It is when we all play safe that we create a world of utmost insecurity– Dag Hammarskjöld, UN Secretary General
By Dr Amit Tripathi and Lt General Rameshwar Roy
Globally private enterprise is the driver of defence industries and materials. Nowhere it is more apparent than that of USA and its NATO allies. NATO has successfully leveraged private enterprise to create diversified supply chains of critical defence materials. On the other hand, India has traditionally closed its doors on private participation in critical metals and nuclear supply chains. It may have been relevant when we got our freedom from ‘British Raj’, when it was believed that private sector did not have enough resources as also for the reasons of national security, we did not want to involve the private players at that time. However, we have come a long way.
The recent announcement by PM Modi comes as a fragrance of fresh breeze in a decaying, unmotivated and stagnant environment of public sector dominance of critical metals and nuclear mineral supply chain in our country. PM Modi has invited the private sector into defence and strategic industries as also nuclear technology, in his speech at CII webinar, June 2020. This must now translate itself into policies and plans for effective and quick implementation of his vision on ground in this fast paced world.
The pathbreaking reforms announced by the PM in his speech has far reaching ramifications in the field of strategic industries and nuclear technology research for private sector. One of the most critical area that needs to be addressed in a time bound manner is, the field of “Rare Earth Elements (REEs)”, which are extremely critical to defence manufacturing facilities including missiles, rockets, fighter planes, guidance systems, visual displays and each and every facet of electronic warfare systems. Samarium-cobalt and neodymium-iron-boron magnets are critical for many defense systems including aircraft engines, radar, sonar, and guidance systems. Tungsten is widely used in defense applications, including armor and armor-piercing munitions. It is significant that such strategic vulnerabilities will always be exploited by our adversaries. At present India is dependent on China for all these critical metals.
if China were to stop selling any of the 18 out of 23 metals the U.S. deems critical to their economy or defense, the U.S. economy would be in serious trouble– National Mining Association (USA)
Private industry had been involved in mining and processing of beach sands, that contain the REEs, from 1998 to 2012. However, presence of nuclear material in the vast beach sands of India has been used as an excuse to shut down all these private industries. Our government organizations and PSUs have their own structural constraints and have proved themselves inept in meeting the supply needs. This has had the unintended consequence of exposing a major strategic flank to Chinese control. Chinese dominance in the critical REE metals have given them a strategic upper hand and may have emboldened the Chinese army to pursue their forward policy, creeping land grab with frequent standoffs. In case of a long drawn confrontation, the Chinese restriction on supplies of some of these critical metals could cause serious disruptions in our Indian defence industries. China has demonstrated its willingness to weaponize REE supplies when it curtailed supplies to Japan during the Senkaku island standoff in 2011. US, Japan and EU confronted China in the WTO over this action and have started a sustained program to diversify REE supply chain.
The Prime Minister’s policy direction, if implemented in its letter and spirit will be a quantum leap for our strategic critical metals security. It would create self sufficiency in these sectors within a short span of two to three years. Mineral Exploration Academy has immediately explored such possibilities and our associates in friendly countries have expressed interest and willingness to immediately start mining – refining – and metallurgy operations to achieve self-sufficiency in critical REE sector at the earliest possible. In fact, if the approvals are accorded in a time bound manner; we could be very soon be having the capacity to export these critical metals to friendly countries that are actively looking to diversify supply chains away from Chinese influence. At the moment, India is the only country having sufficient REE resources to rapidly scale up such an industry. The pace required to affect this growth can be handled by private industry. With capacity and intent demonstration India can rapidly position itself as a major global hub for electric vehicle manufacturing and pitch the REE capability as a USP.
History will judge us by our response at this juncture. The resolute political leadership is now showing the way and the private industry is ready and waiting. Will the government take up the challenge and be an engine of growth for the critical national security at the right time? Or be stuck in the historical maze of procedure-centric governance and relegate India to a Chinese dominance, only time will tell !!
Samarium-cobalt and neodymium-iron-boron magnets are critical for many defense systems including aircraft engines, radar, sonar, and guidance systems. Additionally, tungsten is widely used in defense applications, including armor and armor-piercing munitions. That the U.S. ever came to be reliant upon non-allied countries for the supply of such sensitive components is almost inconceivable, and it’s created significant strategic vulnerabilities that our adversaries surely will exploit when the time comes.Dean G Popps – Real Clear Defense, May 2019
15 thoughts on “Chinese dominance over Rare Earth Elements and India’s critical Dependencies”
Great read like always. Thank you Dr Amit Tripathi and Lt General Rameshwar Roy for your expert perspectives.
Excellent read , it’s a great opportunity, are you guys leading the charge by forming a start-up to support India in this effort?
