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Time of India
09-07-2025
- Business
- Time of India
China's rare earth chokehold may open some doors for India
India appears to be on the verge of a significant industrial transformation, with rare earth elements (REEs) and other critical minerals taking centre stage. The nation's strategic push towards self-reliance, spurred by geopolitical tensions and China's near-monopoly on rare earths, presents a compelling opportunity for investors. The effort aims to leverage India's substantial natural resources to support its growing electric vehicle (EV), renewable energy and defence sectors. The geopolitical crucible The global rare earth market, heavily dominated by China, has come under intense scrutiny due to export restrictions and trade disputes. According to CNBC, China controls an estimated 90% of the global rare earth magnet market. This dominance was highlight in April 2025 when China tightened export licensing for critical REEs like terbium and dysprosium, elements essential to Neodymium-Iron-Boron (NdFeB) magnets used in EV motors, wind turbines and defence systems. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Brought to you by Undo Notably, while China remains the dominant player, its share of global rare earth mining is projected to decline to 51%, and refining to 76% by 2030, as global supply chains diversify, according to a report by CareEdge Global. As Amit Gupta, Executive Group Vice President at Motilal Oswal Private Wealth, told ET Now, the recent geopolitical crises are catalysing the emergence of new sectors in Indian markets. Live Events Also Read: Rare earth, copper mining: What lies in store for India investors? Amit Gupta explains Gupta notes that while India previously stayed away from rare earth mining due to environmental concerns, the global scenario now positions India, home to 8% of the world's rare earth reserves, as a key player. 'Rare earth is coming as that kind of opportunity... the reserves are almost 250 times higher than what is being mined now,' Gupta says. This shift is encouraging countries to diversify rare earth supply chains, creating strategic openings for resource-rich nations like India. India's untapped potential Although China holds the largest REE deposits at 44 million tonnes, India's 6.9 million tonnes give it the third-largest share globally, according to the U.S. Geological Survey. India also possesses about 35% of the world's beach and sand mineral deposits, as per an EY report. These reserves are especially significant for high-performance applications in EVs, electronics, and defence. Gracelin Baskaran, Director of the Critical Minerals Security Program at CSIS, told CNBC that India is "poised to play a key role in building a more diversified global rare earths supply chain." However, despite its endowment, India's output has remained low, just 2,900 tonnes annually from 2012 to 2024, per Statista. CNBC, citing Abhijit Kulkarni of EY Parthenon, attributes this gap to limited refining technologies, insufficient technical expertise, and inadequate mining infrastructure. Baskaran notes that while India cannot displace China, it can certainly serve as a vital alternate source of supply. To address these limitations, CNBC-TV18 reports that the government is exploring partnerships between IREL (India) Ltd. and the private sector, alongside incentives and capital subsidies to enhance domestic mining and processing. Regulatory and institutional challenges India's rare earth resources are primarily found in monazite-rich coastal deposits in Andhra Pradesh, Odisha, Tamil Nadu, Kerala, and West Bengal, with smaller reserves in Jharkhand, Gujarat, and Maharashtra, according to the Financial Express. Despite institutional support from Indian Rare Earths Limited (IREL), the end-to-end value chain, from extraction to magnet manufacturing, remains underdeveloped. The Atomic Energy Act, 1962, which designates monazite as a "prescribed substance" due to its thorium content, reserves mining of these minerals for public sector entities. This legal framework has historically excluded private participation, limiting scaling opportunities. India must now evolve beyond producing REE oxides to manufacturing value-added products like rare earth metals. This requires focused R&D, global collaborations and specialised industrial zones. Strategic global partnerships India is strengthening international collaborations to build more resilient rare earth supply chains, with Australia emerging as a key strategic partner. As the world's fourth-largest producer of rare earth elements (REEs), Australia plays a central role in this effort. Under the India–Australia Critical Minerals Investment Partnership, established through a Memorandum of Understanding (MoU) signed in March 2022 between Khanij Bidesh India Ltd (KABIL) and Australia's Critical Minerals Facilitation Office, India is exploring investments in Australian rare earth projects, according to the Press Information Bureau (PIB). According to a July 9 report by The Economic Times, India is actively in discussions with Australia to secure access to rare earth minerals, amid a global shortage of rare earth magnets triggered by China's tightening of export controls. 