By Atul Kumar
Rare Earth Metals (REMs), a suite of 17 chemical elements from the periodic table, are critically vital for the empowerment of the economic growth, as well as the national security of a nation.
Also, this suite of REMs can even influence geopolitics. The most recent instance of geopolitical sway that we have been witnessing is the ongoing, escalated trade tensions between the United States and China.
Beijing had played a new card: its dominance over Rare Earths. That dominance has abruptly highlighted Rare Earths supply chain issues, as China threatened to step up its reaction.
China holds the lion’s share of the stakes, with over 85 per cent in global rare earth export, and production that is currently approximately 70 per cent to 75 per cent of the world’s share. The US relies on China for 80 per cent of its rare earths need.
The European Union and Japan are also entirely dependent on Beijing’s abundance for the supply of these strategically important materials. In 2018, the EU was the largest importer of China’s Rare Earths products with around 60 per cent of China’s total REMs exports. Japan also imports 82 per cent of their Rare Earths from China.
Now, Australia became the second and the only other major producer after China with 15 per cent of the world’s total production, while the US and Myanmar combine clutches a decent stake of around 15 per cent in global REMs output. China also is the dominant REMs consumer. Japan and the US are the second and third largest consumer of Rare Earth Materials.
However, they are not as rare as their name suggest. The mining and enrichment of these REMs are the most arduous job that makes them infrequent and expensive as well, despite being amply deposited in the Earth‘s crust. They are found in two different categories — heavy and light Rare Earth minerals.
Elements such as Yttrium, Europium, Gadolinium, Terbium, Dysprosium, Holmium, Erbium, Thulium, Ytterbium, and Lutetium come under heavy rare earths. Myanmar and Chinese mines are the main sources for heavy REMs. Whereas, Lanthanum, Cerium, Praseodymium, Neodymium, Promethium, and Samarium are from the light REMs category and are found in northern China.
REMs are crucial and strategically indispensable due to their various applications such as catalysts, glass polishing, wind turbines, lasers, atomic batteries, fibre-optics, defence equipment, space satellites, nuclear energy and optical devices, automobiles, electronic chips, diode-pumped solid-state lasers and power generation.
So, the worldwide demand for REMs has soared materially in line with their expansion into strategic and hi-tech segments. Even futuristic technologies also count on these REMs due to their unique chemical, electrical, magnetic, heat-resistance, spectroscopic and phosphorescent properties that deliver significant performance and super strength characteristics.
In the defence segment, some of these vital metals are being used exceptionally in the building of advanced and futuristic military systems including night-vision and electro-optical sensors, precision-guided munitions, communication systems, Global Positioning System equipment, radar batteries and other critical defence electronics.
They are the pioneers for creating very tough and unique alloys used in military aircraft, armoured vehicles, jet engines and projectiles. These non-substitutable REMs are best suited for next-generation commercial and military systems.
The modern fifth generation fighter aircraft, modern-age nuclear-armed submarines (SSBNs) and nuclear-powered submarines (SSNs), warships, guided cruise missile, long-range ballistic weapons, and EO-IR sensors, but not limited to these, all these gears integrate REMs in considerable quantity. For example, new-age stealth fighter jets could utilise over 400 kg to 450 kg REMs, while an SSN could employ as much as around five tons of Rare Earths.
India’s REMs Demand and Supply
Currently, over 95 per cent of India’s rare earths imports come from China, Hong Kong and South Africa. However, these imports are bare for now and could thrive in the future, as utilisation of REMs is notable due to their practices in conventional as well as non-conventional sources of energy creation including India’s three-stage nuclear energy programme.
Besides, as India’s manufacturing industry (hi-tech devices, heavy machinery and medical equipment) is burgeoning, demand for these strategic infrequent metals will energise significantly in the foreseeable future.
In the 1950s, India was one of the key destinations for these rare earths. Despite having large reserves, India failed to utilise its rare earth sector due to lack of government’s focus and proper mining expertise and industry.
Indian position in the global REMs harvesting is even more inferior than analysed earlier by various government agencies. Indian rare earths industry has great potential in term of REMs stocks and their calculated business could credit around $15 billion annually.
India prides itself of nearly 6.9 million metric tonnes of rare earths including major footprints of rare elements such as Lanthanum, Cerium, Praseodymium, Neodymium, Samarium, Gadolinium, Yttrium and Dysprosium.
