The Story So Far
Amid the ongoing U.S.-China trade war, China has imposed export controls on rare earth elements (REEs) and magnets, which are vital for industries such as semiconductor manufacturing and defense equipment production.
These export restrictions apply to any Chinese refinery that exports refined rare earths outside the country.
What are Rare Earth Elements (REEs)?
REEs are a group of 17 elements found in the Earth's crust, including dysprosium, gadolinium, lutetium, samarium, scandium, terbium, and yttrium.
These elements are essential for a variety of industrial applications, such as:
Dysprosium: used in hard disks and car motors.
Gadolinium: used in nuclear reactors and medical equipment.
Lutetium: used in PET scanners and petroleum refineries.
Samarium: used in powerful magnets for electronics.
Scandium: used in aircraft alloys.
Terbium: used in lighting for electronics.
Yttrium: used in cancer treatments and superconductors.
What are China’s Export Restrictions?
China refines nearly all of the world’s heavy REEs.
The restrictions may not be an outright ban but could cause temporary supply interruptions as refiners process new export permits.
What is the Impact on India?
India’s supply chains may not face immediate disruption, though India imports a portion of REEs.
India has 6% of the world’s total REE deposits but lacks the infrastructure to mine and refine them extensively due to environmental concerns.
India’s light REE extraction is done by Indian Rare Earths Ltd through monazite extraction in Kerala.
The Indian government is working to boost both domestic production and imports to manage the supply.
What is the Government’s Plan?
The National Critical Mineral Mission (NCMM) aims to secure the critical mineral supply chain by increasing domestic production and diversifying foreign sources.
The NCMM will involve 1,200 exploration projects, award exploratory licenses, and auction critical mineral blocks to enhance India’s capabilities in this sector.
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