'They [India and Australia] are talking about rare earth, and there are blocks available,' said Malini Dutt, Trade and Investment Commissioner for the New South Wales Government in Australia. 'So there is an opportunity for India to take an early-stage block and have tie-ups with a few companies.' In addition, the CSIRO-led India–Australia Critical Minerals Research Partnership, funded through 2026, supports joint research and development across the entire value chain, from exploration and processing to recycling. These initiatives are further reinforced by the broader India–Australia Comprehensive Strategic Partnership and the Quad's minerals cooperation framework. Lessons from Japan Japan's experience following China's 2010 export halt offers valuable insights. The embargo, stemming from a territorial dispute, disrupted Japan's manufacturing sector. In response, Japan invested in Australia's Lynas Rare Earths via the Japan Australia Rare Earths (JARE) joint venture, securing $450 million in funding over the years. This strategic move helped Japan reduce its dependence on Chinese REEs from over 90% to around 58% by 2022, as per Quartz. India can learn from this state-led, targeted approach to supply chain diversification. National Critical Mineral Mission (NCMM) In 2025, India launched the National Critical Mineral Mission (NCMM), according to PIB. The mission aims to bolster self-reliance in critical minerals through exploration, mining, processing, and recycling. The Geological Survey of India (GSI) will conduct 1,200 exploration projects by 2030-31. Efforts include auctions for 100+ mineral blocks, exploration of offshore polymetallic nodules, and relaxed rules to enable mineral recovery from secondary sources like fly ash and red mud. A fast-track approval mechanism and a new Exploration Licence are also being introduced. A Centre of Excellence on Critical Minerals (CECM) is proposed to guide policy and keep the critical minerals list updated. IREL's expanding role IREL (India) Ltd., under the Department of Atomic Energy, holds a near-monopoly on India's REE mining and processing. It achieved a record production of 531,000 tonnes in FY24, as per Outlook Business. The Rare Earth Extraction Plant in Odisha saw a 9.8% increase in chemical output. IREL has begun manufacturing rare earth magnets and metals at its Visakhapatnam and Bhopal facilities. These are being tested by BARC and DMRL, as reported by Financial Express. The company also plans to supply around 500 tonnes of raw materials to OEMs. To diversify supply chains, IREL is scouting for REE resources in Oman, Vietnam, Sri Lanka, and Bangladesh, per Times of India. However, expansion has been hampered by delays in mining permits and environmental clearances, along with CRZ guidelines. Overseas acquisitions Through KABIL, a joint venture of three PSUs, India is acquiring overseas mineral assets. Prime Minister Narendra Modi's visits to Argentina and Brazil, part of the lithium-rich 'Triangle,' underscore this push. Key initiatives: On January 15, 2024, KABIL signed an agreement with Argentina's CAMYEN SE for lithium exploration over 15,703 hectares. In March 2022, KABIL signed an MoU with Australia's Critical Mineral Office. Due diligence is underway for lithium and cobalt projects in Australia. Downstream opportunities While direct mining of radioactive REEs remains a PSU domain, private companies are increasingly eyeing downstream activities like magnet manufacturing. The Mines and Minerals (Development and Regulation) Act, 2023, now permits private exploration of non-radioactive rare earths. According to Economic Times, 13 acreages have already been auctioned. India's domestic rare earth magnet demand surged from 12,400 tonnes in FY21 to nearly 54,000 tonnes in FY25. The market is projected to hit USD 993 million by 2033. To support this, the government is finalising a Rs 3,500–Rs 5,000 crore Production-Linked Incentive (PLI) scheme. An initial Rs 1,000 crore outlay aims to boost domestic magnet production to 1,500 tonnes. Notable private players include: Sona Comstar plans to begin magnet production by end-2025 (ET). Vedanta and Hindustan Zinc are exploring serious entry into this space, driven by demand from EVs and defence sectors (Outlook Business, July 1, 2025). Midwest Advanced Materials Pvt Ltd, Hyderabad, has received Ministry of Science and Technology support for local magnet production (Times of India, June 21, 2025). Challenges and future strategy Despite momentum, challenges remain. Legal restrictions from the Atomic Energy Act, 1962, limit the role of private entities in mining radioactive REEs. Moreover, many of India's reserves are lean and complex to extract. The economics are also challenging, though imports rose 88% to 53,700 tonnes in FY25, their value increased just 5% to Rs 1,744 crore, as per Times of India. Beyond rare earths India's ambition extends to a wider basket of critical minerals. The NCMM identifies 30 critical minerals, including lithium, cobalt and nickel, essential for EV batteries and clean energy. The EV market is projected to hit 6.3 million units by 2027, with wind energy capacity rising from 42 GW to 140 GW by 2030 (ET). According to PIB, India aims to reduce its GDP's emissions intensity by 45% by 2030 (from 2005 levels), achieve 50% electric power capacity from non-fossil sources by 2030, and reach net-zero emissions by 2070.
