The world en masse is looking to transition to clean energy. Leading the charge by sheer volume in China, and India is not far behind. This has skyrocketed the demand and trade for critical rare earth minerals. As China plans to monopolise these rare mineral assets with trade curbs, India looks to aggressively go self-reliant in the long term.
As the demand for these minerals, of which rare earth magnets take up a significant portion, gathers momentum worldwide, India has ramped up its move to secure its deposits.
Earlier last week, Joint Secretary Dinesh Mahur from the Ministry of Mines said that the government was in the final stages of rolling out an incentive scheme for recycling critical minerals (copper, lithium, nickel, cobalt and rare earth elements).
This went in line with the ₹1,500 crore earmarked for the same under the National Critical Mineral Mission (NCMM).
The NCMM has a total outlay of ₹34,300 crore for a period of more than seven years. The mission looks to make India self-reliant while achieving green-energy transition. Out of the earmarked amount, ₹16,300 crore has already been approved.
Around ₹18,000 crore is expected to come in from public sector enterprises, and the mission pushed for exploring critical minerals within India and at offshore sites.
Rare earth magnets, which are widely used in electric vehicles as a critical component of Permanent Magnet Synchronous Motors (PMSM), can also be found even in accessories of ICE vehicles, like windshield wipers and power steering mechanisms. Minerals such as copper, lithium, nickel, cobalt and rare earth elements are essential to green energy, with their use in wind turbines to electricity networks and EV battery manufacturing.
The Centre’s latest move with the NCCM is to cut out China’s claws into the world’s stockpile, especially after the neighbour to the northeast of the nation curbed its trade in rare earth magnets. In the near term, this Chinese dominance is expected to create significant production delays in the EV auto industry since the Asian nation mines more than 60 per cent of the world’s rare earth metals and refines 91 per cent of the global supply.
Despite India being the third largest reserve of rare earth minerals, the lack of a self-reliant supply chain gave way to overreliance on China, and the Government of India looks to change this aggressively with the ₹34,300 crore bet on the National Critical Mineral Mission.
Earlier this week, Odisha Chief Minister Mohan Charan Majhi stressed the state’s move to be a “diversified industrial powerhouse” from being “just a minerals and metals hub”. What the state leader meant was that they were looking at more industries to support.
However, the state has been a key driver in the mining, metallurgy and metal downstream sectors, and the latest foray into emerging industries in the region in chemicals, food processing, apparel, and textiles is expected to not hamper the state’s undisputed claim as the ‘minerals hub of India’.
Rare earth minerals have become more critical than ever, and the NCCM is expected to lift the country’s capabilities as India looks to cut the emissions intensity of its GDP by 45 per cent by 2030 from 2005 levels and achieve 50 per cent of its electric power capacity from non-fossil sources by 2030.
The Geological Survey of India (GSI) has stepped up for NCCM, with it taking up 195 projects in the FY2-24-2025 field exploration season for identifying and assessing critical mineral deposits. Thirty-five of them are in Rajasthan alone.
“More than 100 critical mineral blocks are set to be auctioned, and exploration will be expanded to offshore regions rich in polymetallic nodules containing cobalt, rare earth elements, nickel, and manganese,” the Ministry of Mines stated in April this year.
Back in the 2021-2022 and 2022-2023 explorations seasons, the GSI did recon surveys for rare earth elements, including neodymium, at Sirohi and Bhilwara in Rajasthan. Moreover, the Department of Atomic Energy discovered around 1,11,845 tonnes of in-situ rare earth elements oxide (REO) at Balotra in the state.
Rajasthan and Odisha are just two of the many states contributing to the NCCM. Broadly, India looks to secure domestic critical mineral exploration projects through public sector undertakings and acquire critical mineral assets abroad by supporting private firms.
Apart from setting up ‘Mineral Processing Parks’, which are dedicated zones to process critical minerals with modern infrastructure and facilities, the Centre looks to create a cumulative mineral stockpile to ensure an uninterrupted supply of critical minerals in the future.