Trying to move in that direction if the rules allow
The artcile on crtitical material particularly REE elucdates the geo-plitical situation and an excellent read.
But In India situation needs much of ease of doing which is so far not visible. The policy for Rare Earth Exploration imposed by Department of Atomic Energy( Atomic Minerals rules 2016) is very tough. You might be knowing, it has now stipulated threshold concept which is very difficult to meet by the private companies. The demand for Nd Pr is increasing for traction motors used in EVs, but as yet Government is no mood to relax the rules for private companies.
THE artcile on crtitical material particularly REE elucdates the geo-plitical situation. Its an excellent read.
But In India situation needs so much ease of doing which is so far not visible. The policy for beach sand and other Rare Earth Exploration and mining imposed by Department of Atomic Energy( Atomic Minerals rules 2016) is very tough. You might be knowing, it has now stipulated threshold concept. With this dictum rare earth mining in India from beach sand sector by private companies is unachievable.Nd Pr metals are in great demand due to traction motors made of Nd-Fe-B used in EVs. As yet the Government is in no mood to modify rules to allow private companies.
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Excellent thinking. India must follow a rigorous search for REEs through private enterprises. Recently a new area of REE mineralisation is located in SW Rajasthan by Guha et al. 2020 through their paper published in Episodes journal of June 2020 issue. GSI has done G4 stage exploration for this area which is around 700 sq.km. Private parties should also look here to possibilities of resource development through exploration to mining.
.Hi, Dr Amit Tripathi and Lt General Rameshwar Roy. Your Editorial is perfectly timed. Need of the hour. By linking the REE needs of our nation with our PMs clarion call, you have given a wake up call to the Ministry of Mines to open up this Sector quickly to private investments both domestic and overseas. India has the 3rd largest REE Resources and Resource-Potential, not only in its vast Monozite-rich Beach sand Resources but also in its wide spread, already proven, Hard Rock REE Resources(discovered and defined by AMD in parts of Gujarat, Tamil Nadu, Andhra Pradesh, Jharkhand, Chhattisgarh, Rajasthan Kerala & Karnataka). IREL alone can not handle this huge Resource and Resource potential. The only country which can compete with China in REE business is India. The corona Pandemic has already changed the global Business equations. Many countries including the US, Japan and some European Nations will respond very favourably if the Mines Ministry, jointly with DAE, amend the MMDR Act and throw open the hard rock REE sector for intensive Exploration on FCFS basis(FCFS is the international practice, not the thoughtless auction route which has stopped mineral exploration in the country). Concurrently, the Act should allow the existing Beach sand Mining companies and new companies to mine and concentrate *Monozite* and also to set up down stream industries to “crack” Monozite to produce REOs. The down stream Monozite cracking industry can function under the supervision of DAE’s representatives. This way India can quickly (say in a short span of 2 years) make China to sit up and take notice of India’s REE production and supply capability.
For focusing fully on harnessing and harvesting India’s REE supply potential, I suggest the Ministry of Mines to constitute a *REE-Exploration & Mining Authority of India (REMA)* on the lines of the Hydrocarbon and Steel Authority. India has world class Earth Scientists/Geologists specialized in REE Mineral Exploration. There are a number of companies specialised in Heavy Mineral concentration. Some technology know how for cracking Monozite and other REE rich minerals like Xenotime, Bastnaesite, Allanite, etc needs to come in. Opening up of this sector NOW to private investments is the way forward for implementing the expressed VISION of our Prime Minister. Why wait?
Vasudev. Bengaluru. 9.6.2020
Excellent vision with well documented facts. As hard-core geologist I am in opinion that negligible attempts have been made to search/ explore hard rock REE resource in our country except few sporadic occurrences.Mica belt of Giridih -Koderma of Jharkhand should be thoroughly probed for REE as preliminary studies carried out by GOD and perhaps AMD as well have indicated potentiality of the region.
We are in the Beach Mineral field. Before we enter this field, India was 14th Place in production. Within 10 year India become No.1 producer all over the world.
Our government is on research stage only in the usage of Thorium. There is no use for thorium at present. Total four companies including ourselves approached Atomic energy department for permission to produce rare earths , we offer either their officials may be posted in our company to taken back of the Uranium and Thorium at our cost. For the reasons best known to them, they refused the permission to Indian companies, but unfortunately Atomic Energy Department company Indian Rare Earths Limited enter agreement with overseas company Toyoto. Some of the overseas companies who want to control Chinese domination enter agreement with us for supply of Technical know-how for rare earth production. But due to some overseas companies intervention through our competitor in India and through lobbying the corrupt officials in Central government through mediators, till today none of the Indian companies were permitted. But one very big company claim that, they will get permission as well as MOU with government for support exempting from certain statutory regulations within six months or one year. Fighting with government through court is not possible in our country. So even though we can able to produce Rare Earth and feed our Indian requirement, in addition to export of some portion , we were prevented from producing rare earths.
