Ambition, bottlenecks and geopolitics form India’s proposed ‘Rare Earth Corridor’ | USAEMALL.com

The absence of heavy rare earths presents a structural limitation.

EY’s Gupta noted that 60 to 70 per cent of heavy rare earth supply currently originates from Myanmar, much of which is processed in China. 

“That supply is very restricted. (Heavy rare earth) is there in Myanmar, there’s some of it in China, which is also a choke point,” said Gupta.

India imported between 80 and 90 per cent of its rare earth magnets and related materials from China in the financial year ending March 2025, amounting to about US$190 million, according to government data. 

To reduce such dependence, the Indian government has pursued overseas resource acquisition. In 2019, it set up Khanij Bidesh India Limited (KABIL), a state-owned joint venture company tasked with securing critical and strategic mineral assets abroad to ensure a stable supply for domestic use. 

In January 2024, KABIL signed an agreement with Argentina for lithium exploration and mining projects, and has reportedly been in discussions regarding lithium assets in Australia. 

Raju said similar overseas arrangements elsewhere could be explored for rare earths.

More recently, India held discussions with Brazil, Canada, France and the Netherlands on cooperation in exploration, extraction, processing and recycling of critical minerals, with a focus on rare earths, according to a Reuters report on Feb 10.

Another major constraint is radioactivity. Rare earth beach sands often contain thorium, a radioactive metal, bringing mining under atomic energy regulations. 

Priyadarshi explains that the presence of monazite – a thorium-bearing mineral – historically led to India’s beach sand deposits being classified as “prescribed substances”. 

This designation mandated strict oversight by the Atomic Minerals Directorate (AMD) under the DAE, effectively restricting private sector participation due to the strategic sensitivities surrounding nuclear materials.

This means government-backed entities will continue to dominate mining, while private players are likely to focus more on processing and downstream manufacturing. 

That would leave private players reliant on state-run mining operations for raw materials – operations that, according to local reports, have faced delays in the past.

At present, India has only one operational rare earth mine in Andhra Pradesh, run by the state-owned IREL – formerly India Rare Earths Ltd.

Coastal regulations add further complexity. Monazite occurs in areas governed by Coastal Regulation Zone rules, as well as mangrove and habitation protections.

Even where deposits are identified, timelines for mines to become operational remain long. 

Greenfield exploration alone can span three years, Priyadarshi noted, while the subsequent “regulatory matrix” of environmental and techno-economic clearances can add another two to five years before private players can begin mining operations.

MINING IS THE EASY PART

All experts CNA spoke to were clear on one point: mining is only the beginning.

“The heart of the rare earth supply chain is processing,” said Raju, noting that China’s real advantage lies not just in mining but in decades of metallurgical refinement. This includes acid leaching, solvent extraction and highly customised separation technologies. 

Unlike iron ore or copper, rare earth separation is not standardised. 

“Kerala sands differ from Odisha sands,” Raju explained, adding that each deposit requires tailored extraction chemistry. 

“The processing technology also varies. If one develops the technology, it may not be suited for another location’s REE (rare-earth elements) oxides.”