Why India Should Become A Rare Earths Powerhouse

Context: India has huge reserves of Rare Earth Elements, but is still dependent on imports.

Rare Earth Elements are a group of 17 elements: scandium, yttrium, lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium and lutetium.

Demand for Rare Earth Elements is on the rise for many critical applications in modern manufacturing, including electric vehicles, renewable energy, and high-tech electronics.

However, India is almost 100% import-dependent for most rare earth elements, despite possessing the fourth-highest reserves of rare earths in the world.

Example of Strategic importance of Rare Earth Minerals

Neodymium is a critical component for permanent magnets. It has the ability to carry material 1,300 times its own weight.  Neodymium-based permanent magnets are key components in EV traction motors and wind turbines.

The demand for neodymium is estimated to rise sharply with the domestic production capacity of India. It is expected to increase 6-7 times by 2025 (6,000 tonnes) and by 18-20 times by 2030 (20,000 tonnes).

The global price of neodymium has risen sharply, from under $100 per kg in 2018 to over $200 per kg at present.

Europium is necessary for LED bulbs and colour television screens.

Samarium is used in optical lasers.

Several rare earths also have important uses in emerging hi-tech medical technologies.

China’s share in global rare earths has reduced to 60%, after aggressive production by US, Australia, and Canada. However, it is still dominant.

Status of Rare Earth Minerals in India

India has greater reserves than the US and Australia in the extractable form in beach sands (of which the country has abundance) and in rock formations known as monazites.

In India, rare earths are classified as atomic minerals because some of these elements occur on the earth’s surface along with radioactive thorium and uranium minerals.

Mining for rare earths is reserved exclusively for government companies. In India, there are only 2 such companies i.e. Indian Rare Earths Ltd (owned by GoI) and Kerala Minerals and Metals Ltd (owned by the Kerala government).

However, their production and technological capacities are limited, thus India has to depend upon imports.

Beach sand mining was banned in 2016 to conserve strategic minerals including rare earth and thorium.

What should be done?

A pragmatic approach to increase production is by allowing mining.

The Ministry of mines has recently proposed moving the 17 rare earth elements outside the ambit of atomic minerals. It will enable the commercial mining of rare earth by private entities and other PSUs.

The issue of the presence of radioactive minerals and their use must be addressed via regulation, then a blanket ban.

Private players can be mandated not to extract thorium and uranium from monazite, or they may be permitted to extract any radioactive minerals, but the sale can be restricted to the government.

Source: This post is created based on the article “Why India Should Become A Rare Earths Powerhouse” published in The Times of India on 27^th June 2022.