India’s Potential in Rare Earth Elements (REE) Supply Chain

A recent report by CareEdge highlights India’s significant, yet underexploited, potential to become a key player in the global Rare Earth Elements (REE) supply chain.

Key Points:

• Reserves: India possesses 8% of the world’s rare earth element reserves, positioning it for a crucial role, especially as China’s dominance in the global supply chain is projected to decline.
  • While China currently plays a leading role in both mining and refining, its projected share is expected to decrease from 69 per cent to 51 per cent in mining and from 90 per cent to 76 per cent in refining by 2030, as per the International Energy Agency.
• Production Gap: Despite holding large reserves, India currently contributes less than 1% of global REE mining.
• Government Initiatives: To address this disparity and promote self-reliance, the Indian government launched the National Critical Mineral Mission (NCMM) in 2025.
• Domestic Processing Focus: Indian Rare Earths Limited (IREL), a central government undertaking, is considering reducing REE exports and expanding domestic processing capabilities, partly in response to recent export curbs by China.
• Crucial Role of REEs: REEs are vital for a wide array of modern technologies, including:
  • Clean energy technologies.
  • The automotive industry.
  • Defense systems.
• Challenges:
  • Global Reliance: The global reliance on the existing dominant supply source (China) is expected to persist in the near term.
  • Alternative Supply Chains: Alternative supply chains being developed globally have not yet achieved the scale or consistency needed to significantly displace current sourcing patterns.
  • Refining Hurdles: Refining remains a major challenge, as a substantial amount of REE ore extracted in other countries, including the US, is still shipped to China for processing.
• International Collaboration: There is a growing international effort, including significant investments from entities like the US Department of Defense, to establish more balanced and resilient REE supply chains and reduce dependency on China.

(Source: AIR)