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.