Published Date:
27-May-2011
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The oversight hearing explored a critical question: how do overseas supply disruptions affect U.S. industry players and consumers? Mr. Richardson made it clear that China, which controls 97 percent of the world’s rare earth supply, has wielded monopolistic power – reducing export quotas across the board, threatening export bans to certain countries, forcing companies to move operations to China and share technologies in order to access resources, and causing widespread uncertainty and discomfort within the global market for these materials. He noted that while “most assets that make up the rare earth value chain do not exist here in the United States, several domestic companies have stated their desire to reenter this market if and when market conditions support it.” Mr. Richardson highlighted U.S. dependence on Chinese rare earth supplies for key weapons and energy systems, such as precision guided munitions, hybrid vehicles, and wind turbines that require neodymium iron boron or samarium cobalt permanent magnets for their functionality.

However, it is not enough to point out challenges. USMMA offered solutions at this hearing, including a “manufacturing first” approach to mitigate U.S. dependency on unreliable foreign suppliers. This strategy would establish a domestic capability to manufacture rare earth end products, like permanent magnets, through incentivizing U.S. commercial involvement in the end-to-end value chain, leveraging materials available from trusted ally nations like Australia and the United Kingdom, and giving defense component manufacturers an alternative to Chinese suppliers. Mr. Richardson provided detailed information for the consideration of subcommittee members, and USMMA intends to continue engagement with key members and staff to increase understanding of – and spur much-needed action on – this important national security and green technology area.

More information on the USMMA and the text of Mr. Richardson’s written testimony can be found here.

USMMA members include:

Thomas & Skinner, Inc. is the world’s leading manufacturer of cast and sintered alnico magnets, magnetic assemblies, and transformer laminations. Through its wholly-owned subsidiary Ceramic Magnetics, Inc., Thomas & Skinner is also a leading manufacturer of soft ferrite magnets.

Hoosier Magnetics, Inc. specializes in the manufacturing of hard ferrite powders used in a wide variety of permanent magnet applications. Founded in 1975 in Washington, Indiana; Hoosier is a privately held company owned by Dr. B. Thomas Shirk.

Electron Energy Corporation is a worldwide leader in samarium cobalt magnet production and offers design services and rare earth magnet assemblies. Electron Energy is the only US operated rare earth magnet company that still melts its magnet alloys in-house.

U.S. Rare Earths, Inc., an American natural resources development company based in Salt Lake City and New York City, holds large resources and reserves of high-grade rare earth metals and the largest documented high-grade thorium properties in the world within its properties in Idaho and Montana, including a large portion of known and estimated U.S. reserves.

The Arnold Magnetic Technologies Corporation, a privately owned corporation comprised of five strategic businesses, manufactures a wide range of both permanent and soft magnetic products and assemblies at facilities in the United States, the United Kingdom, Switzerland and China.

Great Western Minerals Group is a Canadian-based specialty metals production company with a vertically-integrated business model in the rare earth element industry through exploration and mine development. Through its wholly-owned subsidiaries, Less Common Metals Limited, located in Birkenhead UK, and Great Western Technologies Inc., located in Troy, Michigan, the Company produces a variety of specialty alloys for use in the rechargeable battery, permanent magnet, automotive and aerospace industries.

Lynas Corporation has a strategy of creating a reliable, fully integrated source of supply from mine through to customers, and to become the benchmark for security of supply and environmental standards in the global Rare Earths industry. Lynas owns a rich deposit of Rare Earths at Mt Weld in Western Australia.