China’s ban on rare earth processing technology exports has intensified global concerns, especially for India, which holds the world’s third-largest rare earth reserves but contributes less than 1% to global output. Despite policy reforms and growing private interest, India still lacks advanced refining infrastructure. With strategic initiatives like the National Critical Minerals Mission and international partnerships underway, India stands at a critical juncture to transform its rare earth sector and reduce reliance on Chinese imports.
New Delhi (ABC Live): In a strategic move to safeguard its dominance over critical minerals, China—the world’s leading processor of rare earth elements (REEs)—has banned the export of extraction and separation technologies. This escalation in trade controls has raised serious concerns globally, especially for countries like India, which heavily depend on Chinese rare earth processing.
India’s Rare Earth Potential
India ranks third globally with approximately 6.9 million tonnes of rare earth reserves, mainly found in the beach sands of Andhra Pradesh, Odisha, Kerala, and Tamil Nadu. These minerals, including cerium, neodymium, and lanthanum, are essential for electric vehicles, renewable energy, electronics, and defence technologies.
However, despite these vast reserves, India contributes less than 1% to global REE output. This is primarily due to the lack of advanced domestic refining and value-added capabilities. Consequently, the Indian rare earth sector has yet to realize its full potential.
Status of Indian Rare Earth Processing
The Indian rare earth industry is currently government-dominated. Indian Rare Earths Ltd (IREL), operating under the Department of Atomic Energy (DAE), plays a central role in mining monazite and producing mixed rare earth chlorides. Currently, it processes about 10,000 tonnes annually.
Nevertheless, more advanced processing technologies—particularly those used to produce separated oxides and permanent magnets—are still underdeveloped in India. As a result, many semi-processed rare earth materials are exported to nations like Japan for further value addition.
Policy Push and Private Participation
To address these limitations, the Indian government has introduced several reforms and programs:
- The National Critical Minerals Mission (NCMM)
- Amendments to mining laws
- Incentives for private and foreign investment
Furthermore, companies like the Adani Group are entering the rare earth sector. Their plans include mining, refining, oxide production, and even permanent magnet manufacturing. In addition, strategic international collaborations with Japan, Australia, and the United States are underway to facilitate technology transfers and ensure supply chain security.
Processing Technologies in India
Indian rare earth processing currently relies on conventional hydrometallurgical methods such as:
- Alkaline digestion
- Acid leaching
- Solvent extraction (SX)
In parallel, pilot research is ongoing into newer methods like bioleaching, ionic liquids, and chromatographic separation. However, these technologies have yet to transition into full commercial-scale operations.
Challenges Hindering Development
India’s ambitions in rare earths face several systemic challenges:
- Firstly, thorium-rich monazite poses regulatory hurdles due to nuclear restrictions.
- Secondly, there are significant environmental concerns and licensing complexities.
- Moreover, the country lacks midstream processing infrastructure.
- In addition, there is limited private investment and a shortage of skilled technical manpower.
As a result, India imports over 60% of its refined REEs and nearly all of its finished magnets, primarily from China.
Strategic Roadmap Forward
To overcome these challenges and strengthen the Indian rare earth ecosystem, experts recommend the following:
- Expand mining and midstream operations through PPP (public-private partnership) models
- Introduce tax incentives and PLI (Production-Linked Incentives) schemes
- Simplify regulatory approvals, especially those under the DAE and environment ministry
- Boost R&D funding to commercialize new separation technologies
- Develop a trained workforce for REE-specific operations
- Maintain environmental safeguards to ensure sustainable growth
Conclusion
China’s export ban on REE technology has highlighted the fragility of global supply chains. Therefore, it is crucial for India to fast-track its rare earth strategy. With its vast reserves, proactive government policies, and increasing private sector involvement, Indian rare earth development is on the cusp of transformation.
In the long term, a well-integrated domestic value chain could reduce India’s dependency on imports and position it as a reliable and self-reliant player in the global rare earth market.
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