to pursue joint ventures with other nations, as many other nations
are seeking alternatives to a near total dependence on rare earths from China. These partnerships
may take place at any stage of the supply chain. It is critical for DOD to consider the implications
of sourcing utilized by these partner nations. For example, if DOD relies on a partner nation for
rare earth metals, and that nation procures their oxides from China, this partnership may not
provide the requisite security of supply.



36 Statement of Bart Gordon, Chair, House Committee on Science and Technology, Subcommittee on Investigations
and Oversight, Hearing on Rare Earth Minerals and the 21st Century Industry, March 16, 2010,
http://sciencedems.house.gov/publications/OpeningStatement.aspx?OSID=2803.
Congressional Research Service
18

Rare Earth Elements in National Defense

Appendix. Legislative Activity
Some Members of Congress introduced several bills during the 111th and 112th Congresses that
could affect government policies on rare earths. The measures are described below.
Legislation Introduced in the 112th Congress
H.R. 1875, Building Our Clean Energy Future Now Act of 2011
H.R. 1875 was introduced by Representative David Cicilline on May 12, 2011, and referred to the
House Committees on Ways and Means, Transportation and Infrastructure, Energy and
Commerce, and Science, Space, and Technology. The bill seeks to lower gas prices by making
investments in cleaner energy technologies and infrastructure.
H.R. 1388, the Rare Earths Supply Chain Technology and Resources
Transformation Act of 2011

H.R. 1388 was introduced by Representative Mike Coffman on May 6, 2011, and referred to the
House Committee on Science, Space, and Technology, Subcommittee on Energy and the
Environment, and the Committees on Natural Resources and Armed Services. The bill is also
referred to as the Restart Act of 2011.
The bill seeks to reestablish a competitive domestic rare earths supply chain within DOD’s
Defense Logistics Agency (DLA).
H.R. 1540, the National Defense Authorization Act for FY2012
H.R. 1540 was introduced by Representative Howard McKeon on April 14, 2011. Section 835
would require the DLA Administrator for Strategic Materials to develop an inventory for rare
earths materials to support defense requirements, as identified by the report required by Section
843 of the National Defense Authorization Act for FY2011 (P.L. 111-383). H.R. 1540 (H.Rept.
112-78) passed the House, May 26, 2011.
S. 734, the Advanced Vehicle Technology Act of 2011
S. 734 was introduced by Senator Debbie Stabenow on April 5, 2011, and referred to the
Committee on Natural Resources. The proposed bill would create a basic and applied research
program, within the Department of Energy (DOE), focused on the development and engineering
of new vehicle technologies. DOE is to promote, among many other goals, the exploration of
substitutes and recycling of potential critical materials, including rare earth elements and precious
metals.
H.R. 1367, the Advanced Vehicle Technology Act of 2011
H.R. 1367 was introduced by Representative Gary Peters on April 5, 2011, and referred to the
Committee on Science, Space and Technology. S. 734 and H.R. 1367 are similar.
Congressional Research Service
19

