Rare Earth Minerals: India’s Position, Uses and Significance

China recently suspended exports of these critical minerals to many countries, including India.

Rare earth elements (REEs) are a group of 17 special metals found in nature, divided into two broad groups, namely, light and heavy REEs. These elements include scandium, yttrium, and 15 other metals called lanthanides. They are grouped because they are often found in the same places and act in similar ways. 

Yttrium was the first rare earth element to be discovered, Cerium is the most abundant rare earth element, and Thulium is the rarest naturally occurring rare earth element. These metals have unique properties like being magnetic, conducting electricity well, and glowing under certain conditions.

The name "rare earth" is misleading. These elements are not hard to find in nature. For example, cerium is more common than copper. However, they are called "rare" because:

• They were first found in the 1700s and 1800s from unusual minerals.
• They were very difficult to separate from rocks using old technology.
• Scientists had a hard time telling them apart because they are so similar.
• The name they got in the 1700s is still used today. 

Types of Rare Earth Elements and Their Uses

China's control over rare earth elements was laid in the 1970s when Chinese scientist Xu Guangxian developed the country's first rare earth processing technology. 

Several key factors helped China dominate this sector:
1. Early Strategic Vision: In 1987, Chinese leader Deng Xiaoping famously declared, "The Middle East has oil, China has rare earths". This statement showed China's early understanding of these materials' strategic importance.
2. Cost Advantages: Over 70% of China's rare earth production was initially a no-cost byproduct from a single iron ore mine. This gave China massive cost advantages over other producers.
3. Technology Transfer: Surprisingly, Western companies voluntarily transferred rare earth mining and processing technology to China in the 1980s to reduce their costs and environmental problems.
4. Complete Value Chain Control: China moved beyond just mining to control refining, processing, and manufacturing. Today, China controls 69% of rare earth mine production in 2024, and nearly half of the world’s reserves.

Why China Suspended Rare Earth Exports

China suspended rare earth exports in April 2025 as part of trade tensions with the United States. These restrictions were placed on seven important rare earth metals: samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium because these materials are crucial for defense equipment, electric vehicles, and high-tech electronics. By controlling rare earth supplies, China can pressure other nations in trade negotiations. This has caused serious problems for car manufacturers and technology companies worldwide.

Also read: India's Critical Minerals Roadmap

India has updated its mining laws to focus on critical minerals, including rare earths. The government made several important changes. 

1. Mines and Minerals Development and Regulation (MMDR) Act Amendments:

2021 Amendment:

• Removed restrictions between captive and merchant mines
• Allowed mining companies may sell up to 50% of their production in the open market.
• Made it easier to transfer mining rights between companies.

2023 Amendment:

• Classified rare earth elements as "critical minerals".
• Gave the central government the power to auction rare earth mining rights.
• Created new exploration licenses to attract foreign investment.

2. National Critical Mineral Mission (2025):

• Budget of Rs. 16,300 crore for 2024-2031.
• Plans for 1,200 exploration projects.
• The goal is to achieve self-sufficiency in at least 15 critical minerals.
• Target to acquire 50 mining assets worldwide.

3. Exploration Expansion

The Geological Survey of India increased exploration projects for critical minerals from 118 in 2021-22 to 195 in 2024-25. GSI has been assigned 1,200 exploration projects from 2024-25 to 2030-31.

Key Indian Sites for Rare Earth Mineral Deposits

Also cover this important topic: Current Status of India's Semiconductor Sector

India holds the fifth-largest rare earth reserves globally,  estimated at 6.9 million metric tonnes, though it was only able to produce 2,900 metric tonnes in 2023. Key challenges include:

• State Monopoly and Regulatory Barriers: The rare earth sector in India operates under a state monopoly, with IREL being the primary entity. Monazite, the main source of rare earths in India, is classified as an atomic mineral due to its thorium content, resulting in stringent regulatory controls by the Department of Atomic Energy. This monopolistic control has led to a lack of innovation.
• Slow Process: India can extract rare earth oxides but lacks downstream processing capabilities to create value-added products like permanent magnets. The technology to extract neodymium from rare earth chlorides is currently held by Japan and China
• Import Dependence: India imports an estimated 4,010 metric tonnes of rare earth elements in 2025, which will increase to 8,220 metric tonnes by 2030. More than 95% of imports are from China.
• Regulatory Constraints: Monazite, India's principal source of REE, has been an atomic mineral, limiting private industry participation. Such materials can only be mined and processed by state-owned IREL at present.

Strategic Importance of Rare Earth Elements for India’s Growth 

• National Security Importance: Rare earth elements are important for defense technologies, including guided missiles, radar systems, night vision equipment, and fighter jets.
• Economic Development Driver: India's transition to clean energy and electric vehicles depends heavily on secure rare earth supplies.
• Clean Energy Transition: Rare earths are essential for wind turbines, solar panels, and electric vehicle batteries. India's commitment to net-zero emissions by 2070 requires guaranteed access to these materials.
• Industrial Competitiveness: Access to affordable rare earths determines competitiveness in electronics, automotive, and renewable energy sectors. Dependence on a single supplier creates vulnerabilities and cost pressures.

Cover this important topic here: Reducing Carbon Emissions in India's Industrial Sector

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Rare earth elements pose both a strategic challenge and an opportunity for India. With the world's fifth-largest reserves, India has the potential to reduce dependence on Chinese imports and become a key player in the global rare earth market.

As the world moves toward clean energy and advanced technologies, countries that control rare earth supply chains will have significant strategic advantages. India's efforts to develop domestic capabilities could position it as a reliable alternative to Chinese dominance in this critical sector.

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