By : Khushi Tyagi

Rare-earth elements (REE) are necessary components of more than 200 products across a wide range of applications, especially high-tech consumer products, such as cellular telephones, computer hard drives, electric and hybrid vehicles, and flat-screen monitors and televisions. According to the International Union of Pure and Applied Chemistry, ‘Rare Earth Metals are a family of 17 elements in the periodic table, which involve 15 Lanthanides group elements, along with Yttrium and Scandium. They were discovered in 18th -19th century, with Yttrium being the first and Promethium the last discovered rare earth element.’ Rare earth materials are utilized in a wide range of critical products enabling many emerging green energy technologies, high tech applications and defense systems. They are used in consumer goods such as smart phones, computer screens and telescopic lenses. They work on clean energy which is the need of the hour today. Traditional uses like Cerium for glass polishing and lanthanum for car catalysts or optical lenses. Rare earth minerals, with names like neodymium, praseodymium and dysprosium, are crucial to the manufacture of magnets used in industries of the future of the 21st century’s need of electric vehicles, wind turbines and Drones.

India is endowed with rich REE reserves. With almost 7 million tonnes of REE reserve, India accounts for more than 5 per cent of global REE reserves, fifth largest in the world. India started efforts to develop domestic REE production capacity in 1950s, when it established the Indian Rare Earth Ltd (IREL) for mining and processing of REE. India has twice the REE reserves of Australia and therefore has great potential to partner with global tech leaders. Nonetheless, in spite of rich reserves and an early start, India has not been able to develop the REE industry and its share in global REE market has remained negligible. Consequently, for years, REE production in India remained stagnant at around 2,000 tonnes before increasing to 4,215 tonnes in 2018-19. Given that China has the largest reserves and was ready to incur the risks associated with the extraction of the REEs, the world, including India, became increasingly dependent on China, especially in the last few decades. As the Government is increasingly giving thrust to campaigns such as ‘Make in India’ and ‘AtmaNirbhar Bharat’, the need to secure critical resources like REEs becomes a paramount need. According to the United States Geological Survey (USGS), the total world reserves of the REEs were estimated to be around 120 MT in 2018. Out of the 120 MT, China alone accounted for the 37% of the global reserves and is followed by Brazil and Vietnam at 18% each. As per the Indian Minerals Yearbook 2020, an annual publication of the Indian Bureau of Mines, which reviews the state of minerals in India, monazite, a beach sand mineral, is the principal source of rare earths like cerium, lanthanum, neodymium, and yttrium in the country. Monazite is radioactive in nature due to the presence of thorium, a radioactive metal used to power nuclear reactors. As per reports India is estimated to have 71 per cent of the world’s total Monazite deposits.

Besides India, monazite is mined in Madagascar as a byproduct of sand minerals and in Western Australia. The private sector is allowed to mine all six types of beach sand minerals except monazite. The mandate to mine REEs in India has been given to Indian Rare Earth Limited, a mini Ratna undertaking of the Government of India under the Department of Atomic Energy and Kerala Minerals and Metals Limited, a Kerala State Government undertaking. Both the companies are actively engaged in mining and processing beach sand. As per the Indian Bureau of Mine, the installed capacity of monazite (96 per cent pure) separation plant of IREL at Manavalakurichi in Tamil Nadu is 6,000 tonnes per year while that of KMML at Chavara in Kerala is 2040 tonnes per year. The Government of India intends to increase the share of manufacturing in India’s GDP to 25% by 2022, up from the present range of 14%-16%. It may also be noted that the share of high-tech exports in India’s total manufactured exports is less than 10%. In order for India to achieve the manufacturing target of 25% in national GDP, the country will have to focus on the domestic manufacturing activity in various industries and this will further be dependent upon securing the availability of various critical minerals. REEs are integrated into multiple industries that contribute to a nation’s economy and security. Some of these elements are considered as strategic minerals because of their use in defense, energy and other strategic sectors.

The usage of rare earths in the manufacturing sector is growing, as also the growth in demand from the existing end-user sectors. Thus, it is important to develop a national strategy with regard to application, consumption, exploration of REEs in the domestic economy, as also its trade and mineral cooperation in the international arena. India should urgently chalk out a clear policy for REE sector with realistic objectives. Monopoly Abolished: India should amend Atomic Mineral Concession Act (2016) which has reserved all beach Sand Mines deposits containing more than 0.75 per cent Monazite (source of REE) for government owned companies. Department for rare earths (DRE) could secure access to REEs of strategic importance by offering viability gap funding to companies to set up facilities in the upstream sector. This could make Indian REOs globally competitive. The DRE will then look at deregulation of this sector and will also promote R&D in the field. Its sole focus will be on ramping up India’s REE production and make India a part of the global supply chain. For this purpose supervision of IREL should also be shifted from the department of atomic energy (DEA) to the DRE, and its primary remit needs to change from atomic minerals to rare earths. There is also a need to look at introducing more players in the value chain and opening it up for investments. While private investments alone may not be able to suffice the upstream processing which require an enormous amount of capital investment and government financing. It is the downstream processes where a public-private approach can help attract investment and purchasers as more efficient processes are put in place. Indian companies may look at opportunities for international collaborations in this space.

The partnership could also be in the areas of joint exploration, and refining, and trading of critical minerals. Exploration should also be strengthened within the country as India is presumed to be having world’s fifth largest reserves of REEs. With such collaborations and local manufacturing, the trade deficit of India could be reduced, especially in the areas such as electronics. Government 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. Finally, it could coordinate with other agencies to partner directly with groupings such as the Quad, building up a strategic reserve as a buffer against global supply crises.


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