One of my favorite consulting slogans of all time — “Analysis Paralysis — aptly captures the state of US public policy on rare earth metals and critical minerals (not to confuse the two). After our story last week on testimony presented to the House Committee on Natural Resources, urging the Committee to take action on a number of bills involving rare earth metals, we heard from Jeff Green, a well-known rare earth and specialty metals lobbyist. Green wanted to share some of his perceptions of current legislation and where he thinks US public policy needs to go to begin addressing some of the strategic supply constraints.
Rare Earth Stockpiling
“A lot of people are misperceiving what is being debated related to a stockpile, Green said. “The only proposal on the table involves a new version of the RESTART Act (Rare Earths Supply Chain Technology and Resources Transformation (RESTART) Act of 2011) that calls for a 250-ton inventory of rare earth alloy and rare earth magnets. The concept involves creating a small vendor-managed inventory that could be drawn down in a time of war. The “stockpile would involve the government essentially buying up capacity from one of the US mining firms, as opposed to actually taking title and inventory. This approach, according to Green, provides critical domestic demand, a key component of re-starting US industry.
An Incremental Approach the RESTART Act
Another approach, one that Green favors, was offered by Rep. Mike Coffman (R-Co.) as an amendment to the Fiscal Year 2012 National Defense Authorization Act. It requires the DOD to create a Rare Earth Inventory Plan that would explore risk mitigation for those individual elements expected to be in short supply like neodymium and dysprosium.
This plan would be a follow-up to another congressionally mandated report, due to come out this summer, that essentially includes a supply and demand analysis by element for DOD. The Coffman amendment to the FY12 NDAA would require the Defense National Stockpile Center (now renamed Defense Logistics Agency Strategic Materials) to look at the elements in shorter supply and identify how the government plans on securing those elements and downstream value-added products such as metal, alloy and magnets. The amendment would only cover defense applications (not commercial), though the executive branch could take it further, should it so choose, according to Green.
Rather than try broad-brush solutions, Green suggests approving smaller incremental approaches that actually offer solutions. For example, he suggests passage of an initial bill that covers specific rare earth metals as opposed to all or other critical materials such as copper and cobalt that could quickly spin legislative action out of control.
Neodymium, Samarium, Dysprosium, Yttrium, Terbium: Good Places to Start
The “heavies, as they are commonly referred to, present a different challenge as the US currently does not produce any of these elements.
Moreover, according to the U.S. Magnetic Materials Association (USMMA), the following defense applications remain dependent upon rare earth materials. In particular, precision-guided munitions (requiring samarium-cobalt or neodymium iron boron permanent magnets), neodymium iron boron magnets used in helicopter stealth technology, tanks and other vehicles use rare earth lasers for range finding, military communication satellites and yttria-stabilized zirconia used in “hot sections of jet engines, according to the USMMA.
The USMMA supports legislation that “emphasizes production to restart reliable domestic manufacturing for these key materials as well as defense-specific stockpiling for the most critical of the 17 rare earth elements via the Defense Logistics Agency.
At the end of the day, according to Green, US public policy should focus on only two initiatives:
- Define what we are short of
- Determine how we get it
It’s hard to argue with that. But with some estimates of the time needed to rebuild a rare-earth supply chain of 15 years, and a minimum of two years to create magnet facilities for sintered neodymium iron boron permanent magnets, Congress had better start acting soon.