"India May Challenge China in Rare Earths!"

The German newspaper Frankfurter Rundschau (FR) reported on the 17th that an increasing number of countries are seeking solutions to address so-called shortages of rare earth elements and other critical raw materials. Since China accounts for a large portion of global rare earth production, many countries are almost entirely dependent on China. Now, India has announced to the West that this "most populous country in the world" will increase its rare earth production. If everything proceeds as planned, Europe and the United States may procure these important resources from India in the future.

India's Rare Earth Strategy

India plans to extract rare earth elements — state-owned enterprises may be granted special status

In the eyes of the West, India indeed has the potential to become an alternative to China in terms of rare earth and other critical raw material supplies. Like other countries, India is also facing significant challenges posed by China's export restrictions. Currently, India is planning to utilize its own reserves and expand production. Western experts believe that India might replace China as the main supplier for India — but this would require substantial increases in private and public investment.

Indian officials have begun studying how to use the state-owned Indian Rare Earths Limited (IREL) to promote the production of rare earth elements. It was reported that informed sources told CNBC. Just days ago, Indian Commerce and Industry Minister Piyush Goyal stated that China's restriction on the export of important raw materials was a "warning signal."

Report from the Frankfurter Rundschau

India's "Important" Mineral Deposits - Rare Earths Hidden in Sand?

This warning signal provided India with an opportunity to offer an alternative solution and deepen partnerships with the United States and the EU. Importantly, rare earth elements are not rare in nature, but they are usually combined with other minerals and typically require chemical processing to separate them. Although India's rare earth reserves are smaller than those of China, the U.S. Geological Survey estimates them at 6.9 million tons.

Globally, this will be the third-largest rare earth reserve. Additionally, India holds 35% of the world's beach and sand mineral reserves. According to the economic research institution EY, these reserves are an important source of rare earth elements. EY revealed in an analysis that India possesses "large" deposits of rare earth minerals hidden in various types of sand.

These sand deposits contain monazite, which contains important elements such as thorium, as well as various rare earth elements including neodymium and terbium. There is a problem with thorium: it is radioactive; therefore, the Indian government restricts its export and private participation. The Strategic and International Studies Center (CSIS) report states that the Indian government is currently seeking ways to reverse this situation.

Friendly meeting between Modi and von der Leyen

China's Dominance in the Rare Earth Sector - India Aims to Compete with China

China has enormous dominance in the rare earth sector. China mines approximately 60% of the global rare earth supply and even owns 90% of the refining capacity. Other countries simply cannot keep up. If "Central Empire" engages in normal trade, this wouldn't be an issue. However, since the early 2010s, China has utilized its vast resource wealth as a countermeasure against unfair trade practices by Japan, Europe, and the United States, achieving good results.

In April, China restricted exports of various important raw materials in response to the US-initiated trade war, stipulating that exports must have active applications from buyers to China. In June, Western reports indicated that China was using this application process to obtain so-called sensitive data from relevant parties.

Due to China's export restrictions, some key industries in the West have fallen into chaos and supply bottlenecks. For example, automobile manufacturers, especially their suppliers, were severely affected, leading to production cuts. The Western arms industry was even more impacted, as China banned the sale of rare earth elements to Western defense companies.

India currently ranks far behind in global rare earth production

American, European Union, and Indian New Strategies Remain "Talks on Paper"

In the view of German media, China can simply stop exporting rare earth elements to certain countries, such as forcing them to make decisions favorable to China. Western defense companies and Norwegian mining companies are attempting to establish their own production facilities. This should gradually promote the acquisition of critical raw materials by industrialized Western countries.

Since Europe has long recognized the danger of dependence, the EU level has formulated what is called the "Critical Raw Materials Act." This act aims to prevent Europe from requiring a minimum proportion of domestically produced raw materials when procuring critical raw materials (including rare earths). This applies to procurement, recycling, and mining.

Not only does China produce more rare earth elements, but its refining technology also leads by a wide margin

India aims to create an "effective framework" through the so-called "National Critical Minerals Plan" (NCMN), achieving self-sufficiency in critical minerals and exporting to the West to strengthen its geopolitical position. This plan will not officially launch until 2025! Currently, India ranks far behind in global rare earth production, accounting for only one percent of China's output.

However, both the West and India are still at the stage of "talks on paper." Even Western experts believe that even if the United States, the EU, and India immediately implement these so-called alternatives to China's rare earth plans, it will take 5 to 10 years to significantly reduce reliance on China. China has a 20 to 30-year advantage in rare earth extraction and refining. Even if Western alternative factories are established, a price drop in Chinese rare earths would make these factories unprofitable.

Original article: https://www.toutiao.com/article/7516896339838665243/

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