Rare Earth Elements: Status, Applications & India's Position

Table of contents

“In the modern technological arms race, control over critical minerals is the new oil diplomacy.” This statement reflects the strategic importance of rare earth elements (REEs) in global geopolitics.
Recently, China imposed export restrictions on seven REEs, seen as a calculated response to escalating US-led tariff wars and shifting global alliances. With China supplying 85–95% of the world’s rare earths, the move has raised alarms over supply-chain vulnerabilities, especially in critical sectors like defence, electronics, and green energy.

About Rare Earth Elements (REEs)

REE are a group of 17 chemical elements.
They comprise the 15 lanthanide elements, along with scandium and yttrium.
They are relatively abundant in Earth’s crust.
They are rare because they are found in low concentrations and mixed with other minerals, making them difficult and expensive to extract.
REEs are used to make magnets for electric vehicles (EVs), wind turbines, weapons, etc.
They are used in electric vehicle (EV) motors, medical devices, weaponry, etc.
REEs are divided into Heavy (HREEs) and Light (LREEs).
LREEs are abundant, while HREEs are more critical due to their high demand and low availability.
Among LREEs, neodymium is the most critical as it is extensively used in all mobile phones, medical equipment and electric vehicles.
HREEs (like dysprosium, yttrium, and cerium) are critical for clean energy technologies; however, due to their limited supply, they have a small market.
Misleading Name: REEs are abundant in the Earth’s crust but are rarely found in concentrated, economically viable forms, making extraction challenging.

Application of Rare Earth Element

Electronics: Due to their magnetic and phosphorescent properties, they are essential in smartphones, laptops, flat-panel displays, and headphones.
Clean Energy: Powering high-performance magnets in wind turbines, electric vehicles (EVs), and solar panels is crucial for the renewable transition.
Defence Sector: Used in precision-guided missiles, radar systems, sonar, and jet engines—key to strategic and technological superiority.
Medical Technology: Enable advanced imaging tools in radiation-based cancer treatments, such as MRI and PET scanners.
Industrial Use: Applied in petroleum refining, high-grade glass polishing, and production of strong, corrosion-resistant metal alloys.

India’s Current Position in Rare Earth Elements (REEs)

REE Potential: India holds around 6% of the world’s rare earth reserves, indicating substantial untapped resource potential.
Import Dependency: In FY 2023–24, India imported 2,270 tonnes of REEs, indicating a moderate dependence on external sources.
Light REE Capabilities: India is currently capable of extracting light REEs from monazite-rich beach sands, especially along the coasts of Kerala.
Heavy REE Refining Deficit: India lacks the technological and industrial infrastructure for refining heavy REEs, posing a strategic vulnerability in the critical minerals supply chain.

Factors Behind India’s Limited REE Production

Low Economic Viability: REEs are abundant but their low concentration in extractable forms and high environmental costs make domestic mining unprofitable.
Restrictive Mining Regulations: REEs are classified as atomic minerals, which restricts mining rights to government entities like IREL and KMML and limits private sector innovation.
Lack of Strategic Focus in PSUs: IREL and other PSUs often prioritise more profitable minerals, leading to minimal investment and R&D in REE extraction and processing.
Disjointed R&D Ecosystem: The atomic minerals tag hinders collaboration, isolating REE development from academia-industry partnerships critical for innovation.
Ban on Beach Sand Mining: The 2016 ban on thorium conservation limited access to monazite-rich beach sands, causing supply bottlenecks in light REEs.

China has a monopoly in the REEs-related market.
It accounted for more than 2/3^rd of mined REEs last year.
It constitutes nearly 90% of global refined REE output.
It also dominates the supply of rare-earth magnets.

Impact of China’s Rare Earth Export Restrictions on India

Disruptions in High-Tech Manufacturing: India imported 2,270 tonnes of REEs in FY 2023–24 but remains vulnerable to supply shocks due to its heavy reliance on China and Japan for semiconductors and electronics.
Urgency for Domestic Capacity: With 6% of global REE reserves, India faces strategic pressure to scale domestic mining and refining, especially of heavy REEs, where current capabilities are negligible.
Diversifying Strategic Partnerships: China’s dominance in REE processing has prompted India to collaborate with Australia, the U.S., and Vietnam through initiatives like the India–U.S. Critical Minerals Partnership and QUAD.
Boost to Self-Reliance: The crisis strengthens Atmanirbhar Bharat and Make in India by accelerating REE localisation in EVS, wind turbines, solar panels, and defence manufacturing.
Strengthening Mineral Diplomacy: Geopolitical risks have spurred India’s proactive mineral diplomacy via trade agreements, joint ventures, and global supply chain alliances.

Key Steps to Boost Domestic REE Production in India

Liberalising Mining: The proposed delisting of REEs from “atomic minerals” aims to open the sector to private and PSU participation, boosting scale and innovation.
Focus on Light REEs: India plans to prioritise the extraction of abundant light REEs like lanthanum and cerium from monazite sands.
Dedicated REE Authority: A proposed Department for Rare Earths would streamline policy, investment, and R&D while aligning with global alliances like the Quad.
Public Sector Reform & Industry Push: Splitting IREL into focused entities and incentivising private players would enhance refining and high-tech applications.
Strategic Reserves & Exploration: Establishing REE reserves and a centralised exploration agency (NCMT) would strengthen supply security and coordination.

India holds 6% of global REE reserves, yet its potential remains underutilised. Strategic reforms, enhanced refining, and private sector involvement are essential. Focusing on mineral diplomacy and domestic capacity will reduce import dependence and strengthen India’s position in the global REE supply chain, supporting self-reliance and national security.

Reference: Indian Express

PMF IAS Pathfinder for Mains – Question 166

Q. India’s dependence on imported Rare Earth Elements presents strategic and economic challenges. Discuss their significance and outline the key limitations in developing a resilient REE ecosystem. (250 Words) (15 Marks)

Approach

Introduction: Begin with the importance of Rare Earth Elements (REEs) for India, highlighting their critical role in technology, green energy, and national security.
Body: Discuss the significance of REEs and outline India’s limitations in developing a resilient REE ecosystem, including import dependency and regulatory barriers.
Conclusion: Conclude with a focused way forward, emphasising strategic reforms, investment in domestic REE production, and diversification of supply sources to reduce vulnerabilities.