China digs in on “rare earth”, commands global market

Paper: GS – I, Subject: Geography, Topic: Resources- World and India, Issue: China’s dominance of Rare Earths.

Context:

Concerns have been raised on China’s domination of the global rare earth supply chain — mining, refining, exports, and R&D.

Key Highlights:

Rare Earth Elements:

• Rare Earth Elements (REEs): 17 elements critical for electronics, defence, green technologies (EVs, wind turbines, solar, semiconductors).
• Despite name, they are not scarce but difficult to extract & process.

China’s Dominance in Rare Earths:

• Reserves: Holds 48.9% of global reserves (USGS 2025).
• Production: Accounts for 65.8% of global mining output.
• Processing Monopoly: Controls 85–90% of refining capacity.
• Exports: Contributes nearly 29% of global rare earth exports.
• Trade Partners: Japan (28%), U.S. (25%), Netherlands (12%) are top importers.
• Export Controls: Recently tightened restrictions on 7 rare earths used in magnets, ceramics, and defence.

Strategic Importance of Rare Earths:

1. Technology & Green Transition:
   1. Essential for EV batteries, solar panels, wind turbines.
   1. Key for achieving net-zero and energy security goals.
2. Defence & Aerospace:
   1. NdFeB magnets used in missiles, fighter jets, radars, nuclear submarines.
   1. Critical for U.S. & India’s security supply chains.
3. Electronics & Industry:
   1. Used in smartphones, semiconductors, steel, ceramics, glass.

Geopolitical Implications:

• Economic Leverage: China uses REEs as a tool of strategic coercion (e.g., 2010 export ban against Japan).
• Dependency Risk:
  • U.S. is world’s 2nd largest importer.
  • India imports 75% of REEs from China despite having 7.7% of reserves.
• Supply Chain Weaponisation: Export curbs could disrupt global clean energy and defence industries.
• Strategic Competition: China consolidating its role while others (India, U.S., Australia, Japan) are seeking to diversify supplies.

India’s Position:

• Reserves: 7.7% of global rare earth reserves (coastal monazite sands in Kerala, Odisha, TN).
• Import Dependence: 75% imports from China.
• Institutions: Indian Rare Earths Limited (IREL) under DAE manages exploration & extraction.
• Strategic Need: Secure REEs for 500 GW renewable energy target by 2030, electronics & defence.

Way Forward:

Conclusion:

China’s near-monopoly in rare earths makes them the “new oil” of the 21st century. For India, ensuring REE security is vital for energy transition, digital economy, and defence preparedness. A mix of domestic resource development, global partnerships, and R&D investment is essential to reduce dependence and enhance strategic autonomy.

https://www.pressreader.com/india/the-hindu-hyderabad-9WW7/20250910/281865829610003?srsltid=AfmBOoqeZhvH9HD3WXpGphME8l5S85Kx5eAWW5UwM8eim0uUcM0ik3Bb

La Excellence IAS Academy, the best IAS coaching in Hyderabad, known for delivering quality content and conceptual clarity for UPSC 2025 preparation.

FOLLOW US ON:

◉ YouTube : https://www.youtube.com/@CivilsPrepTeam

◉ Facebook: https://www.facebook.com/LaExcellenceIAS

◉ Instagram: https://www.instagram.com/laexcellenceiasacademy/

GET IN TOUCH:

Contact us at info@laex.in, https://laex.in/contact-us/

or Call us @ +91 9052 29 2929, +91 9052 99 2929, +91 9154 24 2140

OUR BRANCHES:
Head Office: H No: 1-10-225A, Beside AEVA Fertility Center, Ashok Nagar Extension, VV Giri Nagar, Ashok Nagar, Hyderabad, 500020

Madhapur: Flat no: 301, survey no 58-60, Guttala begumpet Madhapur metro pillar: 1524,  Rangareddy Hyderabad, Telangana 500081

Bangalore: Plot No: 99, 2nd floor, 80 Feet Road, Beside Poorvika Mobiles, Chandra Layout, Attiguppe, Near Vijaya Nagara, Bengaluru, 560040