Insight by STS International

Rare earth elements present challenges, opportunities to the U.S. economy, defense, and supply chain

Economy

If everything is tied into one source, one spot, or one country in this case, then you're very limited. And if they decided to cut that off from you, then you lose all of your options.

Military/Defense

We're trying to create a dialogue, trying to create urgency both from the economic piece and from the military to really get after this.

Supply Chain

Rare Earth Elements . . . a critical component of the entire supply chain because it's the beginning, the nexus of what all of the electronics come from. So, if you don't have those, you can't build them.

David Morgan, co-founder and vice president of operations at STS International, and retired Army Gen. John F. Campbell recently joined Federal News Network to discuss the impact of rare earth elements (REE). One may be surprised to learn how dependent the United States military is on a sole source for this key part of our defense capability.

Morgan indicated that 95% of REE are controlled by China. This could be a very effective chokepoint if hostilities ever broke out between the United States and China. Strategically, Campbell said the U.S. military should acknowledge the precarious position it is in.

“If everything is tied into one source, one spot, or one country in this case, then you’re very limited,” Campbell said. “And if they decided to cut that off from you, then you lose all of your options.”

These little-known elements are key components of much of today’s technology. In the military, Campbell indicated a lack of REE could result in loss of communications, loss of geospatial information, and elimination of backup systems.

“Whether it was having sonar capability to look at the ships on the sea or submarines underneath, those types of military applications are very dependent upon rare earth elements. So, it’s a national security discussion that we need to have,” he said.

Morgan said this position impacts the commercial sector as well.

“Most people don’t realize that rare earths are critical components of today’s electronics both in consumer, commercial, and industrial applications,” he said. “They do things like develop into magnets, into lasers, things like that, that are critical for us to use now in our everyday life.“

Most federal leaders have a general idea about supply chains. Typically, one thinks of hardware when it comes to the supply chain. For example, where is the router manufactured? What about the components that allow the router, or battery, or aerospace part to be manufactured?

“There’s a bunch of enabling technologies that go into the blockchain that potentially could revolutionize this type of problem where you’re trying to track a component or a product through the supply chain to customers,” Morgan said.

Ultimately, both Morgan and Campbell believe it is incumbent on the national leadership to recognize the problem with rare earth elements and develop a policy that will take the United States out of this vulnerable position.

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