Defense Media Network

Concerned U.S. Officials Seek to Curb China’s Rare Earth Dominance

Alarmed over China’s dominance of rare earths critical for U.S. defense and civilian technology, several federal and state officials are calling on Congress and the White House to develop a comprehensive approach that builds stable domestic sources.

Analysts noted that a Colorado congressman remains particularly vocal in calling for a national rare-earth policy. The representative says he’s worried not only that China controls 95 percent of the world’s rare earth production but that it keeps adding new restrictions to curtail supplies.

Rep. Mike Coffman (R-CO) recently released a letter demanding the U.S. file a complaint with the World Trade Organization (WTO) against China over unfair trade practices regarding export restrictions on rare earth oxides and metals.

“China’s handling of this issue poses a threat to both the economic security as well as the national security of the United States,” said Coffman, who sent a copy of the letter to every member of Congress soliciting support for a formal trade complaint against China.

That letter followed a February ruling by the WTO that it is illegal for China to impose trade restrictions on various raw materials. Coffman wants to extend that ruling to the 17 periodic elements that make up rare earths used in satellite communications and missile guidance systems, among other defense applications.

“A disruption in supply could jeopardize national security, hinder our long term efforts to achieve domestic energy security, and damage our world-leading high tech industries,” Coffman said in a prepared statement accompanying his letter.

Coffman has tried for nearly two years to get Congress to adopt comprehensive rare-earth legislation that could create a strategic stockpile of these elements.

Separately, both U.S. Senators from Alaska have written to Defense Secretary Robert Gates asking him to consider establishing a “limited” stockpile of rare earths in support of the nation’s defense infrastructure.

So far, Pentagon officials have sidestepped the debate. Spokesmen have cited plans by Molycorp to reopen a long-shuttered southern California as a potential source of stable, domestic rare-earth supplies.

For their part, Chinese officials say they merely want to safeguard their rare earth deposits to meet the needs of the country’s aggressive economic growth and forays into clean energy, which also employ rare earth elements.

But critics say that explanation is a ruse to cover China’s attempt to force foreign high-tech companies to move operations to the world’s most populous country.

Critics and supporters agree on this much: to maintain control over rare earths, China employs both overt and covert actions. Overtly, the country has increased export restraints several times since 2006, and plans additional export cuts at least through the first half of this year.

Covertly, critics say, China’s recent policy of cracking down on widespread illegal mines is in reality an attempt to further restrict supply by forcing small companies out of business. Industry observers say rogue operations in southern China produce about half of the world’s supply of highly valuable heavy rare earths.

The two actions have sent rare-earth prices soaring. For instance, neodymium used in magnets recently closed above $200 a kilogram. The price represented a 383 percent increase in less than a year, says Metal-Pages, an industry journal that tracks specialty metals.

Meanwhile, Alaska’s governor is asking the White House to support rare-earth mining in his state, known for hosting a wide range of other natural resources like gold, silver and oil. Gov. Sean Parnell is seeking federal loan guarantees, tax credits, and mining grants.

In a letter to President Barack Obama, the governor said a site at Bokan Mountain contains more than 70 known occurrences of rare earths. Noting that much of Alaska lies within federal lands, the governor said at the very least the state wants expedited federal mining permits.

Parnell cited statistics showing it takes roughly 10 years to receive all the relevant permits required to operate a new U.S. mine. He compared the situation unfavorably with Australia, which supports its rare-earth industry and processes permits in as little as a year.


Michael A. Robinson has written articles for some of the nation's more prestigious publications. As...