Reliance, Vedanta, Adani join India’s drive to cut China rare earth dependence

Major Indian conglomerates — Reliance Industries, Vedanta, and Adani Group — have announced investments and partnerships to develop rare earth processing and...

What Happened

Major Indian conglomerates — Reliance Industries, Vedanta, and Adani Group — have announced investments and partnerships to develop rare earth processing and magnet manufacturing capabilities within India, as part of the government's drive to reduce dependence on China.
Andhra Pradesh is one of four states (alongside Odisha, Kerala, and Tamil Nadu) identified in the Union Budget 2026 for the development of dedicated Rare Earth Corridors encompassing mining, processing, and magnet production.
Adani Group has submitted a ₹23,000 crore proposal for an Integrated Titanium and Rare Earth Complex at Visakhapatnam, focused on titanium processing, rare earth separation and refining, and advanced materials manufacturing.
The Union Cabinet has approved a ₹7,280 crore Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPM), targeting 6,000 MTPA of integrated magnet manufacturing capacity through five global-bid beneficiaries.
India currently imports 59–81% of its permanent magnets from China by value, and 85–90% by quantity, despite holding the world's third-largest rare earth reserves at approximately 6.9 million tonnes.

Static Topic Bridges

Rare Earth Elements (REEs) — Definition, Classification, and Strategic Importance

Rare Earth Elements are a group of 17 metallic elements comprising 15 lanthanides (lanthanum to lutetium in the periodic table), plus yttrium and scandium, which share similar chemical and physical properties. They are classified as light rare earth elements (LREEs — lanthanum, cerium, praseodymium, neodymium, samarium, etc.) and heavy rare earth elements (HREEs — europium, gadolinium, terbium, dysprosium, ytterbium, etc.). Despite the name, most REEs are not geologically rare; they are difficult to separate and process, which creates structural supply chain dependencies.

Critical applications: permanent magnets (neodymium-iron-boron magnets for EV motors, wind turbines), phosphors (LED lighting, screens), catalysts (petroleum refining), defence systems (radar, sonar, precision-guided munitions).
Neodymium and dysprosium are the most strategically important REEs for India's EV and clean energy transition.
China accounts for approximately 60–70% of global rare earth mining and over 85% of global rare earth processing and refining — the real leverage point.
India holds ~6.9 million tonnes of REE reserves (third-largest globally); China is first, Brazil second.
India produced approximately 2,900 tonnes of rare earth oxides in 2024 — less than 1% of global output.

Connection to this news: The gap between India's large reserves and negligible production/processing share is the structural vulnerability that the Rare Earth Corridors, the REPM scheme, and private sector investment are designed to close.

Mines and Minerals (Development and Regulation) Act (MMDR Act) and Critical Minerals Policy

The MMDR Act, 1957 is the primary legislation governing the mining sector in India. It was significantly amended in 2021 and 2023 to address critical mineral development. The 2023 MMDR Amendment Act created a separate list of 24 critical minerals (including REEs) that were removed from the exclusive purview of State governments and placed under Central government allocation, allowing auctions to be conducted by the Centre for atomic and strategic minerals.

MMDR Act, 1957: primary mining law; amended in 2015, 2021, and 2023.
2023 MMDR Amendment: designated 24 critical minerals (including lithium, cobalt, nickel, REEs) for Central government auction; States retain royalty entitlement.
Atomic Minerals (traditionally including most REEs with thorium/uranium association) were historically under the Atomic Energy Act, 1962 and exclusive to government entities — this restriction was progressively eased to allow private sector participation.
Department of Atomic Energy (DAE) oversees IREL (Indian Rare Earths Limited), the Central PSU for rare earth extraction.
KABIL (Khanij Bidesh India Limited): a joint venture of NALCO, HCL, and MECL, incorporated in 2019, for overseas acquisition of strategic mineral assets — including lithium (Argentina), cobalt, and REEs.

Connection to this news: Private sector entry into the rare earth supply chain (Reliance, Vedanta, Adani) is enabled by the MMDR reforms that opened REE processing to non-government entities, complementing IREL's upstream mining role.

