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Supplies of rare earths improve

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By Bloomberg News
Tuesday, Dec. 17, 2013, 8:24 p.m.

China's virtual monopoly on rare earth elements used in high-technology applications has been loosened, reducing the risk that supplies to Defense contractors could be disrupted, according to the Pentagon's latest assessment of the nation's industrial base.

“Global market forces are leading to positive changes in rare earth supply chains, and a sufficient supply of most of these materials likely will be available to the defense industrial base,” according to the report by Elana Broitman, the Defense Department's top official on the industrial base. “Prices for most rare earth oxides and metals have declined approximately 60 percent from their peaks in the summer of 2011.”

Rare earths are 17 chemically similar elements used in products from Apple Inc.'s iPads and hybrid-electric cars to smart bombs and Tomahawk cruise missiles made by Raytheon Co.

“An increase in supply of material from outside of China” and the substitution of other substances have reduced reliance on China since 2011, when it controlled 95 percent of the world's supply and imposed export restrictions, said the report, which was sent to Congress last week.

The Defense Department is “conducting research in cooperation with a domestic producer to develop an economic and environmentally superior process for producing rare earth metals,” according to the report, which said that defense requirements generally are a small percentage of demand for the materials.

“These conclusions are wishful thinking, not a defense strategy,” Jeff Green, president of J.A. Green & Co. in Washington, who represents miners and users of the elements, said.

“We still have no producers of the more defense-critical heavy rare earths, and significant gaps remain in the domestic production of metal, alloy and magnets, all found in our most critical weapons, with no appreciable investment planned to solve the production problem,” he said.

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