Despite that, it has an abysmal production capacity of 1800 metric tonnes per year out of 170,000 metric tonnes worldwide REMs production (only 1 per cent of global output).
India also holds approximately 35 per cent of the global total beach sand minerals deposits including Monazite, Garnet, Zircon, Rutile, Sillimanite and Ilmenite that are plentiful sources of Rare Earth metals, including Titanium, Zirconium, Thorium and Phosphate of Rare Earths. According to Atomic Minerals Directorate for Exploration & Research (AMDER), India holds over one billion tonnes of these infrequent metals.
Currently, Monazite is the one of the major sources of light REMs that constitute around 60 per cent of Monazite composition. Besides, it also comprises oxides of Thorium, Uranium, Silicon, Aluminum, Titanium and Zirconium.
Monazite is the only deposit that contains Thorium as a constituent. India holds over 10 million tonnes of deposits of Monazite. For now, Japan imports Monazite from India for Dysprosium, which is used in NdFeB (Neodymium) magnets for superior qualities.
Indian Rare Earths Limited (IREL), a Mini-Ratna (mini-jewel) public sector undertaking, and Uranium Extraction Division of Bhabha Atomic Research Centre, holds control over the country’s rare earth and responsible for mining and valorization of these Rare Earth metals.
The company can realise an economic benefit by separating materials like Dysprosium and Thorium from Monazite and supplying highly pure Dysprosium to international market, while Thorium will be critical for India’s future nuclear energy mission for reducing carbon footprints.
But no major success has come to its way yet. Besides Monazite, India is also considering the production of Zirconium and Titanium-based alloy, as India owns massive reserves of Titanium and Zirconium in the form of beach sand minerals.
Zicornium sponge is used for building of nuclear grade Zicornium alloy that is employed for making nuclear fuel assemblies, while high grade Titanium alloy is a critical ingredient that is utilised in various vital military systems including missiles, combat jets, warships and submarines for impressive strength and exceptionally light weight.
India has also got its hands over Samarium-cobalt magnets due to extensive Research and Development efforts. Moreover, BARC is in an advanced stage of developing a cost-effective technology to build Sm-Co (Samarium–Cobalt) magnets. As of 2018, IREL has a project underway to set up a 3,000-kg Sm-Co magnets manufacturing facility.
Besides this, two major agencies involved in exploration activities in the country related to REMs are the Atomic Minerals Division (AMD) of the Department of Atomic Energy (DAE) and the Geological Survey of India (GSI).
However, India is currently limited to the extraction of Neodymium but by adopting an empirical strategy, India could obtain Tokyo‘s expertise in building NdFeB magnets in exchange for a supply of raw materials.
In 2014, IREL and Japan’s Toyota Tsusho Exploration entered into an agreement to explore and produce REMs via deep-sea mining, but nothing much came out of the agreement yet. However, Toyotsu Rare Earths India, a subsidiary of Toyota Tsusho, procures some rare earths from IREL and export refined metals in the global market including Japan, US and Europe.
Further, in a fresh move, three Indian state-owned organisations — National Aluminum Company Limited (NALCO), Hindustan Copper Limited (HCL) and Minerals Exploration Corporation Limited ( MECL) — have established a joint venture named Khanij Bidesh India Limited to explore, acquire and refine strategic rare earth metals primarily in Latin American countries.
This move, besides its strategic advantage, will undoubtedly provide thrust to India’s EV (electric vehicles) mission 2030. To accomplish this, India needs a national-level strategy to explore, extract and valorize these rare earth metals.
The investments, market and India’s huge reserves of raw materials make Research & Development in this segment a highly valuable venture that will boost the development of a large number of strategic hi-tech products and industries.
So, developing an ecosystem with mining expertise to extract these minerals makes more sense that eventually will help India to get a place in the global REMs supply chain. It would also stimulate geopolitical posturing of the country.
The rare earths market is expected to grow at a Compound Annual Growth Rate (CAGR) of around 8 per cent during the forecast period of 2019-2024. Domestic R&D efforts and adequate fund liquidity in the production of REMs could create a potential avenue for establishing a competent rare earths industry ecosystem with independence from foreign technology. Likewise, the government also needs to develop a reliable mechanism, commit its sweeping insight into this industry ecosystem.