Looming like a storm cloud on America’s horizon is the long-held monopoly of rare-earth metal production by China. The “rare” in rare-earth metals belies their availability as several of these minerals and metals have vast deposits. Despite their abundance even in America, China has been able to obtain a literal monopoly on their usage in production. Through this monopoly, China has emerged as the sole manufacturer utilizing rare-earth metals, which play a vital role in the manufacturing of many high-tech applications and the enormous commercial value that comes with them.

“The situation is nothing short of a crisis,” says Karl A. Schneider Jr., a senior metallurgist at Iowa State University’s Ames Laboratory, who has been studying rare-earth materials there since the 1960s. “There is nearly zero rare-earth mining, processing and research going on now in the U.S.”

As a result the U.S. has virtually ceased production of rare-earth products, he adds. The main concern with the production in the U.S. regarding these metals is that rare-earth metals are key in the development of many technologies in the computer, electronics, transportation, energy, and defense industries. For example, neodymium magnets are found in every modern computer disc drive, as well as the motors and motor generators used in hybrid cars, windmills and other green energy technologies.

Due to their enormous application alone, the mining and purifying industry of these metals value in the billions. Dudley J. Kingsnorth, executive director of Industrial Minerals Co. of Australia, based in Mount Claremont, reports that worldwide demand for rare-earth metals was valued at $1.3 billion in 2007.

Yet even if America did not mine or refine these elements (which we easily could do), the manufacturing and production of the products should remain a priority for American industries. Despite the huge value in mining these minerals, the production and development of technologies utilizing these metals is even more valuable. For example, the neodymium magnet market is estimated to be worth $9 billion; China has an near-absolute monopoly on this market.

“Today, nearly 100 percent of the world’s rare-earth metals and more than 94 percent of rare-earth oxides come from China,” says Peter C. Dent, vice president for business development at Electron Energy, in Landisville, Penn. Electron Energy is one of the few remaining domestic designers and manufacturers of the high-performance rare-earth magnets.

“In 1970, we were one of the first companies in the world to produce rare-earth magnets,” Dent says. By the late 1980s and early 1990s, the American magnet industry reached its peak, with more than 20 companies manufacturing a large variety of magnets. But then the 1990s witnessed a decline and eventually a wholesale migration of this industry to China, according to Dent. “Now we find ourselves to be the last rare-earth magnet maker in the U.S.,” he says.

The 1990s. Interesting that this coincides directly with the rising popularity and utilization of outsourcing. America has outsourced not only its wealth and jobs but the very ability to advance and produce products that are necessary for both the future development and national security of our country. To add to the severity of our situation, prices in China are starting to rise. If we do not do something soon, America will have a difficult time supplying their need for these products.

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