CNBC
28-06-2025
- Automotive
- CNBC
How China could shut down auto factories around the world
China's dominance of the global supply chain is starting to hurt automakers. On April 4, the country cut off exports of a class of minerals called "heavy rare earth elements," and it sent the global auto industry into a panic. Rare earths are a class of 17 elements that have become indispensable in all kinds of applications — everything from fighter jets and submarines, to smartphones and appliances. You can even find them in sports equipment, like tennis rackets and baseball bats. They are also, of course, essential to the modern automobile. Gas burning cars use them to filter pollution through the vehicle's catalytic converter. Electric vehicles use them in motors and batteries. "Rare earths are really critical, and not just for electric vehicles," said Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies. "They are in your seat belt, your steering wheels, various parts of your electrical components. You are not going to manufacture a car without rare earths." Rare earths are split into further categories, based on their atomic weight. Light rare earths are easier to source. It's the medium and heavy ones that China has totally monopolized. China controls about 70% of the world's rare earth mines. But where it really dominates is in processing. The name "rare earth elements" is a bit misleading — the elements themselves are not that rare in nature. What makes them "rare" is the complex and difficult process of separating them from the rock they are embedded in, and from each other. China controls about 90% of the world's rare earth processing, and has a total monopoly on the processing of heavy rare earths. Since at least 2023, China has been tightening its grip on several of the key critical minerals it provides for the world, Baskaran said. Still, the April 4 export restrictions shocked the automotive world. "It came out of nowhere," said Dan Hearsch, managing director at AlixPartners. "Nobody had any time to react to it. I mean, within a matter of weeks, all of the material in the pipeline was out." European automakers shut down factories. Ford had to idle production of its popular Explorer SUV. This month, China started permitting some access to companies that supply parts to some automakers. And this week the Trump administration said it had reached a deal to expedite rare earth and magnet shipments to the U.S. Still it is unclear how durable these deals will be. "We're not out of the woods yet," Baskaran said. "There is a lot of volatility in the U.S.-China relationship in between tariffs and mineral restrictions. We've seen China ramp up restrictions over two years. Rare earths are just the newest one." There are longer-term solutions if China cuts off access again: recycling, developing other sources and innovation, for example. This crisis may even spur the industry to take action that reduces dependence on China. But this rare earths crisis is just the latest in a series of supply disruptions over the last several years. Hearsch said it will likely get worse. "Today it's rare earths," Hearsch said. "But tomorrow it can and will be something else that maybe we're not thinking about, that maybe isn't even all that valuable and suddenly will be." Watch the video to learn more
India.com
25-06-2025
- Business
- India.com
China is eyeing a treasure in Myanmar that may make it 'Global leader' in..., India can also...
Chinese President Xi Jinping (File) China's rising dependence on Myanmar: Behind the massive growth in China's industrial sector, more specifically in the electronics and communication technology in the last few decades, rare heavy metals have played a very critical role. Although China is the world's top producer of rare earths, it still continues to import massive quantities of rare earth minerals from various countries across the world and one of its biggest import source is Myanmar. Here are all the details you need to know about China's rising dependence on Myanmar. China's rising dependence on Myanmar As per a report by CNBC, Myanmar accounted for about 57% of China's total rare earth imports last year and Beijing has been stepping up controls on rare earth exports in the country. 'Myanmar's production has significantly strengthened China's dominant position, effectively giving Beijing a de facto monopoly over the global heavy rare earths supply chain — and much of the leverage it wields today', Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies, was quoted as saying in a report carried by CNBC. 'This dynamic has given rise to a supply chain in which extraction is concentrated in Myanmar, while downstream processing and value addition are predominantly carried out in China,' Baskaran added. 'If Myanmar were to cease all exports of rare earth feed stocks to China, China would struggle to meet its demand for heavy rare earths in the short term,' said Project Blue's Merriman. India can also take several actions and be a superpower in the critical mineral resources industry. Myanmar military government helping China? The CNBC report also quotes the Chinese Customs data as saying that Myanmar's rare earth exports to China significantly picked up in 2018 and reached a peak of nearly 42,000 metric tons by 2023, indicating a massive rise in imports after the military coup in Myanmar. As a result of the China's massive mineral 'invasion' into Myanmar, there have also been several protests against China and the Military junta.
