China Metals for Smart Bombs Prompts U.S. Hearing

April 15 (Bloomberg) -- a government report exposed potential “vulnerabilities” for the American military because of its extensive use of Chinese metals in smart bombs, night-vision goggles and radar.

China controls 97 percent of production of materials known as rare earth oxides, giving it “market power” over the U.S.

We are aware of China’s attempt to monopolize this type of material

The materials -- found in General Dynamics Corp.’s M1A2 Abrams tank and Aegis SPY-1 radar made by Lockheed Martin Corp. -- are so irreplaceable that suppliers to military equipment makers could be buying from China for years to come,

“China is a rapidly rising military and economic power and the fact is that they cornered the market on these rare earth metals that are essential for a lot of our advanced weapons systems as well as a lot of manufacturing in the United States,” Representative Mike Coffman, a Colorado Republican, who asked for the GAO report, said April 14 in an interview on Bloomberg Television. “We need to move aggressively on this issue now before it’s too late.”

A U.S. mine in Mountain Pass, California, owned by Molycorp Minerals LLC, was once the world’s dominant producer. It closed a separation plant in 1998 after regulatory scrutiny of its wastewater line and suspended mining in 2002

“Government and industry officials told us that where rare earth materials are used in defense systems, the materials are responsible for the functionality of the component and would be difficult to replace without losing performance,” the GAO report said.

It cited several specific weapons systems, including the M1A2 Abrams tank, which has a navigation system that uses samarium cobalt magnets with samarium metal from China; neodymium magnets from China in the Hybrid Electric Drive propulsion on the DDG-51 Navy destroyers built by Northrop Grumman Corp. and General Dynamics; and Lockheed Martin’s Aegis SPY-1 radar, also on DDG-51 destroyers, containing samarium cobalt magnets that will need to be replaced during its 35-year lifetime.

Rebuilding a U.S. rare earth supply chain may take up to 15 years

Developing new U.S. sources of the metals may take “enormous investment and time... Time is of the essence because the situation is going to get worse” as China’s domestic consumption of the material rises