Editorial: Positive step, though belated
After the policy push, focus on auction efficiency, investor confidence, and infrastructure will be crucial in the National Critical Minerals Mission
Despite being endowed with the world’s fifth-largest reserves of Rare Earth Elements (REEs), the strategic resource for the 21st century, India has done precious little to unlock this potential. For decades, it exported monazite beach sands, let other countries do the hard refining and then imported finished rare earth magnets at ten times the price. With this, India has been left behind in the race for geopolitical dominance in rare earths integral to modern living, with applications ranging from smartphones, missiles and MRI scanners to electric cars, defence equipment and LED lights. At present, China has a near-total monopoly over their production and processing, giving it significant leverage in global trade and technological competition. This dominance is used as a bargaining tool, with Beijing imposing export controls to retaliate against tariffs and influence trade negotiations, while other nations strive to diversify their supply chains and develop domestic capabilities. Against this backdrop, the Union Cabinet’s recent approval for a Rs 7,280 crore production-linked incentive scheme to manufacture high-performance rare earth permanent magnets must be seen as a positive step in the efforts to achieve self-reliance in the sector. However, this may have come a bit late in the day. State-owned Indian Rare Earths Limited alone cannot be expected to leverage resources. Rare Earths’ power cannot be built by just a government-owned company. Earlier in January, the Centre had launched the National Critical Minerals Mission, with plans for large investments and regulatory reforms for REEs crucial to position India as a meaningful player in this strategically vital and fast-evolving sector.
Now, the challenge before the country is to convert the ambition into a time-bound, technically credible and internationally partnered modus operandi. China’s imposition of export controls on seven rare earths and related magnets in April this year sent shock waves through the globe. India’s Electric Vehicle industry, which is overwhelmingly dependent on Chinese suppliers for magnets, saw an immediate hit. Currently, India remains 100% import-dependent for most critical minerals, including lithium, nickel, cobalt and germanium. Import of copper, also a key input for the high-tech industry, has skyrocketed in recent years, with domestic production declining. On average, it takes over 16 years to develop lithium mines from the discovery stage to the first production. The experts say that while the policy push might have started creating an enabling environment, further focus on auction efficiency, investor confidence, and infrastructure will be crucial. The REEs are found in abundance in the Earth’s crust. However, they are rarely found in concentrations that are economically viable for mining. As a result, extracting and processing them is complex and expensive, requiring high-end techniques and specialised labour to isolate and purify them. China produces 2.70 lakh metric tonnes of REEs annually. Despite having large reserves of REEs—estimated at 6.9 million metric tonnes — India produces less than 1% of the total world share.
