The impending global scarcity of Rare Earth Metals (REMs) and efforts made by top countries to counter this shortage forms the core of our discussion. The United States’ recent step to propose a law ending China’s alleged “chokehold” on REMs supply is our starting point.
Unveiling the Proposed US Law
In a bold move to reduce dependence on China, the US has proposed legislation aimed at circumventing China’s influence on rare-earth metal supplies. The bill, which seeks to secure the US from potential disruptions in the supply of these elements, advocates for increased domestic production and reduced reliance on China. It also calls for establishing a “strategic reserve” of rare-earth minerals by 2025, aiming to meet the demand of the army, tech sector, and other crucial infrastructure for a whole year in case of a supply interruption.
The Significance of Rare Earth Metals
Rare Earth Metals consist of a group of seventeen metallic elements. These include fifteen lanthanides and two additional elements, scandium and yttrium, which share similar physical and chemical properties with lanthanides. The seventeen rare earths are cerium (Ce), dysprosium (Dy), erbium (Er), europium (Eu), gadolinium (Gd), holmium (Ho), lanthanum (La), lutetium (Lu), neodymium (Nd), praseodymium (Pr), promethium (Pm), samarium (Sm), scandium (Sc), terbium (Tb), thulium (Tm), ytterbium (Yb), and yttrium (Y).
These elements are critical in many modern technologies due to their distinct magnetic, luminescent, and electrochemical properties. They are used in consumer electronics, computers and networks, communications, healthcare, national defense, and even futuristic technologies such as high-temperature superconductivity and safe hydrogen storage. The term ‘rare earth’ was coined because it was initially challenging to extract these minerals from their oxide forms.
India’s Current Approach to Rare Earths
In India, exploration of REMs has been mainly conducted by the Bureau of Mines and the Department of Atomic Energy. The IREL (India) Limited, a public sector enterprise under the Department of Atomic Energy, handles mining and processing. The Indian government has granted corporations like IREL a monopoly over the primary mineral containing REMs: monazite beach sand, found along many coastal states. IREL mainly focuses on providing thorium, extracted from monazite, to the Department of Atomic Energy.
China’s Dominance in the Rare Earth Market
Over the years, China has established global control over rare earths, at one point producing 90% of the world’s demand. Although this has decreased to about 60% today, the rest is produced by other countries, including the Quad nations (Australia, India, Japan, United States). Since 2010, when China restricted shipments of REMs to Japan, the US, and Europe, production units have sprung up in Australia, the US, and smaller units in Asia, Africa, and Latin America. However, China still holds the lion’s share of processed Rare Earths.
The World’s Dependence on China for REMs
Despite having the fifth-largest reserves of rare-earth elements, India imports most of its needs from China. In 2019, the US imported 80% of its rare-earth minerals from China, while the European Union sourced 98% of its supply from China.
Way Forward for India
India needs to establish a new Department for Rare Earths (DRE), acting as a regulator and enabler for businesses in this sector. Currently, mining and processing are mainly concentrated within IREL (India) Limited. Despite slow growth, its progress and capacity to produce rare earths are nowhere near international REE conglomerates. Encouraging Indian companies to prospect for REEs in the Indian Ocean Region could funnel value-added products into the Indian market. Furthermore, India could coordinate with agencies like the Quad to develop a strategic reserve as a safeguard against global supply crises.
