CRS – Rare Earth Elements: The Global Supply Chain

by Sabrina I. Pacifici on January 2, 2014

Rare Earth Elements: The Global Supply Chain. Marc Humphries, Specialist in Energy Policy. December 16, 2013.

“The concentration of rare earth elements (REEs) production in China raises the important issue of supply vulnerability. REEs are used for many commercial applications including new energy technologies, electronic devices, automobiles, and national security applications. Is the U.S. vulnerable to supply disruptions? Are these elements essential to U.S. national security and economic well-being? The examination of REEs for new energy technologies reveals a concentrated and complex global supply chain and numerous end-use applications. Placing the REE supply chain in the global context is unavoidable. The current goal of U.S. mineral policy is to promote an adequate, stable, and reliable supply of materials for U.S. national security, economic well-being, and industrial production. U.S. mineral policy emphasizes developing domestic supplies of critical materials and encourages the domestic private sector to produce and process those materials. But some raw materials do not exist in economic quantities in the United States, and processing, manufacturing, and other downstream ventures in the United States may not be cost competitive with facilities in other regions of the world. However, there may be public policies enacted or executive branch measures taken to offset the U.S. disadvantage of its potentially higher cost operations. The private sector may achieve lower cost operations with technology breakthroughs. Based on this policy framework, Congress and the Administration are discussing the impact of China’s near-monopoly position in rare earth elements and a range of potential federal investments that would support the development of a vertically integrated rare earth supply chain in the United States.”

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