[Text/Watchman Network Liu Chenghui] Faced with China's rare earth control, India is making frequent moves. The Times of India reported on June 21 that a senior government official disclosed that in order to reduce the serious dependence on Chinese rare earths, the Indian government is preparing a plan to invest 35 billion to 50 billion rupees (approximately RMB 2.9 billion to 4.146 billion yuan) to promote the production of domestic rare earth minerals and magnets, which is expected to be approved within two weeks.
This Indian official said: "The top priority is to start domestic critical mineral production as soon as possible."
However, some Indian media believe that China's advantage in rare earths was not formed by chance but through decades of development. China has nearly monopolized the entire chain from rare earth mining, processing, to downstream applications, making it almost impossible to shake China's dominant position in the short term.
The Times of India pointed out that the incentives in India's proposed plan will be distributed through a reverse auction mechanism. This measure was proposed after an assessment by internal departments, emphasizing the need to diversify supply sources given India's severe reliance on imports from China.
This Indian official said: "We are taking new measures to increase domestic supply of critical minerals." He noted that at least five major Indian companies have informally expressed interest in producing these materials in discussions with government departments.
American CNBC also noticed the signal of India attempting to enhance its autonomy in the rare earth field.
The report stated that like many countries, India is responding to China's restrictions on rare earth element exports and hopes to develop its own domestic supply. Experts said that India may become an important alternative to China in this field, but more public and private investment is needed.
Grace Lin Basakaran, director of the Critical Minerals Security Project at the U.S. think tank CSIS, told CNBC that given India's considerable rare earth reserves, India "is expected to play a key role in building a more diversified global rare earth supply chain."
At the China Brand Expo, China Northern Rare Earth (Group) Hi-Tech Co., Ltd. exhibited various types of rare earth materials, rare earth metals, and rare earth oxides, etc. Visual China.
However, to utilize rare earth reserves, countries need the ability to mine and extract raw materials, as well as the capacity and technology to process and refine them for final use.
This is precisely where India falls short.
Abhijit Kurkarni, a partner at consulting firm EY, said that so far, India lacks advanced separation and refining technologies, especially compared to China, the United States, and Japan. He pointed out that India currently accounts for less than 1% of global rare earth production. He added that India faces other challenges including a lack of technical expertise in rare earth mining and processing, as well as weak infrastructure in mining areas.
According to data from the U.S. Geological Survey, China has the largest rare earth reserves, while India ranks fifth with 6.9 million tons. India also holds approximately 35% of the world's beach and sand mineral deposits, which are major sources of important rare earths. Last year, China accounted for 61% of global rare earth mining and 91% of global refining, while although India has large rare earth reserves, its mining output is very small.
Since this year, India has taken some measures to increase production. In January, the Indian government approved the "National Critical Minerals Mission" plan, investing 163 billion rupees (approximately RMB 13.6 billion) to encourage private sector participation in the exploration and mining of critical minerals.
In March, the Indian government opened up licensing for rare earth exploration to the private sector. India also hopes to participate in building what is called a "resilient and trusted critical minerals supply chain" through platforms like the Quad Security Dialogue.
Reuters cited sources saying that India is negotiating with enterprises to establish long-term inventories of rare earth magnets by providing fiscal incentives. However, the Mint reported that these efforts fall far short.
"Good luck breaking China's rare earth monopoly," wrote Swarajya magazine in an article on June 21. This article poured cold water on India's attempts to reduce its dependence on China.
This article pointed out that China's advantage in rare earths was not formed by chance but through decades of development. China has nearly monopolized the entire chain from rare earth mining, processing, to downstream applications. Specifically, China holds about 40% of the world's rare earth reserves, 60% of production, and nearly 90% of processing capabilities, particularly holding absolute advantages in heavy rare earth separation and neodymium iron boron magnet production.
Countries like the United States have tried to rebuild their domestic supply chains (such as restarting the Mountain Pass Mine), but progress has been slow due to environmental costs, technical barriers, and the integrity of the industrial chain. For example, the United States plans to complete the full chain from mining to magnets by 2027, but its expected capacity is less than 1% of China's.
The article emphasized that the core of the rare earth industry lies not only in resource reserves but also in processing technology and research and development capabilities - China has formed an almost insurmountable competitive barrier through long-term technological investment and economies of scale. Although there are predictions that China's share of rare earth reserves may decrease, its dominance in each link of the industrial chain remains difficult to shake in the short term.
Geologically speaking, China is uniquely endowed with resources, possessing approximately 40% of the world's proven rare earth reserves, estimated at 44 million tons. According to data from the U.S. Geological Survey, India ranks third with approximately 6.9 million tons, behind Brazil.
Philip Andrews-Speed, a senior researcher at Oxford Energy Institute, said: "China has the largest proven reserves in the world, with core reserves located in the north, mainly producing light rare earths, while smaller reserves in the south exist in clay form, containing heavy rare earths, which are rarer in nature. They have made good use of these two advantages."
In the midstream processing stage, although theoretically simple, manufacturing pure oxide forms of each rare earth element is extremely complex and time-consuming because each element must be separated from surrounding materials and chemically similar elements.
After extraction and separation, rare earths need further refining into powders or different forms. Although Japan occupies a place in advanced magnet technology, China also dominates in this area. Andrews-Speed said: "China now easily leads the world in processing technology and output. But unlike critical mineral processing (such as cobalt), China's rare earth refining capability not only relies on imports but also has substantial reserves to support it, giving them a huge advantage."
Developing mining and processing capabilities requires long-term efforts, meaning that other countries will remain at a disadvantage relative to China in the foreseeable future.
The article specifically mentioned that for rare earths, most people, even seasoned industry observers, still view them as simple metals dug out of the ground and sent to factories. This misunderstanding reveals how superficial their understanding of rare earths is.
Rare earth magnets are no exception. Producing the world's strongest industrial magnets is not just about mining minerals; it requires deep research, a strong knowledge ecosystem, and precise engineering at every step. To truly understand why China dominates the global rare earth supply chain, one only needs to look at China's absolute control over neodymium iron boron magnets, which are central to everything from motors to transformers.
China produces more than 90% of the world's neodymium iron boron magnets, and no other country has a fully integrated supply chain for producing them.
Despite this, this has not stopped governments and enterprises outside China from trying to build alternative supply chains, but so far, the results have been limited.
Companies like Japan's TDK rank far behind China in magnet production and rely heavily on China's heavy rare earth raw materials. South Korea's Star Magnetics, Canada's Neo Performance Materials, and Germany's Vacuumschmelze face similar limitations.
"There are very few alternatives to purchasing these magnets outside the Chinese market," said David Merriman of consulting firm Project Blue.
"China's rare earth strategy is more resilient than it appears on the surface," The Times of India reported on May 26, acknowledging the resilience of China's rare earth strategy and rejecting the argument that China's control over rare earth exports would "self-destruct its dominant position."
The article pointed out that China's dominance in the global rare earth and critical minerals sector did not happen by chance but was the result of systematic layout through decades of deep investment, supply chain integration, and strategic acquisitions. Although other countries are attempting to diversify their supply chains to reduce dependence on China, China's industrial scale and technological advantages are unmatched by others. Countries like India need to adopt pragmatic, long-term strategies to address this challenge.
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Original source: https://www.toutiao.com/article/7518607812197499403/
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