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America is Finally Waking Up to the Fact that China Controls Our Military’s Future

Photo credit: Flickr/U.S. Army.

More than 95% of the world's rare earth elements are produced in China. That probably doesn't bother most Americans. Few of us have even heard of, nor can we pronounce, the 17 rare earth elements critical to our country's future.

Names like dysprosium, erbium, europium, gadolinium, neodymium, praseodymium, and yttrium are foreign to us. However, we might want to get to know these rare earths, as the seven I just cited are important components of our nation's defense. Rare earths are used in Raytheon's (NYSE: RTN  ) Tomahawk cruise missiles, as well as in making smart bombs, missile guidance systems, and even night-vision technology. That's in addition to being important components for cell phones, wind turbines, and a host of other tech systems.

Are we in denial?
The U.S. military has played down our reliance on China for rare earths. It has said that military use of rare earths are only a "small fraction" of U.S. demand. Furthermore, the Department of Defense believes that military needs can largely be met by domestic production.

Congress in 2011 tasked the Pentagon to study the use of rare earth elements in defense applications to ensure we had adequate long-term availability if non-U.S. supplies were halted. The Defense Department was also to secure a source of these materials by 2015. One congressman  went so far as to suggest that the U.S. should begin stockpiling rare earths to ensure we have a sufficient supply to meet our future needs.

There is hope
According to its latest report,  the Defense Department sees "positive changes in rare earth supply chains." The report forecasts lower consumption of rare earths worldwide, suggesting that we'll have more than enough supply to meet the demand of our nation's military. In addition, domestic production of six of the seven key rare earths is expected to increase this year.

China leads the way with 55 million tons of extractable reserves, and it produced 95,000 tons of rare earth elements in 2012, America has about 13 million tons of reserves, though production was just 7,000 tons in 2012. That should change as U.S.-based Molycorp (NASDAQOTH: MCPIQ  ) reaches full production capacity at its long dormant mine in Mountain Pass, Calif., this year. The company sees full capacity reaching 19,000 tons a year. That project will go a long way to satisfying the U.S. military's demand.

One more worry?
Unfortunately, there is still one rare earth to worry about. Production of yttrium isn't expected to keep pace with U.S. military demand in the coming years, as it's a particularly scarce element. The "heavy" element is used in precision lasers and rocket stabilizers. At the current rate, the U.S. won't be able to meet its yttrium demand until about 2019. Overall, the good news in all of this is that America is waking up to the fact that we can't rely on China to supply our nation with these important elements. We are taking steps forward to secure our supply. In doing so, we'll ensure the security of our nation as well.

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Read/Post Comments (16) | Recommend This Article (21)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 12, 2014, at 8:44 PM, AllenElliott wrote:

    1 Cor 1:18-19

    18 For the message of the cross is foolishness to those who are perishing, but to us who are being saved it is the power of God. 19 For it is written:

    "I will destroy the wisdom of the wise;

    the intelligence of the intelligent I will frustrate."


  • Report this Comment On January 13, 2014, at 3:46 AM, dwduke wrote:

    China is becoming more important than the Middle East. China has the bomb, and many of them. China has the largest military on the planet. China is getting more and more into high tech weaponry and will eventually perfect it. After all, China reveres education far more than the US does, and as a result there are a bunch of Chinese graduates who know their stuff, and will help China become the preeminent super power on the planet. The US will have to learn from Great Britain what its like to lose the top perch.

  • Report this Comment On January 13, 2014, at 7:44 AM, stockwatcher0153 wrote:

    There are also rare earth resources in Central Asia and Latin America (the Atacama Desert straddling the Bolivian/Peruvian border).

  • Report this Comment On January 13, 2014, at 11:06 AM, cityperson wrote:

    Chinia is becoming the next super power, but most in the US do not want to face this fact. But we have the Department of Education for dumbing down the kids and other Americans. We will wake up some day, but when is the question? I wroked in the defense industry for many years and seen allot of things coming and will continue.

  • Report this Comment On January 13, 2014, at 11:17 AM, Ridingcrops wrote:

    This is now news? It has been news since the deserting coward dumya and his buddies sold of this element to line their pockets. Of course we will hear it's Obamas fault just like we heard Steele say Obama started the war in Afghanistan. BUt it's been common knowledge for years that our military has a 90 day suply of spare parts in case something happens and they let US companies contract this important business to China. Where is the common sense?

  • Report this Comment On January 13, 2014, at 1:02 PM, HenryJuhala wrote:

    What is not reported here and gets under-reported elsewhere is the fact that there is a major rare earth minerals deposit in Northwest, Wyoming just north of Sundance, WY and West of Belle Fourche, SD. It is in an area of the Black Hills known as the Bear Lodge Mountains or more specifically near Bull Hill about 10 miles North of Sundance.

