India Moves to Tap Its Rare Earth Reserves as an Alternative to China

India is seeking to develop its rare earth reserves as a response to China’s export restrictions. Experts believe that increasing domestic supply capabilities could position India as an alternative supplier, particularly to partners like the U.S. However, significant investment and development are needed to overcome existing challenges in the sector.

India is strategically moving to tap into its own rare earth reserves in response to China’s export restrictions. This comes amid a global shortage impacting various auto manufacturers in India and abroad, with countries like the U.S., Japan, and Germany feeling the pinch. Officials say leveraging India Rare Earths, a state-owned company, could be key to boosting production of rare earth magnets.

Recent comments from Union Minister of Commerce and Industry Piyush Goyal describe China’s ongoing ban as a “wake-up call” that offers India a chance to provide an alternative supplier. Experts believe if India can ramp up its domestic capabilities, it could emerge as an essential partner for countries like the United States in the rare earth supply chain race.

China has maintained a stronghold over the market, producing around 60% of the world’s rare earths and processing a staggering 90% of the total, including imports. Although there have been recent signals from Beijing to ease controls, the restrictions have highlighted the significant leverage China holds in providing minerals critical for technology, renewable energy, and defense applications.

Notably, while China tops the charts with 44 million tons in reserves, India is not far behind with 6.9 million tons, ranking third according to the U.S. Geological Survey. Additionally, India controls nearly 35% of global beach and sand mineral deposits, integral sources for rare earth production. Gracelin Baskaran from the Center for Strategic and International Studies emphasizes that India is well-positioned to diversify the global supply chain.

Nevertheless, to effectively utilize these reserves, India needs to enhance its mining capabilities and processes. Established in 1950, Indian Rare Earths could partner with countries like the U.S., freeing itself from Chinese investments, which may bolster India’s rare earths journey. The government’s National Critical Mineral Mission aims to secure self-sufficiency against restrictive global supply chains.

Experts highlight the challenges ahead, noting significant investment from both public and private sectors is necessary for rapid development in rare earth research and techniques. The Indian government is reportedly considering partnerships with the private sector for a quicker boost in capacity, including plans for incentive programs and financial support for local mines.

“India will not be able to replace China in the market, but it can certainly provide a new rare earth source,” Baskaran notes. Meanwhile, Goyal states that Indian firms are hopeful for quick import approvals from China. A delegation from the Indian auto industry is preparing to visit China to facilitate the import of rare earth magnets, as reports suggest they are eager to expedite these critical supplies.

In summary, India’s move to develop its rare earth reserves comes amid significant global market challenges due to China’s restrictions. With a strong potential market presence, India aims to enhance its mining and processing capabilities while securing partnerships that could encourage alternative sources of supply. However, the path ahead will require substantial investment and collaboration from both public and private sectors.

Original Source: www.cnbc.com

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