Top 5: Exporters of Rare Earth Elements to the United States

Today we’re starting a semi-regular series called “Top 5.” You may be asking “Top 5 what?” We will be periodically examining some general background of the larger issues we analyze by looking at major characteristics of the things of which we speak. That might sound vague, but that’s because it is intended to be a flexible device. For example, we may take snapshots of the top 5 oil producers, top 5 reserve holders of certain minerals, top 5 provinces currently negotiating water treaties involving hydroelectric damming of Himalayan water sources, or anything else we think might be helpful to you and for our own research. And we of course welcome suggestions for top 5-style explorations that would provide useful background to any natural security topics.

With all this in mind, today I am examining the top 5 countries that export rare earth elements (REEs) to the United States. These elements—used in products ranging from catalytic converters (pdf) and mp3 players to precision-guided munitions (pdf)—are commonly grouped together because of their chemical similarities, but the name is confusing because they’re not particularly rare. I am choosing to use the term “rare earth elements” instead of “rare earth metals” or “rare earth minerals” because it is the preferred term of the National Academy of Sciences, which issued an excellent report in 2008 entitled Managing Materials for a Twenty-first Century Military. This report notes two different series of elements are often included under the banner of REEs: the lanthanide series (atomic numbers 57 to 71) and the actinide series (atomic numbers 89 to 103), along with individual elements scandium and yttrium. But not all sources (pdf) include the actinide series when talking about REEs. We will keep our focus away from the actinide series for the sake of this post, since the actinides include the radioactive elements, and radioactivity raises special complications.

Below are the top five exporters of lanthanide series REEs and REE compounds (including scandium and yttrium) to the United States for the years 2004 to 2007 (the most recent data available).

1. China:  By all accounts, China is the current dominant producer of REEs, but various sources cite different statistics on this. For example, The New York Times reported in September that China supplies 93% of the REE market; the National Academies provide the figure of 76% of the world market between 2002 and 2005; and the USGS notes (pdf) that about 96% of 2008 REE production took place in China (though several countries’ data are listed as “not available”). Some of the differences likely occur because some sources count sales, some count production, some go by yet other measures, and most differ on the years they include. But the big takeaway is the same: China has been the largest source of U.S. REE imports for years. It recently set off alarms in the West by announcing plans to seriously restrict exports of REEs, proving that it is keenly aware of its market share, and aware of the demand for REEs in American products and for the U.S. defense industry.
2. France: According to the USGS, 5% of U.S.REE imports come from France. But France does not pull any REEs (pdf) from its own soil; it gets the elements from China. Rhodia Inc., a French company, makes catalytic and electronics products out of REEs, which it then ships to the United States. Similar patterns are found in most of the top exporters to the United States: China supplies a nation with the elements, and that nation makes them into usable products that it ships to the United States.
3. Japan: Japan exports finished rare earth compounds and products to the United States, but it is in fact the world’s top importer of REEs. The USGS reports that Japan is responsible for 4% of U.S. imports of REEs. Japan makes products for the steel and electronics industries using REEs, and of course its auto industry has been using them in hybrid cars for years.
4. Russia: Russia, which is responsible for 2% of U.S. REE imports, actually does produce some of its own REEs. But the USGS (or any other source I’ve found to date) does not clarify whether the United States imports mainly raw elements or finished products from Russia.
5. Other:  The USGS lists “other” as the number 5 supplier of REEs to the United States. Exploration for REEs is ongoing in several countries, and some—including the United States—already have schemes ready to begin mining in the next few years. Who is the next big thing in REE production? Is it Canada? Greenland?  Australia? The United States itself? These proposed projects are in various stages of completion, but it takes time to extract the elements and make them into usable products, and to draw up and implement new contracts, so it appears that China will dominate the REE market for the immediate future.

Perhaps the most important natural security takeaway is that DoD has taken notice of the REE controversy and is beginning to study its supply chain security. In addition, Senator Evan Bayh (D-IN) and Congressman Mike Coffman (R-CO) inserted provisions into the FY 2010 National Defense Authorization Act (NDAA) calling for DoD to report to Congress on vulnerabilities in its REE supply chain by April 2010. President Barack Obama just signed the final version of the NDAA into law, so a report is due to the Armed Services Committees of both houses by April 1 of next year. Hopefully it will contain a bit more detail about REE supply chains; as this little exercise proved, it can be difficult to piece together good information on rare earths.