Where Would US Rare Earth Industry be If Purchase of China Magnets is Prohibited?

August 14, 2018 John S. McCain National Defense Authorization Act for Fiscal Year 2019 signed into law by the President of the United States, Trump. The new legislation prohibits the U.S. Department of Defense from acquiring Rare Earth Magnets from China. It was said that further risk to the nation’s strategic supply chain’s dependency on China has been reduced by the new law, which prohibits the Department of Defense’s purchase of China magnets used in an array of military applications, from aviation and weapons systems, to supercomputers and satellites.

Rare earth magnets represent a technology of critical importance to the American military. "This is a turning-point in the re-establishment of an independent US rare earth industry," said Jim McKenzie, President and CEO of Ucore. "It is also an important inflection point for rare earth investors".

In the past, some American experts often experts criticized the United States for over-reliance on rare earth of China. It seems that the United States is a barren country of rare earth resources. However, according to an article recently published by Bloomberg Businessweek, as the second largest rare earth reserve country in the world, the United States is second only to China. The US Geological Survey also believed that the deposits of American Rare Earth Co., Ltd. in Idaho, Colorado, and Montana will be one of the five proven large-reserve deposits of rare earth which are outside China or out of control of China.