Response to the article by Dr. Amit Tripathi and Lt General Rameshwar Roy in Mineral Exploration Academy.
The article published in connection with the announcement of Prime Minister Modi in his speech at CII webinar, June 2020 inviting the private sector into defense and nuclear mineral supply chain in the country, which has special reference to the Rare Earth Elements (REEs), which are extremely critical to defense manufacturing facilities. It is worthwhile to mention that in addition to defense, the rare earth elements find use in other applications like, solar energy, electric cars, hydro energy, wind turbines, fuel cells etc. in the energy sector as magnets and motors, in electronic devices like smart phones, GPS systems, colour display, rechargeable batteries and hard drives. It is also used in in aerospace for visors and protection, missile guiding systems etc., in advance communications and health care. REEs find use in products used in day to day life also.
Based on the present projections of the NITI AYOG and other various government agencies, the minimum projected annual requirement of REEs in green energy sector alone (for 30% penetration of EVs in the automobile sector by 2030, wind energy of 10 GW per year and other applications) will be 15,000 tpy.
India recognized the importance of rare earths way back in 1950 and started extracting the rare earths by forming a public sector company Indian Rare Earths Limited (IREL) under Department of Atomic Energy. India, however could not make progress in this sector due to several reasons.
Though IREL was primarily set up to develop India’s capacity to produce rare earth, subsequently its focus shifted to other common minerals (which are comparatively easier to extract) as evident from the fact that the majority of its income is generated from the production and marketing of the common minerals contained in the beach sands such as ilmenite, rutile, zircon, sillimanite and garnet. Despite being an early mover, India could not develop itself as a manufacturer of rare earth elements and further value addition to metals and magnets. Even after 50 years of operating the plant set up in 1950, IREL never ventured or even interested in carrying out R&D activities for the production of high pure individual rare earth elements or further value addition to metals and magnets.
In 2004, IREL stopped the operation of the plant and started to construct a new plant with new technology to process 10,000 tpa of monazite to produce mixed rare earths. It is a pity that even after 15 years of work, they could only achieve 60% capacity. The plant is yet to achieve its full capacity.
In India, though continuous efforts are being made by various agencies to identify other REE minerals than monazite, so far, no definite results had been achieved. India is endowed with 12 million tonnes of monazite mineral containing more than 60% REEs and in the present scenario, the only alternative is to process sufficient beach sand mineral deposits to produce the monazite and then value add the monazite to produce the REEs required for the country.
Indian Rare Earths Ltd.,(IREL) was primarily formed in 1950 to process the monazite available from the mining organizations in Tamilnadu and Kerala to produce, rare earths and thorium nitrate. However, in due course of time, their priorities changed and instead of REEs, their concentration turned to other beach sand minerals like ilmenite, zircon, rutile, sillimanite and garnet. As IREL was unable to increase the mining capacity in line with the world requirement of these minerals, or succeed in setting up value addition facilities for the minerals like ilmenite and zircon, the government opened up the BSM industry to private sector to produce all minerals except monazite in 1998 and the ilmenite production in the country increased many fold and also few small capacity value addition facilities were established.
However, there were business animosities developing in the industry resulting in mudslinging and complaints on the private miners by persons from the press and persons calling themselves as social activists, which were contradictory to facts. The main allegations by some social activists and media persons were that there was illegal mining and illegal export of monazite.
All these allegations were investigated by the various agencies and there are number of reports stating that there is no substance in the allegations. However, these forces went on making repeated complaints in media and to the various government agencies and also public interest litigations in the courts and in 2013, the government suspended the operations by private sector in Tamilnadu and at one stage, the cases went to court and so far there is no solution. For reasons unknown, the operations in Andhra Pradesh also were asked to close down subsequently. The stoppage had resulted in India becoming an importer of these minerals and their value added products today. It is pertinent to mention here that only IREL and another Kerala state company are now operating.
One allegation on illegal mining indicating some discrepancies in the actual mining quantity in variance with the annual mining plan quantity and this aspect is recently declared as not illegal if the variation is within 40% of the mining plan quantity.
The other allegation of export of monazite is only figment of imagination of the vested interests as monazite if exported can easily be identified in the ports as all the ports are having radiation scanners.
