China has recently tightened export controls on rare earth technologies and materials, adding more elements to its restricted list amid rising tensions with the US over tariffs. This move has disrupted global supply chains for key technologies like electric vehicles and wind turbines, prompting India to plan a national stockpile of rare earth elements to protect its growing needs in clean energy and manufacturing sectors.
What are rare earth elements and why are they called 'rare'?
- Basic Definition: Rare earth elements are a set of 17 metallic elements from the periodic table, including lanthanum to lutetium, plus scandium and yttrium, known for their high density, conductivity, and ability to withstand heat.
- Why 'Rare' Tag: Even though they are found in good amounts in Earth's crust—like cerium being more common than gold—they are hard to extract in large, pure forms because they are spread out thinly, making mining and processing costly and not always profitable.
- Light vs Heavy Types: They are split into light ones like cerium and lanthanum, which are more common, and heavy ones like terbium and dysprosium, which are scarcer and more valuable for advanced uses.
What makes rare earth elements so important in everyday and advanced technologies?
- Role in Modern Products: These elements are used in tiny amounts but are key for making strong magnets, better alloys, and efficient devices, such as neodymium in phone speakers, car motors, and wind turbines to create powerful magnets.
- Green Energy Applications: They help in clean tech like electric vehicle batteries, solar panels, and energy storage systems, supporting India's goals to cut pollution and shift to renewables.
- Other Uses: In healthcare for MRI machines and cancer treatments, in electronics for screens and lasers, and in defense for guidance systems in missiles and drones.
- Economic Value: Without them, many high-tech industries would slow down, affecting jobs and growth in sectors like auto manufacturing and renewable energy.
Why does China control most of the rare earth supply and how did this happen?
- Historical Background: Starting in the 1980s, China focused on mining and processing rare earths as part of its growth plan, building factories and technology while other countries avoided the dirty and costly process due to pollution concerns.
- Current Dominance: Today, China mines over 60% of global rare earths and processes 90%, giving it power to set prices and control exports, much like oil-producing countries do with oil.
- Strategic Use: China uses this control as a tool in trade disputes, like restricting exports to pressure countries during conflicts, which started with events like curbs on Japan in the 2010s.
How is the current China-US trade war involving rare earths affecting the world?
- Recent Developments: In 2025, China expanded export controls to include more elements and technologies, requiring licenses and rules for foreign companies using Chinese materials, in response to US tariffs.
- US Response: The US threatened 100% tariffs and is exploring its own seabed mining to reduce reliance, while markets like Wall Street saw drops due to fears of higher costs for tech firms.
- Global Impact: This raises prices and causes shortages for industries worldwide, pushing countries to find new sources or recycle more to avoid depending on one supplier.
What is India's position in rare earth elements and why is it vulnerable?
- Domestic Resources: India has good reserves, like 7.23 million tonnes of rare earth oxide in monazite sands along coasts and inland areas, but mining and processing are limited, with only state firms like IREL handling small amounts—over 10,000 tonnes per year capacity, far below China's 200,000 tonnes.
- Import Dependence: India imports nearly all its needs—over 90% for rare earths, 100% for lithium and cobalt—mostly from China, making it open to price hikes and supply cuts that hit EVs, phones, and electronics makers.
- Challenges: High costs, environmental issues, and lack of advanced tech slow down India's efforts, with mining contributing just 2.5% to GDP compared to higher in countries like Australia.
What steps is India taking to become self-reliant in rare earth elements?
- Government Plans: Launching the National Critical Mineral Stockpile for a two-month reserve, backed by ₹500 crore, and a ₹7,300 crore scheme to produce 6,000 tonnes of rare earth magnets in five years with private help.
- Exploration and Auctions: Policies like the 2016 National Mineral Exploration Policy and 2023 amendments encourage private mining; 55 blocks auctioned, 34 allocated, including lithium in Jammu and Kashmir with 5.9 million tonnes inferred resources.
- Company Efforts: IREL is building theme parks in Vizag and Bhopal for processing, while KABIL seeks overseas assets; NMDC is expanding into critical minerals via Australia.
- Recycling Focus: Rules like E-Waste Management 2022 aim to recover minerals from 4 million tonnes of annual e-waste, though only 10% is recycled now, with calls for better facilities.
- Broader Mission: The ₹34,300 crore National Critical Mineral Mission covers exploration to recycling, tying into clean energy targets like 500 GW renewables by 2030.
Why is self-reliance in rare earths crucial for India's future?
- Link to Clean Energy: With EV market growing fast and net-zero goals by 2070, secure supplies prevent delays in shifting to green tech and reduce pollution.
- Economic and Security Benefits: Reduces risks from global tensions, creates jobs in mining and tech, and supports Atmanirbhar Bharat by building local chains for industries.
- Long-Term Strategy: Partnerships with private firms, incentives like subsidies, and R&D will help India compete globally, turning resources into strengths.
© 2025 Gaining Sun. All rights reserved.