Context:
- Amid China’s export restrictions on rare earth elements (REEs), India has taken a major policy step to reduce strategic dependence.
- The Union Cabinet approved a ₹7,280-crore scheme to promote domestic manufacturing of Rare Earth Permanent Magnets (REPMs), critical for clean energy, mobility, electronics, and defence.
- The issue has strong linkages with economic security, technology sovereignty, and geopolitics.
Key Highlights:
Government Initiative & Policy Push
- Approval of ₹7,280-crore scheme for domestic REPM manufacturing.
- Launch of the National Critical Mineral Mission (NCMM) in January, with:
- ₹16,300 crore initial allocation
- Total outlay of ₹34,300 crore over seven years
- Focus on exploration, processing, refining, and recycling of critical minerals including REEs, lithium, and cobalt.
China’s Dominance & Export Controls
- China controls:
- ~70% of global REE production
- ~90% of REE processing and refining
- Holds only ~30% of global REE reserves, yet dominates due to early investment and scale.
- In April, China imposed export restrictions on seven rare earth elements and finished magnets, impacting sectors such as automobiles and EVs.
- Similar restrictions in 2009 led to a WTO dispute, underlining REEs as tools of geoeconomic leverage.
India’s Resource Base & Import Dependence
- India holds about 8% of global REE reserves, mainly in monazite sands located in:
- Andhra Pradesh, Odisha, Tamil Nadu, Kerala
- Despite this, India contributes less than 1% of global REE production.
- Imported over 53,000 metric tonnes of REE magnets in FY 2024–25, highlighting deep import dependence.
Strategic Importance of REEs
- Essential for electric vehicles, wind turbines, solar energy, electronics, semiconductors, and defence systems.
- Neodymium-based magnets are critical for high-efficiency motors and generators.
Relevant Prelims Points:
- Issue: India’s strategic vulnerability due to REE import dependence.
- Causes:
- China’s near-monopoly in REE processing.
- Underdeveloped domestic refining and magnet manufacturing.
- Key Facts:
- REEs: 17 metallic elements with unique magnetic and catalytic properties.
- India’s reserves: ~8% of global total.
- China’s processing share: ~90%.
- Government Initiatives:
- REPM Manufacturing Scheme (₹7,280 crore).
- National Critical Mineral Mission.
- Impact:
- Enhances Make in India, supply chain resilience, and clean energy transition.
- Challenges:
- High capital costs, technology gaps, and environmental concerns.
Relevant Mains Points:
- Key Concepts:
- Rare Earth Elements, Rare Earth Permanent Magnets, Monazite Sands, Critical Minerals.
- Economic & Strategic Dimensions:
- REEs are central to industrial competitiveness and national security.
- Dependence on a single supplier exposes India to geopolitical coercion.
- Technological Challenges:
- Lack of refining infrastructure, skilled manpower, and R&D capacity.
- Complex separation processes and radioactive by-products (thorium).
- Environmental & Governance Issues:
- Need to balance mining with environmental safeguards.
- Bureaucratic delays in environmental clearances.
- Way Forward:
- Invest in processing and refining capabilities, not just mining.
- Promote public–private partnerships, global technology collaboration.
- Scale up REE recycling from electronic waste.
- Streamline regulations while ensuring environmental safety.
UPSC Relevance (GS-wise):
- GS 3: Economy, Science & Technology, Industrial Policy, Resource Security
- GS 2: International Relations, Strategic Autonomy
- Prelims: REEs, Critical Minerals, National Missions