New US Defense Bill Sparks Massive Race For Domestic Rare Earth Elements

According to the publication, the John S. McCain National Defense Authorization Act is The Single Biggest Legislative Development in the Rare Earths Market since 2010.

Jeff Green of  D.C. based J.A. Green & Co., a full-service, bipartisan government relations firm that this “is the single biggest legislative development in the rare earth sector since the 2010 Chinese embargo created an awareness of our military’s reliance on foreign rare earth materials.”  In an interview with, Green wrote:

“The new law which sets an increased budget for defence expenditure prevents the purchase of rare earth magnets from China, which currently produces 85-90% per cent of the world’s rare earth magnets. Some 90% of rare earths consumed by the US military are produced by China.

The new law takes effect immediately, but practically speaking, it will take the DoD some time to implement the law through regulation and to start including the prohibition in new contracts.

To be clear, this law only applies to the use of Chinese NdFeB (Neodymium, Iron, Boron) and SmCo (Samarium, Cobalt) magnets, the latter being already subject to a previous law requiring domestic sourcing.

The new law, 10 U.S.C. 2533c, closely mirrors an existing domestic sourcing law, ‘the specialty metals clause’, at 10 U.S.C. 2533b.  While the latter is a Buy American clause, the former states DOD will not allow rare earth magnets and tungsten in weapon systems that is produced by potential adversaries.

The law explicitly prohibits rare earth magnets and tungsten from being ‘melted or produced’ in China, Russia, North Korea and Iran. That means the production of the magnet can’t be in those countries, so importers and distributors can’t simply bring magnet block into another country and finish into a final part – the law is designed to reinvigorate rare earth magnet manufacturing outside of China.

The DOD may ask in the near future for new materials to be added to 10 U.S.C. 2533c, so there’s a good chance that this precedent continues as the Trump Administration seeks to eliminate the strategic vulnerability of foreign import reliance for critical materials – this bodes well for prospective producers outside China and Russia.”

The impact of frosty relations between the USA and China coupled with the new Bill suggest there could be a dramatic halt to important supplies for REEs.

Researchers at the National Energy Technology Laboratory (NETL) are working on ways to secure a supply of rare earth elements, which are materials used to manufacture many technology devices, including many defense and energy technologies.

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U.S. manufacturers use more than 17,000 tons of rare earth elements (REEs) each year for everything from electric cars to mobile phones. However, nearly all of the nation’s REEs are imported from China.

NETL is focused on recovering REEs from domestic coal and coal-related byproducts, which can contain a significant concentration of these valuable elements. Some formations hold greater potential than others for commercial rare earth extraction. For this reason, NETL researchers are coming up with a way to predict REE concentrations in coal and coal-related strata systematically. This will show where conditions are most favorable for REE deposits.

Also, to gain further insight on the ease of extraction, researchers are using advanced microscopy and imaging techniques to identify key REE-bearing minerals in coal-associated rock formations.

Additionally, researchers are investigating the use of environmentally friendly liquids for recovering REEs from sedimentary rock.

The extraction of rare earth elements from underclay deposits shows great promise as a new way of securing a domestic supply. That, in turn, will lead to technological solutions to America’s energy challenges.

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