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Prelims Capsule


How India can counter China’s Lithium Dominance?

How India can counter China’s Lithium Dominance?


  • GS 1 || Geography || Indian Economic Geography || Mineral Resources

Why in the news?

India can counter China’s Lithium Dominance


Demand for the metals is increasing as renewable energy becomes more important across the globe. Rare Earth Elements (REE) are critical to almost all electronic manufacturing and are essential components of miniature permanent magnets (Rare Earth Permanent Magnets or REPM). REPMs are also critical for almost all green energy applications.

What are rare earth element?

  • The rare-earth elements (REE), also called the rare-earth metals or (in context) rare-earth oxides, or the lanthanides.
  • The rare earth elements (REE) are a set of seventeen metallic elements. These include the fifteen lanthanides on the periodic table (cerium (Ce), dysprosium (Dy), erbium (Er), europium (Eu), gadolinium (Gd), holmium (Ho), lanthanum (La), lutetium (Lu), neodymium (Nd), praseodymium (Pr), promethium (Pm), samarium (Sm), , terbium (Tb), thulium (Tm), and ytterbium (Yb)) plus scandium and yttrium.

Strategic importance of REM:

  • Diversified technologies: They have unique electrical, metallurgical, catalytic, nuclear, magnetic, and luminescent qualities, and they are strategically essential due to their utilisation of new and diversified technologies that meet today’s needs.
  • Bring high-tech: Its applications range from every day (for example, lighter flints, glass polishing media, and vehicle alternators) to high-tech (lasers, magnets, batteries, fibre-optic telecommunication cables).
  • Futuristic technologies: These REMs are required by even futuristic technologies (For example high-temperature superconductivity, safe storage and transport of hydrogen for a post-hydrocarbon economy, environmental global warming and energy efficiency issues).
  • With their spread into high-end technology, the environment, and economic spheres, global demand for REMs has skyrocketed.
  • Critical for a wide range of modern technologies: They are critical for a wide range of modern technologies, including consumer electronics, computers and networks, communications, clean energy, advanced transportation, health care, environmental mitigation, and national defence, among others.
  • Increased efficiency: Their unique magnetic, luminescent, and electrochemical properties aid in the reduction of weight, emissions, and energy consumption, resulting in increased efficiency, performance, and miniaturisation.
  • Day to day use: They’re in everything these days, from I-phones to I-TVs, and many other gadgets that people use on a daily basis, such as computer memory, DVDs, rechargeable batteries, cell phones, catalytic converters, magnets, fluorescent lights, and much more.
  • These are employed in air pollution control, electronic device lighted screens, and optical-quality glass polishing.

China’s Monopoly:

  • China has accumulated global rare earth dominance through time, producing 90 percent of the rare earths required by the globe at one stage.
  • However, it has now dropped to 60%, with the remainder being generated by other countries, including the Quad (Australia, India, Japan and United States).
  • Since China halted exports of Rare Earths to Japan, the United States, and Europe in 2010, production facilities have sprouted in Australia and the United States, as well as smaller facilities in Asia, Africa, and Latin America.
  • Despite this, China has the largest share of processed Rare Earths.

Rare earth element in India:

  • REE reserves are abundant in India. With about 7 million tonnes of REE reserves, India ranks sixth in the world, accounting for more than 5% of worldwide REE reserves. In the 1950s, India began attempts to create domestic REE production capability by establishing the Indian Rare Earth Ltd (IREL) for REE mining and processing.
  • India has twice the REE reserves of Australia and hence has a lot of room for collaboration with global tech giants.
  • Despite its abundant reserves and early start, India has been unable to develop its REE business, and it’s part of the global REE market has remained insignificant.
  • As a result, India’s REE production stayed stable for years at around 2,000 tonnes before climbing to 4,215 tonnes in 2018-19.

Reason for low Rare Earth Elements production in India:

  • The government’s inaction is largely to blame for India’s failure to realise its REE potential.
  • REE discovery and processing face several financial, technological, and environmental hurdles, necessitating government assistance in the form of clear policy and financial assistance throughout the early stages of development.
  • Despite acknowledging the importance of REE, the government has failed to produce a clear policy or road map for the sector’s development.
  • Instead of establishing a separate strategy for REE, the government combined it with atomic minerals, ensuring state monopoly and keeping foreign and domestic private investors at bay, resulting in a stagnating REE industry.
  • Focus on a few rare earth elements: Ironically, IREL, which was founded to create REE, has never really produced REE.

