Rare earth metals | US-China Rivalry | India's Position
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China’s dominance in rare earth metals, the key to the future of manufacturing, is posing a major concern for the West.
Many countries including the USA are taking measures to reduce import dependency on China for rare earth minerals.
The rare earth minerals (REM) are a set of 17 metallic elements. These include the 15 lanthanides on the periodic table in addition to scandium and yttrium that show similar physical and chemical properties to the lanthanides.
The REMs have unique catalytic, metallurgical, nuclear, electrical, magnetic, and luminescent properties.
While named ‘rare earth’, they are in fact not that rare and are relatively abundant in the Earth’s crust.
They are called 'rare earth' because earlier it was difficult to extract them from their oxides forms technologically.
They occur in many minerals but typically in low concentrations to be refined in an economical manner.
The strategic importance of REM
Its usage range from daily use (e.g., lighter flints, glass polishing mediums, car alternators) to high-end technology (lasers, magnets, batteries, fiber-optic telecommunication cables).
Even futuristic technologies need these REMs (For example high-temperature superconductivity, safe storage and transport of hydrogen for a post-hydrocarbon economy, environmental global warming, and energy efficiency issues).
Due to their unique magnetic, luminescent, and electrochemical properties, they help in technologies perform with reduced weight, reduced emissions, and energy consumption; therefore give them greater efficiency, performance, miniaturization, speed, durability, and thermal stability.
China has over time acquired global domination of rare earth, even at one point, it produced 90% of the rare earth the world needs.
Today, however, it has come down to 60%, and the remaining is produced by other countries, including the Quad (Australia, India, Japan, and the United States).
Since 2010, when China curbed shipments of Rare Earths to Japan, the US, and Europe, production units have come up in Australia, and the US along with smaller units in Asia, Africa, and Latin America.
Even so, the dominant share of processed Rare Earths lies with China.
Heavy dependence on China (India and the World):
India has the world’s 5th largest reserves of rare earth elements, nearly twice as much as Australia, but it imports most of its rare earth needs in finished form from China.
In 2019, the US imported 80% of its rare earth minerals from China while the European Union gets 98% of its supply from China.
Some of the actions taken by countries to tackle this situation
The US Senate passed a law recently aimed at improving American competitiveness that includes provisions to improve the critical minerals supply chain.
The US also aims to boost production and processing of rare earth and lithium, another key mineral component while “working with allies to increase sustainable global supply and reduce reliance on competitors”
Exploration in India has been conducted by the Bureau of Mines and the Department of Atomic Energy.
Mining and processing have been performed by some minor private players in the past but are today concentrated in the hands of IREL (India) Limited (formerly Indian Rare Earths Limited), a Public Sector Undertaking under the Department of Atomic Energy.
India has granted government corporations such as IREL a monopoly over the primary mineral that contains REEs: monazite beach sand, found in many coastal states.
IREL produces rare earth oxides (low-cost, low-reward “upstream processes”), selling these to foreign firms that extract the metals and manufacture end products (high-cost, high-reward “downstream processes”) elsewhere.
IREL’s focus is to provide thorium — extracted from monazite — to the Department of Atomic Energy.
The way forward - India:
India must open its rare earth sector up to competition and innovation, and attract the large amounts of capital needed to set up facilities to compete with, and supply to, the world.
The best move forward might be to create a new Department for Rare Earths (DRE) under the Ministry of Petroleum & Natural Gas, drawing on its exploration, exploitation, refining, and regulation capabilities.
This DRE should oversee policy formulation and focus on attracting investment and promoting R&D, with its first move being to allow private sector companies to process beach sand minerals within appropriate environmental safeguards.
It should also create an autonomous regulator, the Rare Earths Regulatory Authority of India (RRAI), to resolve disputes between companies in this space and check compliance.
