WASHINGTON (Scrap Monster): The United States Magnetic Materials Association (USMMA), a trade association dedicated to restoring a competitive, secure, end-to-end rare earth supply chain to support the domestic manufacturing of rare earth permanent magnets, released a “Myth-Fact” paper to clarify key points relevant to the successful re-introduction of a “mine-to-magnets” strategy.

This Myth-Fact paper lays out 7 common assumptions about the rare earth supply chain, determines whether these assumptions are grounded in reality, and provides accurate quantitative and policy support for the truth of the situation. In particular, the paper highlights 7 points..

1. Rare earths are rare due to access issues. While rare earth elements are abundant in the earth’s crust, the ability to locate economically viable concentrations is indeed rare.

2. China is an unreliable supplier of rare earth materials on the global marketplace. China, which produces more than 95 percent of all rare earth oxides and nearly 100% of rare earth metals for world consumption, has dramatically reduced exports, decreased production, increased taxes, and embargoed trading partners. Anticipating further price increases, many Chinese suppliers have proven reluctant to quote pricing and availability to consumers;

3. Extraction is not simple and U.S. companies cannot quickly develop extraction capabilities. In fact, processing rare earth elements is much more complicated and costly than processing other ores. The multi-step process can cost more than $500 million per location and take up to 10 years for mine development and permitting;

4. Increasing global demand will outstrip supply of key rare earths, such as neodymium, dysprosium, europium, terbium, and yttrium. Critical shortfalls in these elements will impact green technologies (e.g., hybrid cars, wind turbines), digitized and miniaturized electronic goods (e.g., mobile phones), and defense applications (e.g., missiles, radars, avionics). To address the most critical national security aspect of this looming crisis, the U.S. Government can establish a stockpile of neodymium iron boron and dysprosium iron alloys, as called for in H.R. 1388, the Rare Earths Supply-Chain Technology and Resources Transformation Act of 2011 (or RESTART Act), introduced by Representative Mike Coffman (CO-6) in April 2011;

5. Domestic production capabilities are limited or nonexistent. The United States produces limited rare earth oxides and alloys and no rare earth metals and has one supplier of samarium cobalt magnets and no suppliers of neodymium iron boron magnets. It recommends robust activity in key areas to support a “manufacturing first” approach that supports mining of rare earth ores domestically and in cooperation with ally nations and promotes U.S. capabilities on the manufacturing end of the supply chain. Such an approach would include stockpiling value-added materials to support defense requirements and emphasis on re-starting a reliable, domestic magnet manufacturing capability;

6. Years of research into substitutes have produced no viable alternatives to rare earth materials. U.S. national security will continue to rely on rare earth metals, alloys, and magnets in the foreseeable future. Defense legacy systems alone will require access to rare earths for decades; and

7. No large-scale reuse or recycling programs are ongoing. While necessary research and development – led in large part by Japanese companies – is underway, U.S. companies have not yet participated in these efforts in a meaningful way.