Rare earth supply now key concern after China curbs exports: Companies nudged to build critical mineral capacity

The government is nudging the private sector to develop critical mineral processing capabilities as part of its efforts to secure domestic supplies of rare earths amid global supply chain uncertainties.

The mines ministry has held a series of discussions over the past month, with more planned to assess the support industry needs as the technology for processing has to be developed from scratch.

"We have conducted three rounds of discussions in the last month with private players," a government official told ET on condition of anonymity, adding that the idea is to understand how the Centre can help them set up processing units.



Supply of rare earths, which are critical for high-tech applications ranging from solar panels to smartphones and electric vehicles to defence systems, has emerged as a key concern for the local industry following curbs imposed by China on their exports.

India is also planning to stockpile reserves of rare earth minerals to protect the domestic industry from supply chain disruptions.

The Union cabinet recently approved the National Critical Mineral Mission, under which the government has earmarked ₹500 crore to incentivise the establishment of mineral processing parks using existing infrastructure.

The government will incentivise private players to set up mineral processing units in these parks and to help them develop technology, the official said. The programme will focus on "building domestic critical minerals processing capabilities", with emphasis on fostering research and development for beneficiation and processing of critical minerals, mineral reagents and electrolytes.

Besides, the government is in discussions with academic institutions to see if some tech tie-ups can be forged between them and companies.

"We have to build the technology from scratch to process critical minerals. The goal through these meetings is to get a pulse on the current situation with respect to processing capabilities," said the official.

Industry experts said that developing technology indigenously will take some time and that in the short term India could look at technology available in other countries.

Terming collaborations such as the one with the UK to develop technology for extracting and processing critical minerals steps in the right direction, they said the pace needs to pick up.

The mines ministry has so far conducted five tranches of auctions, putting 55 critical and strategic mineral blocks under the hammer, of which 34 have been successfully awarded.

Last month, the government launched the sixth tranche of auctions for additional blocks.