    The mine is being developed by a company called Rare Element Resources. It has already identified and verified deposits of multiple rare earth minerals along with a significant amount of gold. Though I believe, at present, they are not planning to mine the gold and focus solely on rare earth elements. Currently the project is entering the Environmental Impact Statement phase of the development.

    I have no financial, investment or business related interest in the project or anything else that would benefit from the mine . Just reporting the information as a former nearby resident.

  • Report this Comment On January 13, 2014, at 1:32 PM, admtjr wrote:

    It's not just China, but a whole lot of countries that run American's Lives. If you don't know that by now you need to go back to school. 7th grade level at least.

  • Report this Comment On January 13, 2014, at 1:36 PM, jfelano wrote:

    Duh why do you think we got Rovers searching all over Mars and drilling into the ground? Looking for signs of water? LOL get real. We've known for 50yrs there used to be water on Mars, were not still looking for signs of it.

  • Report this Comment On January 13, 2014, at 1:47 PM, OScammieeyou wrote:

    Obama was never intended to function as it was sold to American public-it is rigged as a spoof phishing scam to gather data otherwise unattainable under Federal H.I.P.A. now snookering the unsuspecting public the weakest and vunerable into opening up once sealed medical files diverted in the process to Obama's own personal use that of which allowed him to issue directives to FDA to fast track approvals for any bio tech companies working on drugs targeting these illnesses in which teh President's blind investment trust takes insider position the efficacy of drugs being tested never at issue as FDA is not a scientific research org. but an political device as past FDA insiders along with bio tech doctors and scientists have been charge with insider trading over the years only that semblance of a cure be made for a quick buck.

    Obama will leave office the wealthiest man on Earth while taxpayers who cant afford insurance fund his exploits.

  • Report this Comment On January 13, 2014, at 3:02 PM, BarbelSS580 wrote:

    Is anybody curious about why China "suddenly" removed the 1-child per family rule ? What will all these babies born over the next two years be doing, say, 20 years from now ? China certainly doesn't need more mouths to feed, more homeless or more smog ! Maybe they'll need soldiers and sailors to drive tanks into singapore or ship drivers to patrol the south china sea.

  • Report this Comment On January 13, 2014, at 5:51 PM, delta4ce1 wrote:

    I wouldn't say that message of the cross is exactly foolishness but Jesus, if what his biographers said was right, said that it wasn't necessary to salvation. What he said was necessary was the correct understanding and application of the golden rule because it is "the way, the truth, and the life" that existed from the beginning and saves those who trust in it. John 1:1-5, Matthew 19:16 ff, Mark 10:17 ff, and Luke 10:25 ff. Jesus wasn't God in the sense some say but his commitment to the golden rule or the "word" made it possible to speak of him as the golden rule incarnate.

    With that said, I've heard that the Chinese government is promoting the teaching of Confucius in order to develop some better moral ethics in the people and Confucianism is exactly the same thing that Jesus taught though he most likely had never even heard of Confucius. You see, the golden rule is really just common sense even though people are generally afraid to trust it due to not clearly understanding it.

  • Report this Comment On January 13, 2014, at 6:25 PM, eacano wrote:

    The U.S. has many strategic rare earth mineral deposits in Northern California, Montana and elsewhere. As molycorp demonstrated it only takes a year or so to build the infrastructure to mine and process the ore if there is a profit incentive.

    see also:

  • Report this Comment On January 14, 2014, at 6:40 AM, iosax wrote:

    gee, i was worried sick that we may not be able to build all the bombs Raytheon wants to build

  • Report this Comment On January 14, 2014, at 6:50 AM, hollywoodlafl wrote:

    China has more than "Control" over the manufacturing of our Military hardware, they also hold a good portion of our debt!

    Be aware that if they ever decided to take over our country, they could manufacture lots of 'duds' when we defend ourselves.

    This is truly a stupid idea, to have someone else manufacture our military hardware.

    We may as well build munition factories throughout the M/E!

  • Report this Comment On January 14, 2014, at 11:41 AM, dfagan wrote:

    The US has deposits of these minerals, but processing them is a dirty process with waste products that are radioactive and hard to deal with.

    The Chinese hamstrung Japanese industry a couple years ago by witholding rare earths, so they are well aware of their control and are sure to use it again.

  • Report this Comment On January 22, 2014, at 9:22 PM, daveh wrote:

    We depend on china for way to much, heck do some research we dont even make incandescent light bulbs any more, zero, not a single one. Yet as someone who works on aircraft in the military I can tell you we use tons of tiny little bulbs. What happens if the next war is against china and we can even swap the stupid little bulbs.. its insane and stupid.

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Matt DiLallo

Matthew is a Senior Energy and Materials Specialist with The Motley Fool. He graduated from the Liberty University with a degree in Biblical Studies and a Masters of Business Administration. You can follow him on Twitter for the latest news and analysis of the energy and materials industries:

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