Will "rare earth" manipulation cause a high-tech meltdown?

Foreign control of hard-to-find materials used in hybrid cars, satellites, cell phones and computers could put United States in a perilous position

China controls 97% of the "rare earth" materials used to build everything from hybrid cars, lasers and radar systems to satellites, cell phones and computers - a situation that could put the United States in a perilous strategic position if not fixed. 

That was the chief conclusion of a report issued this week by watchdogs at the Government Accountability OfficeRare earth materials are used in many applications for their magnetic and other distinctive properties and include 17 elements with names such as lanthanum, lutetium, neodymium, yttrium and scandium. 

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According to the GAO: The United States previously handled 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. 

On top of that, rebuilding a US rare earth supply chain could take up to 15 years and is dependent on several factors, including securing capital investments in processing infrastructure, developing new technologies, and acquiring patents - many of which are currently held by international companies, the GAO stated.

The report went on to say the US has the expertise but lacks the manufacturing facilities to refine oxides to metals. For example, the US is not currently producing neodymium iron boron (NeFeB) permanent magnets used for computer hard drives and cell phones and has only one samarium cobalt (SmCo) magnet producer.  SmCo is used a lot in what's known as a traveling-wave tube, an electronic device that amplifies radio signals. 

Perhaps not surprisingly, the military depends heavily on such materials. According to the GAO, the Department of Defense has begun a review assessing its dependency on rare earth materials, that it plans to complete by the end of September 2010. DOD plans to assess its use of these materials as well as vulnerabilities in the supply chain that could impact national security. The use of rare earth materials is widespread in defense systems, including precision-guided munitions, lasers, communication systems, radar, avionics, night vision equipment and satellites.  

The GAO noted a couple military systems that could be hurt:

  • The Aegis Spy-1 radar, which is expected to be used for 35 years, has samarium cobalt magnet components that will need to be replaced during the radar's lifetime.
  • The M1A2 Abrams tank has a reference and navigation system that uses samarium cobalt (SmCo) permanent magnets. The samarium metal used in these magnets comes from China. 

Defense officials told the GAO that future generations of some defense system components, such as radars, will continue to depend on rare earth materials. In some cases, new systems in development will also rely on components that depend on those substances. 

A 2009 National Defense Stockpile configuration report identified lanthanum, cerium, europium, and gadolinium as having already caused some kind of weapon system production delay and recommended further study to determine the severity of the delays. Defense officials have been involved in efforts to transform the National Defense Stockpile so that materials not produced domestically will be available to support defense needs, the GAO stated. 

Making matters more troubling, China has adopted domestic production quotas on rare earth materials and decreased its export quotas, which increases prices in the Chinese and world rare earth materials markets, the GAO found.  China increased export taxes on all rare earth materials to a range of 15 to 25% and some government and rare earth industry officials believe that that in the future China will only export finished rare earth material products with higher value, the GAO stated. 

The solution to the rare earth problem could lie within our border but challenges exist there too.  For example, the GAO states that rare earth deposits exist in Idaho, Montana, Colorado, Missouri, Utah, and Wyoming, but these deposits are still in early exploratory stages of development. Once a company has secured the necessary capital to start a mine, government and industry officials said it can take from 7 to 15 years to bring a property online, largely due to the time it takes to comply with multiple state and federal regulations. 

Some rare earth minerals include radioactive products, such as thorium and radium, which make extraction difficult and costly. In addition, US mines and processing facilities must comply with environmental regulations, the GAO stated. 

The GAO says one existing mine, the Mountain Pass mine in California, could be fully operational by 2012.  Although the Mountain Pass mine is the largest non-Chinese rare earth deposit in the world, the mine currently lacks the manufacturing assets and facilities to process the rare earth ore into finished components, such as permanent magnets. The mine also does not have substantial amounts of heavy rare earth elements, such as dysprosium, which provide much of the heat-resistant qualities of permanent magnets used in many industry and defense applications, the GAO noted. 

The GAO report also notes that there is ongoing work within government agencies to at least begin to address the rare earth problem:

  • The Department of Commerce assembled a roundtable to review governmentwide options in addressing potential rare earth shortages.
  • The Office of Science and Technology Policy in the Executive Office of the President recently hosted an interagency meeting to discuss rare earth materials supply and demand and plans ongoing interagency coordination on the issue.
  • The Department of Energy reported that it has several research and development efforts to develop non-rare-earth material-dependent motors, reduced rare earth material usage in magnets, and alternatives to rare earth dependent wind generators. In addition, the department recently announced that it will develop a strategic plan for addressing the role of rare earth and other strategic materials in clean energy technologies. 

Follow Michael Cooney on Twitter: nwwlayer8   

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