NBC News
24-06-2025
- Business
- NBC News
How a war-torn Myanmar plays a critical role in China's rare earth dominance
Beijing has been stepping up controls on rare earth exports, triggering global shortages and exposing industries' dependence on Chinese supply chains. However, over recent years, China itself has become reliant on rare earth supplies from an unexpected source: the relatively small and war-torn economy of Myanmar. While China is the world's top producer of rare earths, it still imports raw materials containing the coveted metals from abroad. Myanmar accounted for about 57% of China's total rare earth imports last year, Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies, told CNBC. According to Chinese Customs data, Myanmar's rare earth exports to China significantly picked up in 2018 and reached a peak of nearly 42,000 metric tons by 2023. Baskaran added that the imports from Myanmar are also particularly high in heavy rare earth element contents, which are generally less abundant in the earth's crust, elevating their value and scarcity. 'Myanmar's production has significantly strengthened China's dominant position, effectively giving Beijing a de facto monopoly over the global heavy rare earths supply chain — and much of the leverage it wields today.' The country has become a key source of two highly sought-after heavy rare earths, dysprosium and terbium, that play crucial roles in high-tech manufacturing, including in defense and the military, aerospace and renewables sectors. 'This dynamic has given rise to a supply chain in which extraction is concentrated in Myanmar, while downstream processing and value addition are predominantly carried out in China,' said Baskaran. Why Myanmar? Myanmar is home to deposits that tend to have higher heavy rare earth content, David Merriman, research director at Project Blue, told CNBC. These 'ionic adsorption clay,' or IAC, deposits are exploited through leaching methods that apply chemical reagents to the clay — and that comes with high environmental costs. According to Merriman, the vast majority of the world's IAC operations were in Southern China in the early to mid-2010s. But, as Beijing began implementing new environmental controls and standards in the rare earths industry, many of these projects began to close down. 'Myanmar, particularly the north of the country, was seen as a key region which had similar geology to many of the IAC deposit areas within China,' Merriman said. 'You started to see quite a rapid buildout of new IAC-type mines within Myanmar, essentially replacing the domestic Chinese production. There was a lot of Chinese business involvement in the development of these new IAC projects.' The rare earths extracted by these IAC miners in Myanmar are then shipped to China mostly in the form of 'rare earth oxides' for further processing and refining, Yue Wang, a senior consultant of rare earths at Wood Mackenzie, told CNBC. In 2024, a report from Global Witness, a nonprofit focused on environmental and human rights abuses, said that China had effectively outsourced much of its rare earth extraction to Myanmar 'at a terrible cost to the environment and local communities.' China's rare earth risks China's reliance on Myanmar for rare earths has also opened it up to supply chain risks, experts said. According to Global Witness's research, most of the heavy rare earths from Myanmar originate from the Northern Kachin State, which borders China. However, following Myanmar's violent military coup in 2021, the military junta has struggled to maintain control of the territory amid opposition from the public and armed groups. 'Myanmar is a risky jurisdiction to rely on, given the ongoing civil war. In 2024, the Kachin Independence Army (KIA), a group of armed rebels, seized sites responsible for half the world's heavy rare earths production,' said CSIS' Baskaran. Since the seizure, there have been reports of supply disruptions causing spikes in the prices of some heavy rare earths. According to a Reuters report, the KIA was seeking to use the resources as leverage against Beijing. Chinese customs data shows imports of rare earth oxides from Myanmar fell by over a third in the first five months of the year compared with the same period last year. 'If Myanmar were to cease all exports of rare earth feed stocks to China, China would struggle to meet its demand for heavy rare earths in the short term,' said Project Blue's Merriman. Not surprisingly, Beijing has been looking to diversify its sources of heavy rare earths. According to Merriman, there are IAC deposits in nearby countries, including Malaysia and Laos, where some projects have been set up with Chinese involvement. Still, he notes that environmental standards are expected to be higher in those countries, which will present challenges for rare earth miners. China's decision to cut back on its own extraction of heavy rare earth elements may serve as a warning to other countries about the costs of developing such projects. A report by Chinese media group Caixin in 2022 documented how former IAC operation sites in Southern China had left behind toxic water and contaminated soil, hurting local farmers' livelihoods.
