Rare Earths, Critical/Strategic Metals and U.S. Legislative Agenda


"The first challenge involves a lack of information about critical materials."

Yesterday, we wrote a post on the notion of stockpiling and posed it as a question—should we or should we not stockpile? Today, Jeff Green addressed conference attendees of the Managing Supply Chain Risk for Critical & Strategic Metals and provided a legislative overview of federal legislation designed to either require the DOD to purchase certain items from domestic sources (The Berry Amendment) or restrict the purchase of strategic materials considered critical for national security (Specialty Metals Provision). Earlier this year, the Office of the Secretary of Defense and the Strategic Materials Protection Board issued an analysis that declared, "specialty metals are not materials critical to national security."

Though the legislative history of these metals plays a role in the evolution of where Congress stands today on rare earths, specialty metals, as well as high performance magnets, three strategic challenges remain. The first challenge involves a lack of information about critical materials. Former President Bush, according to Green did not believe specialty metals should carry a designation of critical whereas President Obama appears willing to examine the issue further. The second challenge involves the creation of a clear definition of the term strategic metals. Finally, Green suggests the National Defense Stockpile requires a new framework including a new approach to meeting current and future DOD needs, a more collaborative approach supported by industry experts, global market intelligence and market research and "an integrated risk assessment construct to analyze supply sources and risks of supply chain interruption and identify mitigation strategies."

According to Green, the National Defense Authorization Acts (one bill proposed by the House, the other by the Senate) call for in the case of the Senate bill, an independent industry sponsored report on current and projected domestic worldwide availability of these metals and in the case of the House bill, a GAO report on availability. The bills will likely get reconciled to include a study (report) on sources of rare earths, projected availability, use in DOD systems, risks of dependence and global trends. This measure is long overdue and could help shape the course of private sector supply options, as well.

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