Rare-earth crunch: India's quest for critical minerals must race the clock

Mint

3 hours ago

Aditya Sinha , Aatman Shah Our EV makers face a rare-earth magnet scarcity while the country faces a steep challenge in securing local supplies of various rarely found critical minerals. But a Quad-led effort could forge a realistic action plan to create a supply chain independent of China. India should advocate a partnership within the Quad, anchored by an Indo-Pacific Rare Earth Processing Hub in India.
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Globally, critical mineral development is marked by long gestation cycles, taking 15–25 years from discovery to production, given the inherently uncertain nature of exploration and hurdles at multiple stages of mine development. Australia's Olympic Dam project took 13 years and Mongolia's Oyu Tolgoi took 20 years.
Globally, critical mineral development is marked by long gestation cycles, taking 15–25 years from discovery to production, given the inherently uncertain nature of exploration and hurdles at multiple stages of mine development. Australia's Olympic Dam project took 13 years and Mongolia's Oyu Tolgoi took 20 years.
Even in the US, the Thacker Pass lithium project was delayed by about a decade as it faced environmental litigation. These delays reflect universal geological, regulatory, social and financial constraints.
India's critical mineral strategy faces added hurdles from legacy inefficiencies, under-resourced exploration and fragmented institutional coordination. Geologically rich areas like Bastar Craton and Karbi Anglong are yet to move beyond early-stage exploration. The Geological Survey of India has historically focused on bulk commodities, resulting in inadequate pre-auction data on rare minerals under the post-2015 regime. Our lack of fully validated reserves tends to deter private sector participation. Infrastructure gaps, tribal rights issues and delayed clearances further slow progress.
Also, India faces steep technical barriers in downstream processing. Rare earth separation requires up to 180 solvent extraction steps, demanding precision in chemical parameters and contamination control. Australia, while mining over half the world's lithium, processes only a fraction domestically and relies heavily on China. Indonesia's efforts to process nickel through 'high-pressure acid leach' (HPAL) plants have been marred by shutdowns, cost overruns and corrosion-related technical failures.
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India suffers from five critical deficits.
First, process R&D infrastructure is minimal, with pilot-scale capability available only with a handful of government labs like CSIR-NML and BARC.
Second, India lacks commercial-scale plants for key processing methods like 'solvent extraction-electrowinning' (SX-EW) or HPAL that are essential for extracting materials like copper, lithium or nickel from complex ores.
Third, Indian facilities don't offer the ultra-high purity needed for battery-grade lithium or rare-earth magnets.
Fourth, our hazardous waste handling is inadequate; the processing of some rare earths generates radioactive tailings and acidic sludge that require advanced containment systems.
Finally, India lacks digitized continuous process control systems that are essential for safe, consistent and scalable refining. Without addressing these gaps, India won't be able to capture value beyond raw extraction (whenever mining starts).
Also Read: China risks overplaying its hand by curbing rare earth exports
Fortunately, there have been a slew of reforms lately. The Mines and Minerals (Development and Regulation) Amendment Act of 2023, for instance, empowers the Centre to exclusively auction mineral concessions for 24 critical minerals. It also removes six minerals from the restrictive list of atomic minerals, thereby opening them up to the private sector.
The Act also introduces a new category of exploration licences through reverse bidding, allowing private and foreign firms to undertake reconnaissance and prospecting for deep-seated, high-value critical minerals. Aimed at attracting foreign investment and explorers with advanced technology and risk capital, the regime was launched in March 2025, with auctions for 13 blocks across eight states.
The government also aims to introduce viability gap funding, ease regulatory norms and fast-track rare-earth mine auctions. The aim is to capture 10% of global rare-earth processing capacity supported by incentives under the National Critical Mineral Mission (NCMM) 2025 and a proposed ₹ 1,500 crore recycling incentive scheme.
While state-run firms are being mobilized, the real thrust must come from private participation. Magnet imports doubled in 2024-25 and tightening Chinese export controls have added to the urgency.
But this is too little too late. While China has mastered the entire value chain, India has not even scratched the surface. Our processing technology is primitive and concentrated in a single state-owned company, Indian Rare Earths Ltd. Recent reforms cannot compensate for decades of lost time, inadequate research and strategic inertia. By the time we catch up, the geopolitical window may shut. Without speed and global alignment, current efforts risk being symbolic.
India should advocate a partnership within the Quad, anchored by an Indo-Pacific Rare Earth Processing Hub in India. Each member can offer a unique strength: Australia has raw materials, Japan has technology and India could do the processing, while the US invests and generates demand.
Under the NCMM 2025, a research stream led by the Anusandhan National Research Foundation should drive innovation across the value chain. This would include scaling advanced extraction methods like bio-leaching and solvent extraction, developing capabilities for rare earth separation and ultra-high-purity fabrication, and building digital infrastructure.
Further, while restricting exports to promote downstream industries is a valid strategy, it should be pursued only after India has developed adequate processing capacity. At the same time, the planning and construction of processing facilities must begin in parallel with mining and exploration, rather than waiting for their completion.
Even these efforts would barely scratch the surface. What India needs are radical, time-bound disruptions.
The authors are public policy professionals. Topics You May Be Interested In