U.S. remains dependent on China for rare earth elements.

• Author: Parsons, Dan
• Position: Energy

* The U.S. military is almost completely dependent on China for the rare earth elements that go into everything from batteries to precision-guided bombs, according to a report by the Congressional Research Service.

U.S. materials manufacturers recognize the Chinese near-monopoly as a national security issue and are encouraging a debate over how to regain the nation's ability to create these valuable substances, said Vijendra Sahi, vice president of government affairs for Palo Alto, Calif.-based Nanosys.

"China is right on our heels. We still have a slight lead, but it's riot a very large lead," Sahi said of battery manufacturing technology. "While we make a lot of the finished cells for batteries here, a lot, if not most, of the chemistry is sourced from China."

China produces 97 percent of the world's rare earth oxides, said a Congressional Research Service report published in April. It is also the only exporter of commercial quantities of refined rare earth elements, the report concluded.

"There may be repercussions if these materials are not available for commercial and defense applications," the CRS report said. "The rare earths supply chain vulnerability question may adversely affect the ability of the United States to plan strategically for its national security needs.

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The Defense Department conducted its own study, published in March, and found that China's stranglehold on rare earth production could soon be at an end with new production facilities coming online in the United States and Canada. The U.S. military will be able to meet most of its demand for rare earths by 2013, the Defense Department report concluded. One such company, MolyCorp Inc., has a rare earth mine and production facility at Mountain Pass, Calif., where it is stockpiling oxides used in both commercial and military technologies.

For Sahi, pursuing domestic battery chemistry production is a question of national security...