Rare Earth - Risky Supply Chain - Part 2

Definitions: Both SmCo (samarium cobalt) and NdFeB (neodymium iron boron) were invented in the U.S. plus Alnico (aluminum-nickel cobalt) which exhibit the highest temperature stability and maximum energy product. Produced by either Casting: cast into molds, heat treated and machined to size and magnetized or Powder metallurgy first melted, cast, crushed and milled to the 2-5 micron range, single crystals with a single magnetic domain pressed in a magnetic field, sintered and heat treated. Now you have the reference point.

In the 1980s the American magnet industry reached its peak with approx 6000 people employed in the field. In 1990 worldwide magnet production was 300,000 metric tons with sales of about $2 billion. The U.S. comprised over 50% of the totals. Incidentally there are about 600 American patents connected with this industry, but we all know how the Chinese feel about patents, copyrights, etc.

In the 1990s a dramatic decline of our production was in motion while off-shoring commenced and picked up speed. First just portions, then full lines of magnet production moved to China. Just before the turn of the century Magnequench Co. was sold off from GM to a Chinese-led investment group. Then North Carolina's operations went to Singapore in 2003. Then Elizabethtown, Kentucky's operations were moved to Germany and Slovakia. In 2005 the U.S. rejected a bid to purchase Unocal (not even realizing the danger of selling off these rare earth mines. Finally, Hitachi closed its production facility in EDMORE, MICHIGAN (where was Jennifer?!?!) effectively ending all NdFeB production in the USA!

In 2009 the Australian earth mine closed and today the U.S. magnet industry now employs about 400 people including three Alnico producers, one independent hard ferrite producer, one SmCo producer and no NdFeB producers even though that is the most recent type with worldwide magnet sales topping $9 billion before the recession. The U.S. capacity is a tiny portion of the total.

Molycorp is attempting to re-commence mining in California. The Small Motors Mfg. Assoc. plans to reintroduce a statistics program. Now predominantly importers are from Europe and (mostly) Asia.

As recently as June 2009, Congress took small but significant steps to counter these trends. First the House Armed Services Committee included important provisions in its bill expressing concern at the trends in domestic specialty metals prosecution. It specifically mentioned high performance magnets and dependence of defense systems on foreign sources of NdFeB.

They also commissioned a study by the Government Accountability Office on the effects of such dependence on defense systems. The BIG QUESTION?! WHERE IS CARL LEVIN? How is it the House is so far ahead of the Senate?

So here we are with a national strategic problem where the last firewall was in our home state and neither the Governor nor the Senior Senator were aware of or even cared about it if they heard about it. What the hell were they doing?

It won't be easy, but sleep well--
God bless us all................