What Happened
- India is in discussions with the US and France to build alternative critical minerals supply chains, reducing dependence on China
- Rare-earth permanent magnet production is set to begin by year-end under the Rs 7,280 crore REPM scheme
- Four states — Odisha, Andhra Pradesh, Maharashtra, and Gujarat — have been identified for critical mineral processing parks
- The initiative is part of India's broader strategy to secure minerals essential for electric vehicles, renewable energy, defence, and advanced electronics
Static Topic Bridges
Critical Minerals Supply Chain Diversification — The Geopolitical Dimension
Critical minerals supply chains have become a central geopolitical concern. China dominates the global supply chain for rare earths, lithium processing, cobalt refining, and magnet manufacturing. In response, the US-led Minerals Security Partnership (MSP), launched in June 2022, brings together 14 countries (including India, added in 2023) and the EU to diversify supply chains. Separately, the Quad (India, US, Japan, Australia) has established a Critical Minerals Partnership, and India signed a Critical Minerals MoU with Australia in 2023.
- Minerals Security Partnership (MSP): Launched June 2022 by the US; India joined in 2023 alongside Australia, Canada, Finland, France, Germany, Japan, South Korea, Sweden, UK, EU, and others
- India-Australia Critical Minerals Investment Partnership: Signed March 2023, focuses on lithium, cobalt, and rare earths
- India-US Initiative on Critical and Emerging Technology (iCET): Launched January 2023, includes critical minerals cooperation
- France's role: Major nuclear energy and defence partner; has rare earth deposits in New Caledonia and post-colonial mineral access in Africa
Connection to this news: India's engagement with the US and France represents the bilateral implementation track of what began as multilateral frameworks like MSP and iCET, moving from agreements to actual joint processing and supply chain development.
Rare Earth Elements — Classification and Applications
Rare Earth Elements (REEs) are a group of 17 metallic elements comprising 15 lanthanides (lanthanum through lutetium) plus scandium and yttrium. Despite their name, most are not geologically rare, but they seldom occur in concentrated, economically extractable deposits. They are classified into Light Rare Earth Elements (LREEs: lanthanum to europium) and Heavy Rare Earth Elements (HREEs: gadolinium to lutetium plus yttrium).
- Key applications: Neodymium and praseodymium for NdFeB magnets (strongest permanent magnets known); dysprosium for high-temperature magnet stability; cerium for catalytic converters; europium and terbium for phosphors
- India has the world's 5th-largest rare earth reserves (~6.9 million tonnes) but limited processing capacity
- Major deposits in India: Monazite-bearing beach sands of Kerala, Tamil Nadu, Odisha, and Andhra Pradesh
- Indian Rare Earths Limited (IREL), a government PSU under Department of Atomic Energy, is the primary miner
- Atomic Minerals Directorate for Exploration and Research (AMD) conducts exploration
Connection to this news: India's push to domestically produce rare earth permanent magnets aims to convert its raw material advantage (5th-largest reserves) into manufacturing capability, closing the gap between mining and end-product manufacturing.
India's Industrial Policy for Strategic Sectors
India's approach to critical minerals is part of a broader industrial strategy for strategic self-reliance (Atmanirbhar Bharat) in sectors where import dependence poses security risks. The Production-Linked Incentive (PLI) scheme, launched across 14 sectors since 2020, provides output-based subsidies to build domestic manufacturing. The REPM scheme follows the same PLI logic — sales-linked incentives rather than upfront grants.
- PLI scheme: Rs 1.97 lakh crore allocated across 14 sectors including electronics, pharma, auto components, solar PV, batteries
- REPM scheme (Rs 7,280 crore): Modelled on PLI — Rs 6,450 crore in sales-linked incentives + Rs 750 crore capital subsidy
- National Critical Mineral Mission (Rs 16,300 crore): Covers exploration, mining, processing, and recycling
- Semiconductor PLI: Rs 76,000 crore to establish chip fabrication and packaging in India
Connection to this news: The critical mineral processing parks in four states represent the physical infrastructure layer that complements the financial incentives of the REPM scheme, creating an integrated ecosystem from raw material to finished magnet.
Key Facts & Data
- India has the 5th-largest rare earth reserves globally (~6.9 million tonnes)
- China controls ~60% of rare earth mining, ~90% of processing and magnet manufacturing
- Rs 7,280 crore REPM scheme targets 6,000 MTPA manufacturing capacity
- Minerals Security Partnership: 14 countries + EU, India joined in 2023
- India-Australia Critical Minerals Investment Partnership signed March 2023
- Four states for processing parks: Odisha, Andhra Pradesh, Maharashtra, Gujarat
- Rare Earth Elements: 17 elements (15 lanthanides + scandium + yttrium)
- IREL (Indian Rare Earths Limited) is India's primary rare earth miner, under Department of Atomic Energy