Rare Earths: Why India's Track Record May Stop It From Taking On China

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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.”)

Traditionally, Japan has been China’s largest importer of REE, but lately, this relationship can best be described as “rocky.” The Japanese having started looking elsewhere for their needs. China is today the largest producer of all the 17 elements that make up the rare earths list, and is often criticized as a monopolist by the US and Japan.

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. 

Comments (4)

  1. TKSMURTHY says:

    India’s performance in Rare Earth field is ‘lack lustre’ in every sense. At one time this country was the biggest producer. For various reasons, primarily due to our inability to stand competition from China, fresh production is stopped. At present there is no regular production. We are in no position to stand up to China. That is not a surprise. China not only produces nearly 100,000 tons of REs, it also consumes a good part of it in diverse industries. Even when we were producing we were consuming a negligible part of it. That reflects the  backwardness of our technological development.
    One more weakness is in the state of our technology for production. Most of the time we were producing mixed REs, while for modern technology separated high purity individual REs are required. IREL did make some effort during the last phase of their production to diversify but Chinese competition throttled us.
    In cooperating with japan we can drive maximum advantage if we persuade them to produce high-tech RE products here. Technology would then percolate to Indian industry. 
    Though USA, Australia, Japan and other countries are feeling the shortage of RE due to export restrictions from China, they are now making all out effrts to find alternate sources outside China and produce REs. They may succeed in the next few years. Qualitatively and quantitatively India will be left behind again.
    If at all we are intensifying efforts to explore for REs, they should be directed for finding specific minerals for heavy rare earths. We have enough resources to last for several years for light REs. There is no mention of that important aspect in the report. 

  2. TKSMURTHY says:

    India’s performance in Rare Earth field is ‘lack lustre’ in every sense. At one time this country was the biggest producer. For various reasons, primarily due to our inability to stand competition from China, fresh production is stopped. At present there is no regular production. We are in no position to stand up to China. That is not a surprise. China not only produces nearly 100,000 tons of REs, it also consumes a good part of it in diverse industries. Even when we were producing we were consuming a negligible part of it. That reflects the  backwardness of our technological development.
    One more weakness is in the state of our technology for production. Most of the time we were producing mixed REs, while for modern technology separated high purity individual REs are required. IREL did make some effort during the last phase of their production to diversify but Chinese competition throttled us.
    In cooperating with japan we can drive maximum advantage if we persuade them to produce high-tech RE products here. Technology would then percolate to Indian industry. 
    Though USA, Australia, Japan and other countries are feeling the shortage of RE due to export restrictions from China, they are now making all out effrts to find alternate sources outside China and produce REs. They may succeed in the next few years. Qualitatively and quantitatively India will be left behind again.
    If at all we are intensifying efforts to explore for REs, they should be directed for finding specific minerals for heavy rare earths. We have enough resources to last for several years for light REs. There is no mention of that important aspect in the report. 

  3. TKSMURTHY says:

    India’s performance in Rare Earth field is ‘lack lustre’ in every sense. At one time this country was the biggest producer. For various reasons, primarily due to our inability to stand competition from China, fresh production is stopped. At present there is no regular production. We are in no position to stand up to China. That is not a surprise. China not only produces nearly 100,000 tons of REs, it also consumes a good part of it in diverse industries. Even when we were producing we were consuming a negligible part of it. That reflects the  backwardness of our technological development.
    One more weakness is in the state of our technology for production. Most of the time we were producing mixed REs, while for modern technology separated high purity individual REs are required. IREL did make some effort during the last phase of their production to diversify but Chinese competition throttled us.
    In cooperating with japan we can drive maximum advantage if we persuade them to produce high-tech RE products here. Technology would then percolate to Indian industry. 
    Though USA, Australia, Japan and other countries are feeling the shortage of RE due to export restrictions from China, they are now making all out effrts to find alternate sources outside China and produce REs. They may succeed in the next few years. Qualitatively and quantitatively India will be left behind again.
    If at all we are intensifying efforts to explore for REs, they should be directed for finding specific minerals for heavy rare earths. We have enough resources to last for several years for light REs. There is no mention of that important aspect in the report. 

  4. TKSMURTHY says:

    India’s performance in Rare Earth field is ‘lack lustre’ in every sense. At one time this country was the biggest producer. For various reasons, primarily due to our inability to stand competition from China, fresh production is stopped. At present there is no regular production. We are in no position to stand up to China. That is not a surprise. China not only produces nearly 100,000 tons of REs, it also consumes a good part of it in diverse industries. Even when we were producing we were consuming a negligible part of it. That reflects the  backwardness of our technological development.
    One more weakness is in the state of our technology for production. Most of the time we were producing mixed REs, while for modern technology separated high purity individual REs are required. IREL did make some effort during the last phase of their production to diversify but Chinese competition throttled us.
    In cooperating with japan we can drive maximum advantage if we persuade them to produce high-tech RE products here. Technology would then percolate to Indian industry. 
    Though USA, Australia, Japan and other countries are feeling the shortage of RE due to export restrictions from China, they are now making all out effrts to find alternate sources outside China and produce REs. They may succeed in the next few years. Qualitatively and quantitatively India will be left behind again.
    If at all we are intensifying efforts to explore for REs, they should be directed for finding specific minerals for heavy rare earths. We have enough resources to last for several years for light REs. There is no mention of that important aspect in the report. 

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