India's strategy to lessen reliance on China for scarce earth minerals
In a bid to address geographic hurdles and advance extraction technologies, the India-Central Asia Rare Earths Forum (ICAREF) aims to establish a regional market for Rare Earth Elements (REEs) for mutual benefit. This move comes as India, like many countries, seeks to diversify its REE imports, particularly from China, which dominates the global market.
China, with its vast reserves and production capacity, accounts for a staggering 64 percent of the global REE export value and 86 percent of the quantity in 2023. India's reliance on China is equally significant, with 81 percent of its REE imports coming from China in 2022. This concentration of supply has created unforeseen geopolitical implications, as disruptions in supply can have a severe impact on the development and deployment of sustainable energy systems.
To counter this, countries can pursue a combination of government-led investments, strategic partnerships, expanded mining and processing capacity outside China, and stockpiling critical materials.
Government funding and policy support play a crucial role. The U.S. Department of Defense, for instance, has invested heavily in domestic REE mining, processing, and separation technologies. Japan, India, and other countries are forming joint ventures and bilateral partnerships to develop mining, refining, and processing outside China.
Australia’s Lynas Rare Earths, the largest producer beyond China, is scaling up mining and downstream processing, including magnet production in Malaysia, to create a more vertically integrated supply chain. Other countries like Brazil and Saudi Arabia are also emerging as alternative suppliers with government support.
Corporations are adopting vertical integration, strategic offtake agreements, and investing in new separation and recycling technologies to improve supply chain control and reduce dependence on Chinese processors. Japan has focused on strategic stockpiling of rare earths to buffer against supply shocks, with targets up to 180 days’ worth of supply for high-risk materials.
Strategic partnerships with Kazakhstan, which boasts rich reserves of 15 out of 17 known REEs, can help India reduce its dependence on China. Kazakhstan has established relationships with major global partners, demonstrating its commitment to reliable REE supply.
The original publication of this content was under Creative Commons by 360infoTM. Saswata Chaudhury, Senior Fellow & Area Convenor, Energy Assessment and Modelling Division, The Energy and Resources Institute, New Delhi, emphasises the importance of these strategies.
In addition, countries can consider recycling REEs from end-of-life products, exploring alternative import sources, and investing in research and development to improve REE utilisation or develop alternatives. Amendments have been made to the Mines and Minerals (Development and Regulation) Act in relation to rare earth elements.
By pursuing these strategies, countries can build diversified and more secure REE supply chains that support energy security and critical technology production, ultimately contributing to a more sustainable and resilient global energy landscape.
- The India-Central Asia Rare Earths Forum (ICAREF) aims to establish a regional market for Rare Earth Elements (REEs), which could support the transition towards clean energy and contribute to the Sustainable Development Goals (SDG).
- As countries seek to reduce their reliance on China for REEs, strategic partnerships, such as those with Kazakhstan, could offer alternative sources for these critical materials and contribute to energy security and industry.
- Financial investments, whether from governments or corporations, play a vital role in developing new REE mining, processing, and separation technologies, enabling the production of clean energy and reducing carbon emissions in the industry.
- Besides diversifying supply sources, countries can also focus on recycling REEs from end-of-life products, exploring alternative import sources, and investing in research and development to improve REE utilisation or develop alternatives for a more resilient and sustainable global energy landscape.