Rare Earth Elements in National Defense

H.R. 1314, the Resource Assessment of Rare Earths (RARE) Act of 2011
H.R. 1314 was introduced by Representative Henry Johnson on April 1, 2011, and on April 6 was
referred to the House Natural Resources Committee’s Subcommittee on Energy and Mineral
Resources. The bill would direct the Secretary of the Interior, through the Director of the U.S.
Geological Survey, to examine the need for future geological research on rare earth elements and
other minerals and determine the criticality and impact of a potential supply restriction or
vulnerability.
H.R. 952, the Energy Critical Elements Renewal Act of 2011
On March 8, 2011, Representative Brad Miller introduced the Energy Critical Elements Renewal
Act of 2011. The bill was referred to the Committee on Science, Space, and Technology. The bill
would develop an energy critical elements program, amend the National Materials and Minerals
Policy Research and Development Act of 1980, establish a temporary program for rare earth
material revitalization, and serve other purposes.
S. 383, the Critical Minerals and Materials Promotion Act of 2011
On February 17, 2011, Senator Mark Udall introduced the Critical Minerals and Materials
Promotion Act of 2011. The bill was referred to the Committee on Energy and Natural Resources.
The bill would require the Secretary of the Interior to establish a scientific research and analysis
program to assess current and future critical mineral and materials supply chains, strengthen the
domestic critical minerals and materials supply chain for clean energy technologies, strengthen
education and training in mineral and material science and engineering for critical minerals and
materials production, and establish a domestic policy to promote
an adequate and stable supply of critical minerals and materials necessary to maintain
national security, economic well-being, and industrial production with appropriate attention
to a long-term balance between resource production, energy use, a healthy environment,
natural resources conservation, and social needs.37
H.R. 618, the Rare Earths and Critical Materials Revitalization Act of 2011
On February 10, 2011, Representative Leonard Boswell introduced the Rare Earths and Critical
Materials Revitalization Act of 2011. The bill was referred to the Committee on Science, Space,
and Technology.
The bill seeks to develop a rare earth materials program and amend the National Materials and
Minerals Policy, Research and Development Act of 1980. If enacted, it would provide for loan
guarantees to revitalize domestic production of rare earths in the United States.
S. 1113, The Critical Minerals Policy Act of 2011
On May 26, 2011, Senator Lisa Murkowski introduced the Critical Minerals Policy Act of 2011.
The bill generally defines what critical minerals are but would request that the Secretary of the

37 S. 383, Section 6, Supply of Critical Minerals and Materials.
Congressional Research Service
20

Rare Earth Elements in National Defense

Interior establish a methodology (in consultation with others) that would identify which minerals
qualify as critical. The Secretary of the Interior would direct a comprehensive resource
assessment of critical mineral potential in the United States, including details on the critical
mineral potential on federal lands. S. 1113 would establish a Critical Minerals Working Group to
examine the permitting process for mineral development in the U.S. and facilitate a more efficient
process, specifically, draft a performance metric for permitting mineral development and report
on the timeline of each phase of the process. The DOI would produce an Annual Critical Minerals
Outlook report that would provide forecasts of domestic supply, demand, and price for up to 10
years. DOE would lead research and development on critical minerals and workforce
development that would support a fully integrated supply chain in the United States. Title II of the
bill recommends mineral-specific action (led by DOE) for cobalt, helium, lead, lithium, low-btu
gas, phosphate, potash rare earth elements, and thorium. Title III would, among other things,
authorize for appropriation $106 million.
Legislation Introduced in the 111th Congress
In the 111th Congress, two bills were enacted that contain provisions affecting rare earth policy.
The first was P.L. 111-84 (H.R. 2647), the National Defense Authorization Act for FY2010.
Section 843 of P.L. 111-84 required the Government Accountability Office (GAO) to examine
rare earths in the defense supply chain, and it 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.38 The second bill was P.L. 111-383, the Ike Skelton National Defense
Authorization Act for FY2011, which contains a provision (Section 839) that requires the
Secretary of Defense to undertake an assessment of the supply chain for rare earth materials and
determine which, if any, rare earths are strategic or critical to national security and to develop a
plan to address any supply chain vulnerabilities.39 Other legislative provisions are listed below.
H.R. 4866, the Rare Earths Supply-Chain Technology and Resources
Transformation Act of 2010

On March 17, 2010, Representative Mike Coffman introduced the Rare Earths Supply-Chain
Technology and Resources Transformation Act of 2010 (RESTART). The bill was referred to
three committees: the House Armed Services Committee, the House Ways and Means
Subcommittee on Trade, and the House Financial Services Committee.
The bill sought to create a new interagency initiative on rare earth supply chain issues. H.R. 4866
would have established a federal government-wide interagency working group, at the Assistant
Secretary level, from the Departments of Commerce, Defense, Energy, the Interior, and State,
with participants from the U.S. Trade Representative (USTR) and White House Office of Science
and Technology Policy. The working group would have assessed the rare earth supply chain to
determine which rare earths were critical to national and economic security. Based on a critical
designation, rare earth elements would have been stockpiled by the Defense Logistics Agency
(DLA) as part of the National Defense Stockpile. The DLA would have made, if necessary, a