It is pertinent to note that IREL is having their mining unit at Manavalakurichi, Kanyakumari District, Tamil Nadu. IREL, MK has acquired 28 Hectares of land in Kootumangalam Area. Out of 28 Hectares of land, IREL had mining rights for only 14 Hectares under the mining lease G.O. 1114 Dt. 12.08.1981. For the balance area of 14.84 Hectares IREL applied for mining lease and their mining lease (3D No. 74 Dt. 17.06.1998) could not be executed for want of Environmental clearance. Even though they were not having valid mining lease and valid EC, IREL conducted mining operation during the period 1997 to 1999. The entire 14.84 hect of land was mined by using dredger up to the depth of 9m. Later to camouflage this issue IREL have refilled the mined out area with the tailings and carried out afforestation. But now the area is appearing as fresh deposit. If we take sample in this area and the adjacent area this Illegality will be proved. Now also this area ML Deed is not executed.
Neither the government of Tamilnadu or the government of India had taken any action or suspended the activities of IREL for this flagrant and physically visible violation, whereas the authorities were very prompt to act on imaginative and false complaints by vested interests and also close down the Andhra operations without any reason. Further, IREL plants were operating without environment clearances for years together.
Even with all these violations, the plants could not operate profitably. To aid IREL, GOI came up with two actions.
1. Totally eliminate private sector by reducing the threshold value to zero so that IREL can dictate the market and price of their products in India.
2. Canalize the sales of the products of the private sector through IREL so that the total sales revenue including those of the private producers will reflect in the books of accounts of IREL with a hefty commission on sales.
IREL turned into profit only after the above two actions were taken.
In view of the recent talk of PM in CII plenary, actions needs to be taken to develop the REE industry in India so that in addition to becoming self sufficient in terms of REEs, REE metals, REE magnets and other REE products, India can become a competitive exporter of REE and their products at the present juncture where the whole world is looking for alternative sources other than China.
The government company (IREL) had proved to be not capable for this and hence the only alternative is to open up the beach sand mineral industry to private sector and make that value addition will be mandatory for a proportion of the products produced. Indian organizations already in this field are technically and financially capable of producing and value adding all the beach sand minerals.
This type of action will result in the following:
1. India will be totally be self sufficient in REE products in addition to becoming an exporter.
2. For products like ilmenite and its value added product, TiO2, India can be self sufficient and can even become an exporter. It is pertinent to note that presently every year India is importing around 1,75,000 tons of TiO2 mostly from China.
3. Generate employment for more than two lakh direct employees and five lakh indirect employees.
4. The above action also will help more than 50,000 persons who were rendered jobless from 2013 onwards due to the stoppage of the operations in the beach sand minerals sector.
The above action will also reduce our dependence on China and also increase the revenue to our government, in addition to saving foreign exchange. This will convert the COVID-19 crisis into a turning point towards becoming a self-reliant nation.
Very thought provoking narrative by the both the authors. India has already delayed the full exploitation of its potential geological blocks because of lack of committments and poor and wavering mining policies. Mining industry needs to put in big money and big risk which the private entrepreneurs can do in short time in contrast to the government agencies which are procedure centric and lacking in decision making. Regulatory control by government and mining of our mineral assets by private agencies is the need of the hour in all the strategic mineral domains. India could not fully exploit all the atomic mineral wealth proved by the AMD, in northeastern part of country only because of excessive control regime and not opening up its mining to private companies. Otherwise we could have attained self sufficiency if not export potential about a decade ago. Same scenario exists for RM n REEs. We need a strong forward traction in this regard else our defence industry will be lagging behind.
India have sufficient REE deposit. India has delayed it’s exploration but these policies that our government has put forward will help the mining industry in our country.
Great read like always. Thank you Dr Amit Tripathi and Lt General Rameshwar Roy for your expert perspectives.
Among others, the current total requirement of rare-earth elements (REE) is ~60% for rare-earth magnets alone, which are needed for clean energy. This trend of REE requirement is projected to keep growing progressively in coming years.
In the backdrop of the above, clarion call given by our honourable Prime Minister is timely and a welcome move. In India there is tremendous scope for REE exploration and resource augmentation. Hard rocks have remained largely unexplored. There are several favourable geological domains that need to be taken up for REE exploration on adjudged priority. Several such areas have been outlined in the book, link of which is given below.
Given the opportunity, private sector can definitely play vital role in speeding up exploration and resource augmentation to cope up with the fast growing demand for REE by various industries.
Serious efforts also need to be made for technological innovation in downstream domain in manufacturing of intermediate products to counter price pressure. It is still more relevant under prevailing uncertainty. It would ensure progressive growth of closely-knit chain of Indian Rare-Earth Industry. Industrially speaking, promotion of REE Industry should be an integral part of the present programme of “Make in India”, as envisaged by our revered Prime Minister.