Future Supply of Rare Earth Elements


Legislation Introduced in Congress

Future Shortage of Rare Earth Metals

Electronics companies will be affected by the future availability of rare earth elements (REE), also known as rare earth metals. REE are used in commercial and military electronics, "green energy technologies," and other applications. Although REE are located all over the world, most of the current global supply is sourced from active mines in China. A number of studies and a recent survey of electronics companies all signify that the demand for REE is likely to exceed supply very soon. Unfortunately, ongoing discussions within governments about the future shortage of REE have not yet been converted into laws or other tangible actions. Electronics companies should pay close attention to the rapidly changing trends in REE supply because any shortage of REE in the near future will affect the electronics industry.


Rare earth metals were so named because they were hard to obtain in the 18th and 19th century. Rare earth metals are vital materials for a variety of clean-energy technologies such as wind turbines, electric-car batteries (lithium), compact fluorescent light bulbs (neodymium), solar panels (gallium) and the storage of electricity using cells and batteries. For example, yttrium is essential to the red color in flat panel displays for computer screens, cell phones, and vehicle dashboards. Without high-performance neodymium magnets, manufacturers would be forced to use larger and heavier ones in electronics products such as speakers in cell phones and hard drives for laptops. Rare earth metals are also used in the mass production of miniaturized electronics and associated devices, LEDs and advanced weapons systems and platforms for national defense.

Demand for REE is expected to exceed its supply in the near future. According to the U.S. Congressional Research Service, only a few mining companies are developing REE, and because of long lead times needed from discovery to refined elements, supply constraints are likely in the short term. The Chinese government estimates that at the current pace of mining, China will run out of all heavy REE to be found in China in approximately 15 years. To preserve REE for domestic use, China reduced their REE exports by 72 percent starting in the second half of 2010. China continues to export REE at a reduced level. This cutback in REE supply will affect companies around the world. Independent analysts forecast that global demand for REE will likely exceed supply in 2011. David Sandalow, Assistant Secretary of Energy for Policy and International Affairs, U.S. Department of Energy describes the future supply of REE, "There's no reason to panic, but every reason to be smart and serious as we plan for growing global demand for products that contain rare earth metals." A future limited by the supply of REE may not be very distant.

The United States receives nearly 97 percent of all the rare earth resources it uses from China (Government Accountability Office Report, April 2010). Because of internal demand, China is moving to drastically reduce exports. Independent analysts forecast that rest-of-world demand for rare earth metals will likely exceed Chinese exports by 2011.

Extraction of rare earth metals is limited to geographical concentrations found only in a handful of countries. The U.S. has not mined REE's since 2002. Closed mines are now attempting to re-open and there have been additional recent discoveries of REE in the United States.

North America's largest rare earth mine recently re-opened after an eight-year hiatus. The mine is located in Mountain Pass, California, and is owned by Molycorp Minerals. There are different forecasts of the amount of REE that is expected to be extracted.

IPC Actions

IPC is a member of the Rare Earth Working Group. The working group comprises representatives from many industries impacted by the impending shortage of available REE.

IPC joined a dozen other trade associations in urging the U.S. Department of Energy (DOE) to act expeditiously on applications for loan guarantees applications from U.S. companies seeking to develop or re-open rare earth facilities in the U.S. We were successful in influencing the DOE to remain committed in their support of a loan guarantee program to assist companies re-establish a rare earth metal supply chain in the U.S.

View the joint letter from IPC and other trade associations to the Department of Energy (.pdf)

View the response from the Department of Energy (.pdf)

Government Actions

The Department of Energy is developing a Critical Materials Strategy focused on rare earth metals and other materials used in the energy sector. The Energy Department's goal is to build a better understanding of rare earth metals supply and demand, identify ways to use such materials more efficiently and see if there are any opportunities for developing substitutes for those elements.


Congress is considering legislation regarding rare earth metals. On May 26, 2011, Sen. Murkowski (Alaska) introduce a bill that seeks to revitalize the United States' critical minerals supply chain and reduce the nation's growing dependence on foreign suppliers by directing the U.S. Geological Survey (USGS) to establish a list of minerals critical to the U.S. economy and providing a comprehensive set of policies to address each economic sector that relies upon critical minerals.

IPC joined the U.S. Chamber of Commerce and the National Association of Manufacturers in shaping and supporting this much needed legislation. We added our name in support letters to Congress.

View the joint letter from IPC and the U.S. Chamber of Commerce (.pdf)

View the joint letter from IPC and the National Association of Manufacturers (.pdf)

In the last session of Congress the Department of Defense (DoD) is directed to begin taking actions addressing the future supply of REE for items used for defense applications. The 2010 National Defense Authorization Act (Public-Law 111-383) directs the DoD to conduct an assessment of the supply and demand of REE for use in defense applications. The DoD is also directed to develop a plan to ensure the long-term availability of REE's that are deemed critical for defense applications.


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