India’s Current Policy on Rare Earths:

  • The Bureau of Mines and the Department of Atomic Energy have been conducting exploration in India. Mining and processing used to be done by a few small private companies, but now it’s all done by IREL (India) Limited (previously Indian Rare Earths Limited), a government-owned company under the Department of Atomic Energy.
  • India has granted government corporations such as IREL a monopoly over the primary mineral that contains REEs: monazite beach sand, which is found in many coastal states.
  • IREL produces rare earth oxides (low-cost, low-reward “upstream processes”), which it sells to foreign firms that extract the metals and manufacture end products (high-cost, high-reward “downstream processes”) elsewhere.
  • IREL’s main goal is to supply the Department of Atomic Energy with thorium, which is derived from monazite.

Opportunities for Indian Industries:

  • Critical for climate change: The rare-earth industry’s long-term viability is critical for climate change mitigation, pollution management, and energy security in a low-carbon economy.
  • Exploration, mining, extraction, and completed product production are all part of the rare earth supply chain.
  • Ability to extract and process: India has demonstrated its ability to extract and process rare earths from mineral ores.
  • Indian Rare Earths Ltd (IREL), a government-owned corporation, has been extracting and processing rare earths from monazite since 1952.
  • Make in India initiative: India needs to develop the downstream industry, particularly permanent magnets, through public–private partnerships or the Make in India initiative.
  • Strengthen ties with nations: It is necessary to strengthen ties with nations such as Japan in order to exchange expertise and new technologies for the rare-earth industries’ upstream and downstream operations.
  • Encourage the Indian private sector to go internationally for REE industries to get concessions on exploring and mining.

Future use of Rare Earth Metals:

  • Global demand: Over the next decade, global demand for autos, consumer electronics, energy-efficient lighting, and catalysts is likely to skyrocket. These technologies/industries will use REMs as a critical raw material in the future.
  • Demand for rare earth magnets is likely to climb as demand for rechargeable batteries rises.
  • Surgical lasers, magnetic resonance imaging, and positron emission tomography scintillation detectors are projected to become more popular as medical technology advances.
  • REMs may be used in future military and navy arsenals to improve efficiency and handling.

Needed Reforms:

  • Create facilities that can compete: India needs to open up its rare earth industry to competition and innovation, as well as attract the massive quantities of money needed to create facilities that can compete with and supply the rest of the world.
  • New Department for Rare Earths mineral (DRE): The best course of action might be to create a new Department for Rare Earths (DRE) within the Ministry of Petroleum and Natural Gas, which could draw on the ministry’s exploration, exploitation, refining, and regulatory expertise.
  • This REM department should be in charge of policy development, with a focus on attracting investment and encouraging R&D, with the first step being to allow private sector enterprises to process beach sand minerals while remaining compliant with environmental standards.
  • It should also establish the Rare Earths Regulatory Authority of India (RRAI) as an independent regulator to resolve disputes and maintain compliance in this sector.

Way Forward:

  • Exploration of other non-radioactive minerals has to be accelerated through a public-private collaboration.
  • The need for new concepts and techniques, like remote sensing capabilities, to increase exploration competence.
  • Techniques and infrastructure for extracting REE metals must be pooled, and a gap in the areas must be recognised.
  • Commercial-scale recycling technologies for REE-containing materials are required.
  • Need to find new applications for the REE and use it as a replacement for rare earths that are scarce or crucial in diverse applications.
  • Optimized market tactics are required for a long-term rare-earth business.
  • Must fund a research and development programme in the field of-
    • Development of environmentally friendly extraction and processing methods.
    • Manufacturing of certain rare earth goods.
    • Development of plant for rare earth recovery from e-waste and coal fly ash.

Mains oriented question:

Minerals of the future are REMs. Fill up the blanks with your own ideas. Is China’s monopoly over REM resources justified? In this context, what is India’s position? (200 words)