After a few years of relative quiet, Rare Earth Elements are back in the spotlight.

Initially a target included on a provisional list of tariffs to be imposed on Chinese goods released by the Office of the U.S. Trade Representative (USTR) earlier this summer, Rare Earth metals and their compounds have been excluded from the final list of tariffs announced earlier this week — which speaks to the growing awareness of their strategic importance in the United States.

A provision in the recently-signed John S. McCain National Defense Authorization Act for Fiscal Year 2019 (H.R. 5515) prohibiting the Department of Defense and its contractors from acquiring certain sensitive materials including certain REEs from the likes of Iran, China, Russia, and North Korea provides a recent case in point.

Dylan Kelly, resource analyst with CLSA in Sydney, Australia, says the law “clearly highlighted how exposed the nation was to any kind of disruption to the Chinese supply chain,” and added that U.S. politicians “should be very aware of the corner they have pinned themselves into.”

In the mining sector, the provision struck a cord.  As Curt Freeman, member of the American Resources Policy Network panel of experts, wrote for North of 60 Mining News:

“Underscoring the interconnected nature of the global mining market, not 48 hours after the John S. McCain National Defense Authorization Act was signed into law, the mining industry began wondering out loud how they were going to produce rare earth element, tungsten, tantalum and molybdenum in the near future.”

Against this background, news that a U.S.-based company “has begun ongoing monthly production of recycled lamp phosphors into separated rare earth products” in Nebraska is a welcome one. According to a Roskill report,  Rare Earth Salts (RES) “is expecting to break ground at the end of 2018 on an expansion to increase production capacity to 3,500tpy REO in a staged fashion. It plans to produce other separated rare earth oxides, focussing on neodymium, praseodymium, and dysprosium oxides in partnership with Minera BioLantanidos and Medallion Resources.”

Analysts expect demand for Neodymium and Praesodymium – key components in permanent magnet motors used in EV technology – to increase.  Meanwhile, as Roskill points out:

“For the USA, supplying domestic feedstock is only the first step in securing a supply chain for rare earth permanent magnets, as capacity to produce NdPr metal alloys and neodymium-iron-boron (NdFeB) magnets in the USA is very limited. Unless there is significant investment into downstream NdPr products, it is likely that neodymium and praseodymium compounds produced in the USA would be exported to China, Europe and Japan, where high-quality Nd-Pr alloy and NdFeB magnet capacity already exists.”

The long-awaited yet once again delayed defense industrial base study — findings of which are expected to focus heavily on China’s attempts to buy up or infiltrate key defense technologies showing that “rare earth minerals are particularly at risk” — will only underscore the urgency of the situation.