India Looks To Keep Domestic Rare Earth Supply at Home

Following the disruption to the global rare earth supply chain after China’s export curbs, India is now looking at ways to keep its own rare earths at home.

The government has asked state-owned minerals and metals mining enterprise IREL (India) Limited to halt a more than a decade-old supply agreement to export rare earth elements to Japan, Reuters reported on Friday, citing sources with knowledge of the development.

But the idea to stop supply to Japan may not be immediately feasible because it is part of a bilateral government deal, one of Reuters’ sources said.

IREL has an agreement with Toyotsu Rare Earths India Limited, a unit of Japan’s trading house Toyota Tsusho, to supply it with rare earth concentrate. Toyotsu Rare Earths processes the minerals for export to Japan, where the processed rare earths are used to make magnets.

After China’s controls and curbs of exports of rare earths affected global supply chains, India is eager to develop a domestic processing industry, the sources told Reuters.

India’s government says that Rare Earth (RE) resources in India are reported to be the fifth largest in the world, although the resources are mainly of the so-called light rare earths. The country has facilities for mining, separation, and refining in oxide form, and has also developed capability of metal extraction. However, India lacks industrial scale facilities to make alloys, magnets, and other products from rare earths.

The Chinese export restrictions for rare earths from April reverberated through global supply chains and were initially felt in the automotive industry, where major car manufacturing associations warned that production and assembly lines are being idled due to a bottleneck in magnet and rare earth supply.

India wasn’t spared from the supply chain disruptions. So the government is considering how India could launch production of rare earth magnets via IREL, or to collaborate with the private sector to build domestic rare earth processing capacities, sources told CNBC-TV18 earlier this week.

By Charles Kennedy for Oilprice.com

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