The reality is that when Magnequench was sold there were only a few years left on the patents. It is common practice in business to sell patents in this manner because it allows the buyer to penetrate and gain market share before the patent expires. This is old technology. While it may have defense applications it is more important for battery powered hand tools. Plus, at the time, and continuing today, there is a huge amount of infringement taking place.
The second piece if misinfo in the article is that the US is totally dependent on China to mine the rare earths. In a few days there will be an companion article published at Sierra Times about how the feds/EPA/BLM shut down Molycorp's Mountain Pass mine, ending the US's ability to produce rare earths. Bull crap. Molycorps settling ponds on BLM land were shut down because of the egregious spill. Those settling ponds, along with Molycorps entire mining and processing operations are now located on Molycorp's private property. As such, San Bernedino county is the lead agency in permitting, not EPA. As such, only an environmental impact assesement, rather than statement is required. Whatever Molycorp wants, the county will give them.
The truth is that Molycorp has no interest in gaining their thirty year permit/restarting operations since rare earth prices are depressed because of a worldwide oversupply.
I must agree that there is some misinformation in this story. Many companies that build Audio speakers, use speakers that employ rare earth elements such as Neodymium (sp) magnets. I have some very expensive speakers that also have Neodymium magnets. I will admit that they make for an extremely strong magnet. I'm sure if this material was as rare as said, that Audio speakers would not be using this material. This story sounds kind of like the Cynthia McKinney story that Bush New the World Trade Centers were going to be blown up. I'm sure with all the transfer of American Industry to other areas of the world has put the American Military in a tight spot if this country were to get involved into a long and treacherous Non Nuclear World War.
With just about all American Textile companies overseas now, the idea of dressing a big military from Home sources might be difficult. Todays outsourced material world, has made for some confusing problems should the countries of the world go into isolation.