Rare Earth Elements: The Global Supply Chain as Reported by CRS

U.S. Was Once Self-Reliant in REEs, But Now Supplies Come from China

There are 17 rare earth elements (REEs), 15 within the chemical group called lanthanides, plus yttrium and scandium. The lanthanides consist of the following: lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, and lutetium. Rare earths are moderately abundant in the earth’s crust, some even more abundant than copper, lead, gold, and platinum. While more abundant than many other minerals, REE are not concentrated enough to make them easily exploitable economically. The United States was once self-reliant in domestically produced REEs, but over the past 15 years has become 100% reliant on imports, primarily from China, because of lower-cost operations.

There is no rare earth mine production in the U.S. Molycorp Minerals operates a separation plant at Mountain Pass, CA, and sells the rare earth concentrates and refined products from previously mined above-ground stocks. Neodymium, praseodymium, and lanthanum oxides are produced for further processing but these materials are not turned into rare earth metal in the U.S.

Used in Catalytic Converters, TVs, Laptops, Cellphones, Hybrid Car Batteries, Defense Items

Some of the major end uses for rare earth elements include use in automotive catalytic converters; fluid cracking catalysts in petroleum refining; phosphors in color television and flat panel displays (cell phones, portable DVDs, and laptops); permanent magnets and rechargeable batteries for hybrid and electric vehicles; generators for wind turbines; and numerous medical devices.

There are also important defense applications, such as jet fighter engines, missile guidance systems, anti-missile defense, and space-based satellites and communication systems.

World Demand for REEs Exceed Supply

World demand for rare earth elements is estimated at 134,000 tons per year, with global production around 124,000 tons annually. The difference is covered by previously mined above-ground stocks. World demand is projected to rise to 180,000 tons annually by 2012, while it is unlikely that new mine output will close the gap in the short term. New mining projects could easily take 10 years to reach production. In the long run, however, the U.S. Geological Service expects that global reserves and undiscovered resources are large enough to meet demand.

House Has Passed Bill to Support Domestic Production

Legislative proposals H.R. 6160 (Dahlkemper), H.R. 4866 (Coffman), and S. 3521 (Murkowski) have been introduced to support domestic production of REEs, because of congressional concerns over access to rare earth raw materials and downstream products used in many national security applications and clean energy technologies. The House approved H.R. 6160 on September 29, 2010, by a vote of 325-98.