Ashraf Engineer
May 10, 2025
EPISODE TRANSCRIPT
Hello and welcome to All Indians Matter. I am Ashraf Engineer.
One of the many challenges in the spotlight after the Russian invasion of Ukraine is the quest for rare earth minerals by leading economies. For example, India’s imports of rare earth elements have steadily risen, from 1,848 tons in 2019–20 to 2,270 tons in 2023–24. The bulk of these imports have come from China.
As India reaches for 500 GW of renewable energy capacity by 2030 and a 30% transition to electric mobility, the demand for lithium, cobalt and rare earth elements will surge.
Lithium and rare earth elements are vital for energy storage, particularly in electric vehicles and renewable power systems. They also play a critical role in advanced manufacturing and digital infrastructure. Rare earth elements are essential for the permanent magnets used in wind turbines and for high-tech applications in electronics and defence. In healthcare, rare earth elements are used in medical imaging technologies like MRI machines, while lithium batteries power life-saving devices, such as pacemakers. The growing demand for rare earths and lithium has driven exploration, mining and international trade. These elements now have strategic significance and nations are focused on securing stable supply chains. India is no exception.
SIGNATURE TUNE
What are rare earths? They are a group of 17 elements, including 15 metals called lanthanides or lanthanoids, plus scandium and yttrium.
They are used in a range of products, from consumer electronics to oil refining and missiles to radar systems. They are necessary components of mobile phones, hard drives, flat-screen monitors and televisions. Among the defence applications are guidance systems, lasers and sonar. In many cases the amount of rare earths used are minimal but the device cannot function without them. For example, voice coils of laptops would not work without magnets made of such metals. Lanthanum, used in camera lenses, and cerium, used in catalytic converters, are among the most common rare earths.
China accounts for 60% of global mine production and 90% of processed and permanent magnet output. This presents a challenge for countries like India, who do not wish to be dependent on Beijing for such strategic supplies.
Although these elements are called rare earths, it’s not that they are uncommon. However, they are spread thin around the Earth’s crust in small quantities and mixed with other minerals. That makes them tough to find and costly to extract.
There are serious environmental concerns around them too. Processing them requires solvents that produce toxic waste that pollutes the soil, water and atmosphere. Certain ores also contain radioactive thorium or uranium, which are removed using acid.
India’s track record on sourcing rare earths within its boundaries has been patchy. Lithium reserves were found in Jammu and Kashmir and were estimated at 5.9 million tons. It seemed that India had struck gold and would be free of reliance on China. It felt like an inflection point.
A year later, it seems that it may not be profitable to extract the lithium and perhaps only a fraction of it might be usable. Also, the surroundings are environmentally sensitive.
China, meanwhile, has kept its production and exports steady. It has built a profitable and well managed industrial ecosystem, from mining to refining and battery production. It now controls 90% of the globe’s rare earth refining capacity. It mines the elements and creates finished products in a way no one else can.
As things stand, China’s production capacity is more than it needs. So, it has to sell the excess production to other countries, including India.
So, India’s leading battery companies are not waiting for local production anymore. They are securing long-term lithium supplies now. They can’t afford to wait.
India has lithium but isn’t mining it. It has rare earths, but isn’t refining them. India talks about reducing dependence on China but imports from it are rising.
It would seem that China doesn’t just have the minerals, it knows what to do with them.
The Indian government has responded with a series of policy measures. A FICCI report released in February, titled ‘Recovery of Critical Minerals from Mine Tailings and Overburden’, highlights the measures and investments. They include allowing private sector participation in mining and expediting mineral block auctions.
In November 2023, 24 mineral blocks were auctioned. Royalty rates for minerals such as beryllium, cobalt and titanium were rationalised and limits for prospecting and mining leases were expanded. There is also encouragement for foreign direct investment in small-scale mining through a cost-sharing mechanism.
Meanwhile, the state-run Khanij Bidesh India Ltd, or KABIL, is working to secure critical mineral supplies through global partnerships. It has started lithium exploration in Argentina’s Fiambalá region and has agreements with companies in the UAE, ONGC Videsh and Oil India for international mining opportunities. It has also partnered with the Council of Scientific and Industrial Research-Institute of Minerals and Materials Technology for technical cooperation in processing and extraction.
The National Critical Mineral Mission launched in January 2025, with an outlay of Rs 34,300 crore, includes investments from the Centre, public sector enterprises and private players. The last Budget, in fact, identified mining as one of six priority sectors for transformative reforms.
Among the challenges before the critical minerals industry are:
Limited reserves: India lacks proven reserves for minerals such as cobalt, niobium, germanium and rhenium. Nearly half of the 49 critical mineral blocks up for auction remain unclaimed.
Extraction barriers: While lithium resources have been identified in Jammu and Kashmir, technical limitations make extraction difficult.
Mine development: Land acquisition, resettlement and long project timelines are obstacles.
Lack of advanced processing facilities: There is an absence of commercial-scale processing technology.
Lack of a skilled workforce: The Centre has allocated Rs 100 crore for skill development.
Among the global partnerships India has established is the one with the US – a ‘strategic mineral recovery’ initiative. It aims to recover and process critical minerals and rare earths from heavy industries like aluminium, coal mining, and oil and gas. If successful, it will accelerate research and development, and investment across the entire critical mineral value chain. India and the US are also members of a Mineral Security Partnership, or MSP.
Critical minerals are a crucial part of the India-US bilateral partnership. In October 2024, a memorandum of understanding was signed by the two countries on critical minerals supply chains. Even before that, in a joint statement in June 2023, India and the US committed to working together to ensure access to the minerals and to make their supply chains resilient.
The MSP is particularly important for the shift towards electric vehicles. It considered collaborations on roughly 150 projects, eventually identifying a dozen, including a forum for sharing of expertise, developing battery materials and jointly developing a minerals processing facility in South America. The MSP grouping is focused on the supply chains of minerals such as cobalt, nickel, lithium and rare earth minerals.
This is all positive news but the key lies in the implementation. Securing the future necessitates securing the technologies needed to create it. These initiatives need critical inputs like rare earths. That will mean not just strong global partnerships but also tackling the significant obstacles to their extraction at home.
Thank you all for listening. Please visit allindiansmatter.in for more columns and audio podcasts. You can follow me on Twitter at @AshrafEngineer and @AllIndiansCount. Search for the All Indians Matter page on Facebook. On Instagram, the handle is @AllIndiansMatter. Email me at editor@allindiansmatter.in. Catch you again soon.
