Washington: In a move to end reliance on China for rare earth minerals for manufacture of missiles, munitions, hypersonic weapons and radiation hardened electronics by making targeted investments, the Pentagon has proposed legislation that aims to end this.
This legislation would raise spending caps under the Defence Production Act to enable government to spend up to US$1.75 billion on rare earth elements in munitions and missiles and US$350 million for microelectronics. It would also eliminate caps when it comes to hypersonic weapons.
The proposal was offered earlier this month for inclusion in the annual defence policy bill Congress has been drafting.
“To me, this is the biggest thing that has happened to rare earths in a decade,” Jeffrey Green, a defence industry consultant and advocate for government intervention on rare earth materials, said on May 18. “The policy shift is the government is realising they have to put serious bucks into this.”
The US government recently awarded contracts for heavy rare earth separation and issued solicitations for the processing of light separation and for neodymium magnets, which are used in Javelin missiles and F-35 fighter jets. Under current law, DoD cannot invest more than US$50 million in DPA funds without additional congressional notification, but the Pentagon’s legislative proposal would raise this cap to US$350 million, to invest in multiple projects.
These processes can be expensive, and the process for separating rare earth oxides can cost hundreds of millions dollars, Green said.
“The recent awards are like a drop in the bucket, for very small scale pilot programmes. It’s nowhere near what they’d need to get a commercial facility, even to support DoD’s very small volume,” Green said. “They have to put big dollars in if they want to separate the oxide at a state-of-the-art facility that’s going to be anywhere close to Chinese pricing.”
China accounts for at least 71 per cent of rare earth production globally and is the largest source of rare earth imports to the US, according to a Congressional Research Service report. The US was once a major producer from the mid-1960s until around the late 1980s when China became a major low-cost producer and exporter.
In August, Undersecretary of Defense for Acquisition and Sustainment Ellen Lord told reporters that the Pentagon was in early talks with US ally Australia to have it process a significant portion of rare earth materials for the US military. The Australian firm Lynas, which has a mine in Australia and a processing plant in Malaysia, was central to that plan.
In the wake of the Coronavirus pandemic and rising tensions between Washington and Beijing, lawmakers have quickly introduced a range of measures aimed at creating domestic alternatives to Chinese supplies for protective equipment and medicines from China to the US. However, the DoD legislation is one link in a chain of actions in recent years by the Trump administration.
“China is currently the sole source or primary supplier for many chemicals required to make ingredients in missiles and munitions end items. In many cases, there is no other source for these foreign sourced materials and no drop-in alternatives are available,” DoD’s proposal reads.
