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Report: China Earth Exports Policy Could Potentially Affect U.S. Military

Site: ustr.gov

The U.S., Japan and the European Union challenged China’s restrictions on rare-earth exports during a World Trade Organization meeting Thursday.

Rare-earths are minerals considered to be critical to the production of civilian and military technologies, according to Wall Street Journal.

President Obama indicated the minerals play an important role with advanced batteries and hybrid cars, the Journal reports.

While issuing their complaints, President Obama and U.S. Trade Representative Ron Kirk did not make mention of the military applications the minerals play a role in, the Journal points out.

The materials are used for smart bombs, night vision goggles and laser guiding systems. The civilian space applies the minerals to applications spanning cell phones to powering wind turbines, the report said.

The Journal said it obtained a Congressional report indicating the U.S. is increasingly capable of meeting the demands of the defense space for rare earth materials

Rep. Mike Coffman (R-Col.), disagrees with the stance that U.S. domestic supplies can meet its needs, according to the report. He has long backed legislation that would require the U.S. military to develop a strategy for sourcing and stock-piling rare earth supplies.

China leads the market in rare earth material production, processing and consumption, which the Journal suggests gives the nation confidence imposing limits on annual rare-earth exports and tax sales.

Chinese export policies have elevated prices in recent years and created concern that international demand will exceed availability. Sources from China have said the policy aims to protect resources, the environment and to create sustainable development, according to the report.

The Defense Department recently conducted a report, Rare Earth Materials in Defense Applications, which identified seven rare earths the military uses and found that the U.S. should be able to sufficiently produce six of them.

The Pentagon predicts the market will stabilize by 2015 as a result of mining outside China, lower prices and lower forecast of international demand.

The Journal said Congress issued requests for additional reports as how industry trends will affect the armed services.

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