Goldman Sachs in its October 2025 report flagged risk of disruption in supply of rare earths and key minerals. The report says that rare earths disruption of 10 percent could cut global output by $150 billion. Light rare earths could be future targets for curbs as China expands rare earths export controls. The mounting risks to global supply chains of rare earths and other critical minerals, with China‘s dominance in mining and refining is of concern. China controls 69 percent of global rare earth mining, 92 percent of refining, and 98 percent of magnet manufacturing. China had expanded export curbs on rare earths a few days back, adding five new elements and extra scrutiny for semiconductor users ahead of the then-expected summit between the leaders Donald Trump and Xi Jinping.
Rare earth elements (REEs) have become a flashpoint in geopolitics, as they are critical to high-tech industries and essential in uses from batteries to computer chips, artificial intelligence, and defence equipment. Therefore, more nations are seeking to build independent REE and magnet supply chains. Samarium, graphite, lutetium, and terbium were particularly vulnerable to export curbs. Samarium, used in heat-resistant samarium-cobalt magnets, is key for aerospace and defence. Cerium and lanthanum are reportedly future targets for curbs. Neodymium-Praseodymium Oxide (NdPrO) is critical for making magnets.
Heavy rare earth elements were particularly scarce outside China and Myanmar, with most known deposits being small, lower-grade, or radioactive, while developing new mines requires eight to 10 years. Refining REEs requires advanced expertise and infrastructure, with builds typically taking five years. Barriers from geological scarcity to technological complexity and environmental challenges remain substantial. Western producers’ reliance on China remains significant.
Rare Earths and Their Applications
Rare earths are a group of 17 metallic elements, scandium, yttrium, and the 15 lanthanides, that are crucial for many modern technologies, including electronics, clean energy, and defence, and underpin over 200 advanced applications. Rare earth elements are the “vitamins” of modern industry. Although their name suggests rarity, they are not scarce in the Earth’s crust, but rather, they are difficult to mine because they are dispersed and not found in high concentrations in economically viable deposits. They are lustrous, silvery-white, soft, and somewhat reactive metals. Their unique chemical, magnetic, and optical properties make them vital for applications like strong permanent magnets for electric motors, wind turbines, and consumer electronics; components in smartphones, laptops, and televisions; key in rechargeable batteries, electric vehicles, and other clean energy technologies; lasers, glass polishing, catalytic converters, and medical imaging (MRI).
Neodymium enables powerful magnets in electric motors, and europium is essential for the vibrant colours of screens. These properties cannot be easily substituted, making REEs critical even in minute quantities. They appear in everything from smartphones and laptops to wind turbines, LED lighting, electric vehicles, drones, and precision defence systems. Without REEs, the productions of many high-tech, green, and even medical innovations would be severely constrained.
Rare earths are critical for national security and military applications, such as guidance systems, radar, and stealth technology. Every Lockheed Martin F-35 fighter jet, for example, is engineered with more than 420 Kg of rare earths. More than 2,500 Kg rare earths support large Arleigh Burke-class guided missile destroyers, and each Virginia-class submarine requires more than 4,500 Kg of the sought-after metals. The push for renewable energy, such as wind turbines and solar panels, is a major driver of demand. Rare earths are also used in products like catalysts for petroleum refining, glass, and alloys.
Supply and Market Dynamics
Global rare earths dynamics are driven by the growing demand for these critical minerals in technology and the energy transition. China holds a near-monopoly and efforts are underway to develop new mines and processing facilities in countries like the United States, India, and Australia. China‘s dominance is the result of decades of state policy. China‘s control gives it significant geopolitical leverage over semiconductors and defence systems. Trade networks are evolving, with some Asian countries forming a more cohesive trade community that could play a greater mediating role in the China–U.S. trade relationship.
While rare earths are not geographically scarce, economically viable concentrated deposits are rare, especially for heavy rare earths. Countries with the largest reserves include China, Brazil, and India. Global production of rare earth oxides has nearly tripled since 2017, with production closing toward 390,000 metric tons in 2024, driven by increasing investment in renewable energy and electric vehicles.
