The report, released by the United States Geological Survey, stated the United States is 100% dependent on foreign imports for at least 20 elements and minerals, including 17 classified as rare earth minerals critical to the development of high-grade magnets used in aircraft and missile systems.
In addition to the use in military hardware, many rare earth minerals are critical for the development of GPS systems, satellite imaging, night vision goggles, and consumer products like smartphones and flat-screen televisions.
One country has a near monopoly over exporting rare earth minerals to the United States: China.
According to the report, the United States is 100% reliant on foreign countries (most notably the African nations of Gabon and South Africa) for the mineral manganese, which is used to make impact resistant steel.
Despite being readily available from mines in Arizona, Arkansas, and Minnesota, manganese can be imported more cheaply. There has been no domestic production of manganese since 1970.
“That 2017 USGS report is not fake news,” said George Byers, a 40-year veteran of the mining industry and an expert on rare earth minerals. “You have 29 or 30 studies on critical materials, including rare earths that go back to the early ‘90s. The outcome of each study is to declare ‘we have a crisis, let’s do something about it.’ But all they do about it, is to ask for another study.”
Molycorp, the only significant domestic producer of rare earth metals, went bankrupt in 2015 following a decision by the Obama administration to not bail it out of its $1.4 billion debt.
A Swiss investment firm linked to Vladimir Iorich, a Russian-born billionaire with German nationality, is reportedly attempting to purchase the Mountain Pass mine in California, the largest domestic source of rare earths once operated by Molycorp.
The trend of outsourcing control over rare earth minerals reached its peak in 1995, when the Clinton administration allowed two major domestic rare earth producers located in North Carolina and Indiana to go out of business and transferred their production capacity to China.
General Motors sold Magnequench, a company that used rare earth minerals to manufacture magnets critical for military weapons systems, in 1995 to a group of investors including the Soros Fund Management and two Chinese firms; five years later, the company opened a new plant in Tianjin, China.
Rep. Duncan Hunter (R-Calif.) of has expressed plans to introduce a bill later this month to require the military to obtain rare earth minerals that are produced exclusively in the United States, even if it requires subsidizing companies involved in mining them.
“This is of critical importance to our national security and ability to stay ahead of everyone else,” he told Fox News. “Rare earth metals are crucial. We’ve closed down mines in my own state of California, which is the leading edge of stupid.”
“We need to have our own rare earths. The big sticking part of the bill is this. You have to put money in to subsidize our own product to create a market, because now there’s no market. We’ve got to put American manufacturing back in competition.”
Hunter’s bill would divert funds from developing aircraft and missile systems to supporting the domestic production of rare earth minerals. It would also provide five-year interest free loans to domestic producers, allowing them the opportunity to redevelop long-neglected facilities.
The threat of China cutting off the world’s supply of rare earth minerals is real.
“Absolutely, China could cut off the supply,” said Jeff Green, a defense industry analyst. “Processing rare earths is the end of the hose. China controls the spigot the hose is attached to.”