Rare Earth Latest News
- China’s one-year pause on export controls offers only temporary relief to global rare earth users, serving merely as a brief window to recalibrate strategies before Beijing tightens its grip again.
- Japan provides a proven model for resilience. Having faced China’s coercive export tactics long before others, Japan strengthened its supply chains by diversifying sources, investing in alternatives, and preparing for disruptions — emerging as the first warning signal of China’s growing dominance in the rare earth sector.
China’s 2010 Rare Earths Blockade: A Wake-Up Call for Japan
- In 2010, after a collision involving a Chinese fishing boat and Japanese coast guard vessels, China halted rare earth exports to Japan.
- This created panic in Japan’s automobile industry, which relied heavily on rare earth magnets and imported nearly 90% of these minerals from China.
- Though the dispute was later resolved, rare earth prices skyrocketed tenfold within a year, exposing Japan’s extreme vulnerability and triggering its long-term push for supply chain resilience.
Japan’s Multi-Pronged Strategy for Rare Earth Security
- Japan responded to China’s 2010 export halt by stockpiling rare earths, boosting recycling, and rapidly diversifying supply chains.
- It invested in mines in Australia and Vietnam and achieved 60% independence in critical minerals and fossil fuels by 2022.
- Japan continues to import rare earths from China mainly for advanced materials but is now building resilient networks, forming global partnerships, and encouraging recycling and alternative technologies.
Japan’s Self-Reliance Package: Reducing Dependence on China
- Japan’s strategy includes cutting rare earth usage through new technologies, developing alternative materials, expanding recycling infrastructure, investing in overseas mines, and maintaining strategic reserves.
- This multi-layered policy approach shows that no single solution can reduce vulnerability; instead, long-term planning, diversification, and strategic stockpiles are essential.
China’s Expanding Global Control Over Rare Earths
- China’s dominance is growing: its share in global rare earth mining rose from 38% (2020) to 70% (2023), supported by investments in Africa and Latin America.
- It also controls processing capacity in Malaysia and stakes in Australia’s Lynas.
- This consolidation threatens global supply chains, especially in energy transition technologies and defence applications.
Implications for India: Limited Immediate Impact but Long-Term Challenges
- China’s restrictions will not severely affect India now, but India needs a refreshed strategy as demand rises.
- India possesses significant rare earth reserves of about 6.9 million tonnes, mainly in Odisha, Andhra Pradesh, Tamil Nadu and Rajasthan.
- Despite being among the world’s top five holders, India’s output remains very small — only 2,700 tonnes of rare earth oxides in 2023, compared to China’s 2,24,000 tonnes.
- Although India has strong potential, especially for mineral and defence applications, exploration has been slow and conservative.
- Recent reforms now aim to boost private sector participation in exploring and extracting critical minerals, signalling scope for future expansion.
- Production has begun to rise, reaching 2,900 tonnes in 2023–24 and projected to grow to around 5,000 tonnes in coming years, a sharp increase from earlier years producing under 1,000 tonnes.
- However, risks persist as China tightens its global control over rare earth mining and supply chains, posing potential supply crunch challenges.
Global Response: US and EU Push for Self-Sufficiency
- The US is stockpiling magnets and rare earths while investing in processing facilities.
- The EU is expanding its list of critical minerals and aiming for higher domestic production.
- Germany is stockpiling deep-sea metals, and companies like Solvay are scaling up processing in Europe.
- Together, these efforts aim to reduce long-term dependence on China.
Rare earth FAQs
Q1: How did Japan respond to China’s 2010 rare earth blockade?
Ans: Japan diversified rare earth sources, increased recycling, invested in mines abroad, built strategic reserves, and reduced dependence on China after the 2010 export halt.
Q2: Why is China’s dominance in rare earths a global concern?
Ans: China controls most rare earth mining and processing, creating risks for global supply chains in energy transition, defence systems, electronics, and semiconductor manufacturing.
Q3: What makes Japan’s rare earth strategy effective?
Ans: Japan uses a multi-pronged approach—stockpiling, recycling, technology innovation, alternative materials, and overseas mining investments—to ensure long-term supply chain resilience.
Q4: What challenges does India face in rare earth production?
Ans: India has large reserves but limited output due to slow exploration. Production is rising, but dependence risks remain as China tightens global rare earth control.
Q5: How are the US and EU reducing reliance on China’s rare earth supply?
Ans: The US and EU are stockpiling rare earths, expanding critical mineral lists, boosting domestic processing, and investing in alternative supply chains to ensure long-term security.
