INDIA'S RARE EARTHS MISSION - GEOGRAPHY
News: Industry
urges govt. to establish ‘India Rare Earths Mission’ to reduce reliance on
China
What's in the news?
● To
counter India’s reliance on China for imports of critical rare earth minerals,
industry has urged the government to encourage
private sector mining in the sector and diversify sources of supply for
these strategic raw materials.
Key takeaways:
● CII has suggested to set
up an ‘India Rare Earths Mission’, manned by
professionals, like the India Semiconductor Mission and make their exploration
a critical component of the Deep Ocean Mission plan of the government.
● CII
has recommended the public sector firm
Indian Rare Earths Limited (IREL), administered by the Department of Atomic
Energy, should be split into two
entities. While IREL primarily focuses on Thorium mining, the second entity
could pursue other minerals.
● The
industry group has also mooted making rare earth minerals a part of the ‘Make In India’ campaign, citing
China’s ‘Made in China 2025’ initiative that focuses on new materials,
including permanent magnets that are made using rare earth minerals. China
offers state support for the industry.
● Though
India has 6% of the world’s rare earth
reserves, it only produces 1% of global output, and meets most of its
requirements of such minerals from China, the industry grouping pointed out in
a memorandum of suggestions for the Union Budget recently submitted to the
Finance Ministry.
‘Broad-base supply’:
● In 2018-19, for instance,
92% of rare earth metal imports by value and 97% by quantity were sourced from
China.
● The
CII said that there is a need to build domestic capability and broad-base
supply sources for such an important and strategic raw material, making a pitch
for harnessing the potential of the country’s own rare earth reserves.
Rare earths:
● Rare
earth metals are a group of 17 elements
- lanthanum, cerium, praseodymium, neodymium, promethium, samarium,
europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium,
lutetium, scandium, yttrium.
● They
are lustrous silvery-white soft heavy
metals.
● These
metals have unusual fluorescent,
conductive, and magnetic properties, which make them very useful when
alloyed, or mixed, in small quantities with more common metals such as iron.
● However,
with the exception of the highly-unstable prometheum, rare earth elements are
found in relatively high concentrations in the earth's crust.
● The
rare earths occur in many other minerals and are recoverable as by-products
from phosphate rock and from spent uranium leaching.
● REEs are classified as light RE elements (LREE) and heavy RE elements (HREE).
Reserves:
● The
total world reserves are estimated at 121 million tonnes of rare earth oxides
(REO).
● China
alone accounts for 44 million tonnes followed by Brazil and Vietnam (18% each)
and Russia (15%).
● China
holds the leading position among producers of rare earth with 140 thousand
tonnes.
● China accounts for 90% of
the world’s rare earth production.
● The
other major producers are Australia, USA, Russia, Malaysia and Vietnam.
● Concentrates/partially
processed intermediate products are further processed at many locations in
Europe, USA, Japan and China.
Uses of Rare-earths:
● Minerals
like Cobalt, Nickel, and Lithium are required for batteries used in electric vehicles - a clean energy
which is the need of the hour today.
● 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.
● REEs
are an essential component of more than 200 consumer products, including mobile phones, computer hard drives,
electric and hybrid vehicles, semiconductors, flatscreen TVs and monitors, and
high-end electronics.
● Traditional
uses like Cerium for glass polishing
and lanthanum for car catalysts or
optical lenses.
Issues:
1. Difficult to mine:
Although they are more abundant than their name implies, they are difficult and
costly to mine and process cleanly.
2. Monopoly of few:
Most of the reserves being present in few nations causes problems for most of
the world because of the concentration of reserves in the hands of few
countries.
3. Supply Chain:
Forming forward and backward supply chains will create problems when the
reserves are mostly limited to one country.
4. Environmental Impact:
The chief concern is that the rare earth elements are bound up in mineral
deposits with the low-level radioactive element thorium, exposure to which has
been linked to an increased risk of developing lung, pancreatic, and other
cancers.
5. Chinese Dominance:
Amid the transition to green energy, in which rare earth minerals are sure to
play a role, China’s market dominance is enough to sound an alarm in western
capitals.
Rare-earths in India:
● In
India, monazite is the principal
source of rare earths and thorium.
● Rare
earth elements contribute a total value of nearly $200 billion to the Indian
economy.
● India
has the world’s fifth-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 its geopolitical rival, China.
Challenges for India
1. Scaling Up:
The key challenge for India today is to scale up upstream and downstream
processes in the rare earths value chain.
2. Monopoly of Government:
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.
3. Capital-Intensive:
The mining and extraction processes are capital-intensive and consumes large
amounts of energy.
4. Competition from World:
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.
5. Toxic By-products:
The mining releases toxic by-products, an issue that has caused some
controversy in India before.
India's dependence on China:
● Some
REEs are available in India - such as Lanthanum,
Cerium, Neodymium, Praseodymium and Samarium, etc.
● Others
such as Dysprosium, Terbium, and Europium, which are classified as HREEs, are
not available in Indian deposits in extractable quantities.
● Hence,
there is a dependence on countries such as China for HREEs, which is one of the
leading producers of REEs, with an estimated 70 per cent share of the global
production.
● India
is seen as a late mover in attempts to enter the lithium value chain, coming at
a time when EVs are predicted to be a sector ripe for disruption.
● India has an ambitious
plan to convert a large percentage of its transport to electric, and would
require these minerals. According to the plan,
80 percent of the country’s two- and three-wheeler fleet, 40 percent of buses,
and 30 to 70 per cent of cars will be EVs by 2030.
● The
year 2022 is likely to be an inflection point for battery technology - with
several potential improvements to the Li-ion
technology, with alternatives to this tried-and-tested formulation being in
advanced stages of commercialisation.
WAY FORWARD:
1. New Department for Rare Earths (DRE):
● 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.
2. Allow Private Companies:
● 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.
3. Autonomous Regulator:
● 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.
4. Better Coordination:
● The
DRE 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.
5. Encourage Indian Firms:
● While
domestic reforms are awaited, Indian companies can be encouraged to form such
junior exploration businesses in the Indian Ocean Region (IOR) to prospect for
REEs and feed value added products into the Indian market.
If
India is not able to explore and produce these minerals, it will have to depend
on a handful of countries, including China, to power its energy transition
plans to electric vehicles. That will be similar to our dependence on a few
countries for oil.