The Rare-Earth Magnet Puzzle: From Disorder to Direction
While rare earths are not geologically scarce, refining them is complex, costly, and environmentally challenging. This fragility has created a global supply chain dominated by China, which controls ~70 percent of global output and 64 percent of magnet manufacturing.
September 30, 2025. By News Bureau
While rare earths are not geologically scarce, refining them is complex, costly, and environmentally challenging. This fragility has created a global supply chain dominated by China, which controls ~70 percent of global output and 64 percent of magnet manufacturing. For India, with ambitious goals of 30 percent EV penetration by 2030, this dependence has become a strategic bottleneck.
A Global Snapshot: How Much Dependence Is Too Much?
China’s leadership in rare earths is built on abundant deposits, early industrial planning, and decades of refining expertise. Its Bayan Obo mine remains the world’s largest, and Chinese producers command the deepest separation capacity.
Recent export restrictions on Neodymium–Praseodymium (NdPr) alloys, critical inputs for high-performance NdFeB magnets, pushed global prices up 16 percent within weeks in mid-2025. The episode highlighted how concentrated supply translates into geopolitical leverage.
Other nations are scrambling to respond: the US has revived the Mountain Pass mine, Australia’s Lynas operates outside China, and Japan has announced USD 340 million in subsidies for non-Chinese magnet suppliers. Yet, despite its share of global supply declining from 95 percent in 2011 to ~70 percent today, China remains the single most influential player in rare earths.
India’s Reality Check and the Rare Earth Roadblock
India imported 2,850 tonnes of rare earth magnets in 2024, a 49 percent increase YoY, making it the 17th largest buyer. By mid-2025, nearly 2 million EVs had been registered, but OEMs like Bajaj, TVS, and Maruti warned of potential production halts as Chinese curbs disrupted supplies. With each EV requiring 1–2 kilograms of NdFeB magnets, India could soon need more than 7,000 tonnes annually.
This dependence is striking because India holds an estimated 8.5 million tonnes of rare earth oxides. Critically, these reserves include neodymium and praseodymium (Nd, Pr), the backbone of NdFeB magnets, in monazite sands and hard rock formations across Rajasthan, Arunachal Pradesh, and coastal states. However, heavier rare earths such as dysprosium (Dy) and terbium (Tb), vital for high-temperature stability in EVs and defense magnets, are far scarcer in India. This imbalance means that even with domestic reserves, India cannot yet build a fully self-sufficient magnet supply chain.
Compounding the challenge, refining is complex. It involves solvent extraction, radioactive by-products, and high costs: producing 1 kg of neodymium can emit ~75 kg of CO₂. These hurdles, combined with regulatory bottlenecks, have left India with resources on paper but limited production on the ground.
Early Steps Toward Self-Sufficiency
Recognising the vulnerability, India has begun moving on multiple fronts:
- Policy Moves: Amendments to the Mines and Minerals Act and the launch of the National Critical Minerals Mission (2025) aim to accelerate exploration and auction of critical mineral blocks. A proposed INR 5,000 crore Production-Linked Incentive (PLI) scheme is designed to attract magnet-manufacturing investment.
- Public Sector Initiatives: Indian Rare Earths Limited (IREL) is expanding operations, but leadership gaps and slow decision-making have constrained execution. Its current targets envision just 900 tonnes of Nd production by 2030.
- Industry Action: Midwest Advanced Materials (Pune) is developing neodymium-based permanent magnets with Technology Development Board support, while Ashvini Rare Earths has established a TRL-7 pilot plant for Nd-Pr extraction. Gujarat’s Trafalgar Group plans to scale magnet production to 5,000 tonnes annually by 2030.
- Exploration Pipeline: Deposits are being mapped in Rajasthan (Balotra, Sirohi), Arunachal Pradesh (Papum Pare), and Madhya Pradesh (Singrauli). Secondary sources such as coal by-products and monazite sands in Kerala and Odisha also hold promise.
The Road Ahead: From Dependency to Leadership
For India, the challenge is not about geological reserves, but about speed, scale, and strategy. Three pillars define the way forward:
- Resource Utilisation – Streamline exploration and refining capacity while addressing environmental and social concerns. Public-private partnerships and technology collaborations will be key to unlocking reserves.
- Technology Independence – Invest in R&D for advanced refining, rare earth recycling, and alternatives to heavy rare earths. With recycling rates globally below 5 percent, circular models could provide India with a competitive edge.
- Geopolitical Leverage – Build alliances with Japan, the U.S., and Australia to diversify supply chains, while positioning India as a regional hub for critical mineral processing.
Conclusion: Turning Disorder into Direction
China’s rare-earth dominance is the product of decades of planning. India is only beginning to align exploration, processing, and industrial policy, but time is short. Without a coherent national strategy, India’s EV and clean energy goals risk being constrained by external supply shocks.
The lesson is clear: overdependence is a strategic risk. To secure its ambitions, India must accelerate domestic capability, scale innovation, and forge global partnerships. Only then can the country turn today’s disorder into a deliberate path toward rare-earth resilience and leadership.
- Niyati Ahuja, Market Analyst at Customised Energy Solutions (CES) and Monami Dey, Industry Research Manager at CES
please contact: contact@energetica-india.net.
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