Congress Recognizes Strategic Importance of Neodymium

Source:

"Bill directs DoD to restore domestic neodymium production capability"

On Friday, The House of Representatives approved the National Defense Authorization Act, which outlines the U.S. Department of Defense's (DoD) budget and expenditures. Included in the act was an amendment to formulate a plan to establish a domestic source of rare earth element (REE) neodymium.

Neodymium-based magnets are currently the strongest and longest-lasting type of magnet. While 50% of the element is still used in computer hard drives, neodymium is also used in wind turbines and electric motors, which makes it an important part of the U.S.' Green Initiative and an important strategic resource.

The amendment outlined and accepted the findings of a recent GAO report, concluding that only Chinese companies are producing and selling commercial quantities of REEs, REE processing is performed only in China and worldwide supplies are expected to tighten significantly within the next three to five years as demand continues to grow.

The bill directs the DoD to restore domestic neodymium production capability. Promising deposits in Australia, Greenland, Canada and the United States could be in production as early as 2014. But, with an obvious shortage of REE infrastructure outside of China, the bigger problem is developing U.S.-based refining capabilities to completely rebuild the supply chain.

Complicating matters, patent licensing will need to be worked out with Japan-based Hitachi Metals for the patent to process light REE alloys into magnets using a small amount of cobalt. However, the patent will expire in 2012. Thomas & Skinner last manufactured neo magnets in the U.S. in the1990s and maintains the technical capabilities required to successfully restart neo magnet production. It is currently evaluating reentering the defense supply market by constructing a dedicated new facility on its urban Indianapolis campus.

The Senate will also work on its own version of the bill. The legislation is expected to be signed into law later this year for implementation in 2011.

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