Rare Earths in India
India has the world’s fifth-largest rare earth (RE) reserves estimated at approximately 8.52 million tonnes, but produces a very small fraction. The main source is monazite sand, primarily found along the eastern and southern coasts. Production has been slow due to factors like difficult-to-extract resources, regulatory hurdles, and a lack of downstream industrial infrastructure beyond initial extraction. To meet its goals for clean energy and strategic autonomy, India is working to overcome these challenges through government initiatives, exploring partnerships, and developing its domestic supply chain, but it remains a major importer.
India holds about 5-8 percent of the world’s rare earth reserves, making it a country with significant potential. Despite large reserves, India‘s production is low, at around 2,900 tonnes per year, accounting for less than 1 percent of global output. India‘s reserves have a low grade and are linked with radioactivity, making extraction long, complex, and expensive. Securing new mining permits, obtaining environmental and forestry approvals, and dealing with residential settlements have created significant operational constraints for the state-owned Indian Rare Earths Limited (IREL). While India has facilities for mining to refining into oxides, it lacks industrial-scale facilities for downstream processes like producing alloys and magnets.
Setting up a complete rare earth supply chain requires massive investment and takes about a decade to get operational. Reducing dependence on China, which currently dominates the global market, is a key driver for India‘s efforts. A reliable domestic supply is crucial for India to meet its 2070 net-zero target, as rare earth elements are essential for wind turbines and electric vehicle motors. The government is trying to incentivize private investment and develop a complete domestic supply chain. India is exploring new deposit locations and potential global partnerships to boost its capabilities.
Strategic Importance for India’s Future
Rare earth elements are important enablers in four strategic areas. REEs are essential for renewable energy technologies, from the powerful magnets in wind turbines to catalysts in solar panels and batteries in electric vehicles. Expanding domestic rare earth capacity supports India’s climate targets and energy security by nurturing a local clean-tech industry. As India furthers the digital economy and manufacturing of electronics (smartphones, computers, and consumer electronics), access to rare earths provides supply security. It is also the foundation for the development of electric and autonomous vehicles, drones, and other new transportation. Defence systems like guided missiles, radar, lasers, communication systems, depend extensively on REE based parts. Domestic production of rare earths will enhance national security by lowering India’s geopolitical risk exposure to supply shocks. Lastly, by producing rare earths domestically, not only can India save on expensive rare-earth imports but could also create or export high value materials.
Way Ahead for Expanding India’s REE Capabilities
Since April 2025, Beijing imposed strict export controls on seven kinds of rare earth metals and related magnets, including samarium. China’s Ministry of Commerce stated that these materials serve both civilian and defence-related purposes, and that any future exports would be subject to approval through specially issued licences. This move shook the global supply chains, particularly in defence, EVs, and high-tech manufacturing sectors. Currently, China dominates the global production of samarium, serving as the primary supplier worldwide. Samarium is an essential element for advanced military applications and stands out for its strategic indispensability. Beijing’s timings for controlling the supply chains for rare earths are not accidental. It comes at a moment when the Western and allied military powers have strained their military resources due to the prolonged battles in Ukraine and the Gaza Strip. That puts greater onus on India to act more quickly.
India’s vision of self-reliance fuelled by pandemic-era supply disruptions placed REEs at the centre of its economic and security strategy. REEs are not truly scarce. Mining these elements is technically complex. Concentrated, economically viable deposits are rare especially for heavy rare earths. For decades, China has dominated the global rare earths market. By the early 2000s it produced over 95% of the world’s supply, leveraging low costs and loose environmental rules. Even today, China controls nearly 70 percent of global output. The United States and Myanmar each account for around 12 and 8 percent respectively, with Australia, Thailand, Nigeria, and others sharing the remainder. India’s own output is currently a small slice about 0.7 percent of the world’s supply as of 2024.