CNBC
24-06-2025
- Business
- CNBC
How a war-torn Myanmar plays a critical role in China's rare earth dominance
Beijing has been stepping up controls on rare earth exports, triggering global shortages and exposing industries' dependence on Chinese supply chains. However, over recent years, China itself has become reliant on rare earth supplies from an unexpected source: the relatively small and war-torn economy of Myanmar. While China is the world's top producer of rare earths, it still imports raw materials containing the coveted metals from abroad. Myanmar accounted for about 57% of China's total rare earth imports last year, Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies, told CNBC. According to Chinese Customs data, Myanmar's rare earth exports to China significantly picked up in 2018 and reached a peak of nearly 42,000 metric tons by 2023. Baskaran added that the imports from Myanmar are also particularly high in heavy rare earth element contents, which are generally less abundant in the earth's crust, elevating their value and scarcity. "Myanmar's production has significantly strengthened China's dominant position, effectively giving Beijing a de facto monopoly over the global heavy rare earths supply chain — and much of the leverage it wields today." The country has become a key source of two highly sought-after heavy rare earths, dysprosium and terbium, that play crucial roles in high-tech manufacturing, including in defense and military, aerospace and renewables sector. "This dynamic has given rise to a supply chain in which extraction is concentrated in Myanmar, while downstream processing and value addition are predominantly carried out in China," said Baskaran. Myanmar is home to deposits that tend to have higher heavy rare earth content, David Merriman, research director at Project Blue, told CNBC. These "ionic adsorption clay" or IAC deposits are exploited through leaching methods that apply chemical reagents to the clay — and that comes with high environmental costs. According to Merriman, the vast majority of the world's IAC operations were in Southern China in the early to mid-2010s. But, as Beijing began implementing new environmental controls and standards in the rare earths industry, a lot of these projects began to close down. "Myanmar, particularly the North of the country, was seen as a key region which had similar geology to many of the IAC deposit areas within China," Merriman said. "You started to see quite a rapid build out of new IAC type mines within Myanmar, essentially replacing the domestic Chinese production. There was a lot of Chinese business involvement in the development of these new IAC projects." The rare earths extracted by these IAC miners in Myanmar are then shipped to China mostly in the form of "rare earth oxides" for further processing and refining, Yue Wang, a senior consultant of rare earths at Wood Mackenzie, told CNBC. In 2024, a report from Global Witness, a nonprofit focused on environmental and human rights abuses, said that China had effectively outsourced much of its rare earth extraction to Myanmar "at a terrible cost to the environment and local communities." China's reliance on Myanmar for rare earths has also opened it up to supply chain risks, experts said. According to Global Witness's research, most of the heavy rare earths from Myanmar originate from the Northern Kachin State, which borders China. However, following Myanmar's violent military coup in 2021, the military junta has struggled to maintain control of the territory amid opposition from the public and armed groups. "Myanmar is a risky jurisdiction to rely on, given the ongoing Civil War. In 2024, the Kachin Independence Army (KIA), a group of armed rebels, seized sites responsible for half the world's heavy rare earths production," said CSIS' Baskaran. Since the seizure, there have been reports of supply disruptions causing spikes in the prices of some heavy rare earths. According a Reuters report, the KIA was seeking to use the resources as leverage against Beijing. Chinese customs data shows, imports of rare earth oxides from Myanmar fell by over a third in the first five months of the year compared to the same period last year. "If Myanmar were to cease all exports of rare earth feed stocks to China, China would struggle to meet its demand for heavy rare earths in the short term," said Project Blue's Merriman. Not surprisingly, Beijing has been looking to diversify its sources of heavy rare earths. According to Merriman, there are IAC deposits in nearby countries, including Malaysia and Laos, where some projects have been set up with Chinese involvement. Still, he notes that environmental standards are expected to be higher in those countries, which will present challenges for rare earth miners. China's decision to cut back on its own extraction of heavy rare earth elements may serve as a warning to other countries about the costs of developing such projects. A report by Chinese media group Caixin in 2022 documented how former IAC operation sites in Southern China had left behind toxic water and contaminated soil, hurting local farmers' livelihoods.
