Struggling U.S. Rare Earth Industry is Vital to a Stable Global Economy

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Rare earth elements are found in nearly every aspect of our lives. Televisions, smartphones, tablets, computers, stereos, and cars all contain rare earth elements. Our national security also relies on rare earths in precision-guided missiles, radar, night-vision goggles, lasers, satellites, fighter jets, and submarines. Virtually every aspect of modern society relies in part on rare earth elements.

Not long ago, the U.S. led the world in the rare earth industry and pioneered many of its common applications. However, due to burdensome regulations and strategic foreign investment, many U.S. mines were shut down or struggled to compete with foreign competition. Today, China has a virtual monopoly, roughly 95 percent of the mining, refining, and processing of rare earths occurs there. This dominance causes the U.S. and other nations to depend on China for the natural resources needed in a modern society.

This dependence on China is not lost on the Director of National Intelligence, General James Clapper, who discussed it in congressional testimony, as part of an annual “Worldwide Threat Assessment.”

Many are concerned that China will flex its muscles and disrupt the rare earth supply chain for strategic reasons. This occurred previously when China temporarily cut off rare earth exports to Japan over a territorial dispute.

The only producing U.S. domestic rare earths mine is located in Mountain Pass, California and is operated by Molycorp, Inc. On a recent 60 Minutes episode, Constantine Karayannopoulos, chairman of Molycorp, stated that regulators and the industry need to “take a long-term view” on how to bring more of the rare earth industry back to the U.S. “And it’s probably going to take us 10, 15 years, if we execute, for some of these supply chains to start coming back.”

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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