China, Brazil, and India are reported to have the largest reserve bases, followed by Australia, Russia, Vietnam, the U.S., and Greenland. Geopolitical tensions and the clean energy transition are encouraging the diversification of supply chains from China. Globally, the production of rare earth oxides since 2017 has almost tripled, with production closing toward 390,000 metric tons in 2024.
India is believed to hold around 6.9 million metric tons of rare earth reserves, making it the world’s third largest reserve holder. Despite this potential, India’s actual production has remained modest. Mine output is nearly 2,900 metric tons per year and has seen little growth. This is less than 1 percent of the global supply, a striking gap given that India possesses an estimated 35 percent of the world’s beach sand mineral deposits (a rich source of rare earths). Realising this potential requires bridging the gap between reserves and production. This vast resource, if fully tapped, could position India as a key long-term supplier. Mine production of rare earths in India has to go up significantly and quickly.
Recognising rare earths as strategic assets, the government launched initiatives to develop the sector. These efforts blend policy reform, funding incentives, and infrastructure projects to create a robust domestic rare earth ecosystem. Setting up the Rare Earth Theme Park Initiative will support establishing pilot plants and demonstration facilities across the value chain, fostering entrepreneurship and skills development. Odisha Sands Complex (OSCOM), a flagship unit of Indian Rare Earths Limited (IREL), is expanding its processing capacity, notably for mixed rare earth chlorides, and upgrading its mineral handling infrastructure, including a private freight terminal and a new de-salination plant. A planned Rare Earth Permanent Magnet plant will produce 3,000 kilograms of magnets for defence and clean energy applications. Joint ventures, such as IREL-IDCOL (Industrial Development Corporation of Odisha), are building new mining and separation plants to mine coastal sand deposits in Odisha. In Bhopal, a proposed Rare Earth and Titanium Theme Park aims to commercialise laboratory-scale technologies for extraction and processing, creating an innovation hub for the sector.
India already has a historical foundation in rare earth processing. IREL, established in 1950, has decades of experience in refining and metallurgy. Building on this, the government aims to triple the country’s rare earth oxide production capacity by 2032 to meet growing industrial and export demand. Private industry is also stepping up. In late 2024, Trafalgar Engineering announced plans for India’s first integrated plant to produce rare earth metals, alloys, and magnets. Such facilities would fill a critical gap in the value chain, allowing India to go beyond the mining of raw materials and proceed up the value chain toward the production of finished, high-technology goods. All these feed into a combined effort to form a 100 percent domestic supply chain, from exploration and mining to processing and the end-use manufacturing process.
Some major private firms in India involved in rare earths include Vedanta Group, Hindustan Zinc Limited (a Vedanta subsidiary), Hindustan Copper, Mahindra, Uno Minda, and JSW Group, which are either already in the sector or have shown interest in developing a rare earth magnet ecosystem. India is also advancing QUAD-based mineral cooperation and Production-Linked Incentive (PLI) incentives to reduce rare earth dependency.
The European Union is making a significant shift in its approach to resource security, preparing to launch a strategic stockpiling program for critical minerals. Japan, South Korea, and the United States have long maintained national stockpiles, this move underscores a broader securitization of critical mineral supply chains. But while stockpiling may offer short-term resilience, it reflects a largely unilateral response to a broader global challenge. India may also have to do the same like strategic crude reserves.
India’s rare earths plans are at an inflection point. With KABIL (Khanij Bidesh India Ltd), and mining reforms, India is securing overseas assets and opening its rare earth sector to private players. With ample reserves, a growing global demand and strong policy support, India has what it takes to become a strong player in the world regarding rare earth elements. The government’s sweeping reforms and incentives are a sign of its determination to turn mineral wealth into national power. The challenges in technology and regulation will be demanding, but India’s long-term perspective is clear, to translate its rare earth possibilities into economic growth, technological leadership, and strategic security. In an era where power projection extends beyond borders into supply chains and resource dependencies, India must rethink its national security architecture. Rare earth resilience is no longer merely an industrial challenge but a geopolitical imperative.
Note: The article was originally written by the Author for The First Post on 31st October 2025; it has since been updated.
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