Rare earths crisis debuts on ‘Call of Duty’ before administration has a plan
Rare earths – 17 minerals whose production is almost completely dominated by the Chinese and are essential in renewable energy products and advanced weapons systems – may seem like an odd pairing with the fast-paced, pulse-pounding, over-the-top action of a blockbuster video game like “Call of Duty: Black Ops II.”
Anyone familiar with the game knows that it models itself more on SEAL Team 6 and less on the Defense Logistics Agency. This year’s offering, however, offers a plot focused on rare earth materials and a “cold war” developing between the United States and China over access to these critical materials. Though the kinetic pace of the action is pure Hollywood, the competition between the countries for these critical materials is anything but fiction.
Although players have many options to win in the game, it is unclear whether the Obama administration, which is neglecting proven mining and development strategies that could develop a domestic rare earth supply, is playing to win in the real world. The contours of this neglectful rare earth policy have become clear through the attitude of the Department of Defense and the widely announced recent World Trade Organization case.
At the end of last year, the Defense Department released a lengthy report about the industrial capabilities of the defense industrial base, concluding that stable non-Chinese sources of rare earth oxides are essential to the U.S. supply chain. The report recommended the development of risk-mitigation plans and partnerships with domestic industry to obtain and retain rare earth processing capabilities.
But less than six months later, the Defense Department reversed course and concluded that rare earths “are not uniquely important.” This report also assumed 100 percent of the very few heavy rare earths mined in the United States would be available to meet defense needs. The Defense Department also cited its ability to stake priority claims under Title I of the Defense Production Act, effectively noting that it could seize material from commercial users to meet its needs.
Alarmingly to industry analysts concerned about the ability of the United States to maintain access to rare earths, the Defense Department looks favorably on “corporate restructuring within the supply chain,” likely referring to the acquisition of Neo Material Technologies Inc. and their Chinese processing plants by Molycorp Inc., the only domestic producer of rare earth oxides. The Congressional Research Service recently described this pending acquisition as a plan to export rare earths to China, where they then would be subject to Chinese export restrictions should U.S. industry need them back. Whether they would be allowed to return to the United States remains an open question.