38 P.L. 111-84 was signed into law on October 28, 2009.
39 It should be pointed out that much of the language of the RESTART Act, proposed by Representative Mike
Coffman, was included as an amendment to the FY2011 Ike Skelton National Defense Authorization Act, which was
passed in the House on May 28, 2010, during the 111th Congress.
Congressional Research Service
21

Rare Earth Elements in National Defense

commitment to purchase rare earth raw materials for processing and refining, including purchases
from China. Stockpiling would have been terminated when the working group agencies
determined that rare earths were no longer critical to U.S. national security or economic well-
being.40
H.R. 6160, the Rare Earths and Critical Materials Revitalization Act of 2010
On September 22, 2010, Representative Kathleen Dahlkemper introduced the Rare Earths and
Critical Materials Revitalization Act of 2010. The bill sought to develop a rare earth materials
program and amend the National Materials and Minerals Policy, Research and Development Act
of 1980. If enacted, the bill would have provided for loan guarantees to revitalize domestic
production of rare earths in the United States. The bill was passed by the House on September 29,
2010, and forwarded to the Senate Committee on Energy and Natural Resources.
S. 3521, the Rare Earth Supply Technology and Resources Transformation Act
of 2010

S. 3521 was introduced by Senator Lisa Murkowski on June 22, 2010. Congress held a hearing on
the bill before the Senate Committee on Energy and Natural Resources, Subcommittee on
Energy, on September 30, 2010. The text of the bill offered a “Sense of the Congress” statement
that
(1) the United States faces a shortage of key rare earth materials that form the backbone of
both the defense and energy supply chains; (2) the urgent need to reestablish a domestic rare
earth supply chain warrants a statutory prioritization of projects to support such
reestablishment; (3) there is a pressing need to support innovation, training, and workforce
development in the domestic rare earth supply chain; and (4) the Departments of Energy, of
the Interior, of Commerce, and of Defense should each provide funds to academic
institutions, federal laboratories, and private entities for innovation, training, and workforce
development in the domestic rare earth supply chain.

40 The bill directs the Secretaries of Commerce, of Defense, of Energy, of the Interior, and of State to (1) appoint an
Executive Agent, at the Assistant Secretary level, to serve as a representative on an interagency working group to
reestablish a competitive domestic rare earth supply chain, and (2) assess and report to Congress on the chain,
determining which rare earth elements are critical to national and economic security. It directs the United States Trade
Representative (USTR) and the Office of Science and Technology Policy also to appoint representation to such
working group. It requires the Secretary of Defense to commence procurement of critical rare earth materials and place
them in a national stockpile, and the Defense Logistics Agency, Defense National Stockpile Center, to serve as
administrator of the stockpile. It authorizes the administrator, if necessary to meet U.S. national security and economic
needs, to purchase rare earth materials from the People’s Republic of China. It instructs the USTR to (1) initiate and
report to Congress on a comprehensive review of international trade practices in the rare earth materials market; or (2)
initiate an action before the World Trade Organization (WTO) as a result of the review. It directs the Secretaries of
Commerce, of the Interior, and of State to report to the domestic rare earth industry about mechanisms for obtaining
government loan guarantees to reestablish a domestic rare earth supply chain. It directs the Secretaries of Defense and
of Energy to issue guidance for the industry related to obtaining such loan guarantees. It expresses the sense of the
Congress regarding a prioritization of Defense Production Act projects with respect to the domestic rare earth supply
chain.
Congressional Research Service
22

Rare Earth Elements in National Defense

S. 4031, the Rare Earths Supply-Chain Technology and Resources
Transformation Act of 2010

S. 4031 was introduced by then-Senator Evan Bayh on December 15, 2010, and referred to the
Senate Committee on Energy and Natural Resources. The bill would have promoted exploration
and development of a domestic supply of rare earths, and reestablished a U.S. competitive rare
earth supply chain for rare earths in the United States and in the countries of foreign allies.

Author Contact Information

Valerie Bailey Grasso

Specialist in Defense Acquisition
vgrasso@crs.loc.gov, 7-7617


Congressional Research Service
23