Until 1998, there were essentially two active mines in the world producing rare-earths used among other things, for the permanent magnets in JDAM guidance systems– the Molycorp mine in Mountain Pass, Calif., and China's Baotou mine.

The year after Mountain Pass experienced a shutdown in 1998 over environmental issues, China met 88 percent of the world demand for rare earths. A processing facility remains closed at MP subject to resolution of environmental concerns. Millions of dollars were spent on the latter, and deteriorating prices on rare earths, mainly due to Chinese competition were also a key factor in the severe operational cutbacks according to Dr. Stanley Trout, a former consultant to Molycorp.

Last year a spokesperson for the Pentagon told me, "Seventy-five percent of the raw material used to make rare-earth magnets is currently supplied by China. Although other sources and mines exist around the world – including the United States – China remains the most cost-effective source at this time."

It would seem scoring Molycorp would give China effectively complete control of the rare-earth element market.