Will India be able to put up some semblance of competition against China’s rare earth monopoly?
There are several reasons for this:
- The changed global geopolitical scenario
- Monopolistic China not having been an “ideal exporter” of rare earths
- India and Japan cozying up to each other in this field
(In news just broken by the WTO, “China, at the Dispute Settlement Body meeting on 10 July 2012, said it was not in a position to accept the establishment of a panel requested by the United States, the European Union and Japan regarding its measures related to the exportation of rare earths, tungsten and molybdenum.”)
In 2011, China’s rare earths production output was said to be 120,000 tons, which is about 97 percent of the world’s total. The rest was India’s. The US, Russia and Australia have some of the world’s largest REE deposits, but make hardly any dent into China’s production capacity.
India’s Rare Earths Track Record
One needs to say this about India. Despite having lesser reserves than let’s say the US or even Russia, it’s a far larger producer of rare earths today than these countries. There used to be a time when the US was a world leader, but slipped due to environmental reasons and cheap imports from China.
India’s efforts at producing REE can best be described as “….in fits and bursts.” Various reasons are attributed to this lackluster performance – no access to technology, and a protectionist environment that, more often than not, forced its critical industries to depend on high-technology imports. The country did establish the Indian Rare Earths Limited (IREL), a Public Sector Undertaking, way back in the 1950s, but the foray has not developed into something of the magnitude that was envisioned.
Then, last year, the Indian government, perhaps awakening to the fact that the world was egging it on to take on China in this sector, announced a new rare earths policy with a five-year term. The aim is to triple its REE output by 2017.
For now, India’s REE plan looks more inward-looking than export-focused.
This article concludes in Part Three tomorrow.