Rare Earth Corridors — Union Budget 2026 Announcement

The Union Budget 2026 announced the creation of Rare Earth Corridors in mineral-rich states (Odisha, Kerala, Andhra Pradesh, Tamil Nadu) to establish integrated value chains from mining to magnet manufacturing. A corridor approach concentrates infrastructure — ports, power, processing facilities, R&D institutions, and skilled labour — in a geographic cluster to achieve scale and competitiveness.

Four states identified: Odisha (heavy mineral sands on eastern coast), Kerala (monazite-rich coastal deposits), Andhra Pradesh (heavy mineral sands, ilmenite, rutile), Tamil Nadu (coastal placer deposits).
Rare earth deposit types in India: predominantly coastal placer deposits (containing monazite — a phosphate mineral that is the primary Indian REE source, but also contains thorium, creating regulatory complexity under the Atomic Energy Act).
The government's ₹7,280 crore REPM Scheme targets 6,000 MTPA of permanent magnet capacity through competitive bidding among five beneficiaries (up to 1,200 MTPA each), with ₹6,450 crore in sales-linked incentives and ₹750 crore in capital subsidy.
Managed by DAE in coordination with the Ministry of Mines.

Connection to this news: Adani's Visakhapatnam proposal and Vedanta/Reliance partnerships are the private sector response to the Budget's corridor announcement and the REPM scheme's incentive structure.

China's Rare Earth Supply Chain Dominance and Geopolitical Risk

China's dominance in rare earth supply chains is a function of decades of deliberate industrial policy, low-cost labour, relaxed environmental standards for processing, and strategic state investment. China has weaponised this dominance before: in 2010, it temporarily halted REE exports to Japan during a territorial dispute. In 2023 and 2024, China imposed export controls on gallium, germanium, graphite, and some rare earth processing chemicals — signalling escalating use of critical mineral leverage.

China's share of global rare earth mining: ~60%; of processing/refining: ~85–90%.
China's 2023 export controls: restrictions on gallium and germanium (semiconductors); 2024 controls on graphite (battery anodes).
India joined the Mineral Security Partnership (MSP) — a US-led initiative (launched 2022) with 14 partner countries to build resilient critical mineral supply chains outside China.
The US Inflation Reduction Act (IRA, 2022): created incentives for EV supply chains using minerals not sourced from "foreign entities of concern" (including China) — creating market pull for Indian REE processing capacity.
India's strategic interest: EV transition, renewable energy (wind turbines), defence electronics — all heavily REE-dependent.

Connection to this news: Private sector investment in Indian REE processing is driven both by domestic policy incentives and by global demand for non-China sources of rare earth magnets, enabled by the IRA and allied nation procurement preferences.

Key Facts & Data

India's rare earth reserves: ~6.9 million tonnes REO — third-largest globally (after China, Brazil).
India's rare earth production: ~2,900 tonnes (2024) — less than 1% of global output.
China's share of India's permanent magnet imports: 59–81% by value; 85–90% by quantity (FY2022-23 to FY2024-25).
REPM Scheme: ₹7,280 crore outlay — ₹6,450 crore sales-linked incentive + ₹750 crore capital subsidy; target: 6,000 MTPA in five beneficiaries.
Adani Visakhapatnam proposal: ₹23,000 crore Integrated Titanium and Rare Earth Complex.
Rare Earth Corridor states (Budget 2026): Odisha, Kerala, Andhra Pradesh, Tamil Nadu.
KABIL: JV of NALCO, HCL, MECL; incorporated 2019; handles overseas critical mineral acquisition.
IREL (Indian Rare Earths Limited): Central PSU under DAE; primary domestic REE producer.
Mineral Security Partnership (MSP): US-led, launched 2022; India is a member.
17 REEs: 15 lanthanides + yttrium + scandium; classified into LREEs and HREEs.
2023 MMDR Amendment Act: designated 24 critical minerals for Central government auction.