China Restricts Exports of Rare Earths

Syllabus :GS 3/Economy 

In News

• Recently, China announced restrictions on the export of seven Rare Earth Elements which includes samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium following U.S. President Trump’s tariff impositions.

Rare Earth Elements (REEs)

• They are a set of 17 chemical elements in the periodic table — cerium (Ce), dysprosium (Dy), erbium (Er) etc. All have similar chemical properties and appear silver-coloured.
• Despite their name, they are not as rare as they appear, but concentrated, economically mineable deposits are hard to find. 

• China has dominated the rare earth market since the 1990s, supplying 85-95% of global demand.

Importance 

• Rare Earth Elements (REEs) are crucial in various industries, including clean energy (electric vehicles and wind turbines), electronics (digital displays), and automobile manufacturing (magnets for power steering, windows, and speakers). 
• They are also crucial for manufacturing high-tech products including defense.

Consequences of China’s Export Restrictions

• China dominates the global supply of critical minerals, controlling vast reserves and processing capabilities, including 87% of rare earth processing and major shares in lithium, cobalt, and silicon refining.
  • The new controls are expected to disrupt industries globally reliant on rare earths, leading to higher prices and potential supply shortages.
• As supply tightens, the prices of REEs are expected to surge which could further raise the production cost & overall prices.
• REEs are crucial for manufacturing advanced military technologies like fighter jets (e.g., F-35), submarines (e.g., Virginia and Columbia class), missiles (e.g., Tomahawk)
• The mining process can also cause significant environmental damage, as it releases harmful substances like arsenic and cadmium. 

Status in India 

• India has significant reserves of rare earth elements in the states of Andhra Pradesh, Karnataka, Odisha, and Kerala. The monazite sands in Kerala are particularly rich in REEs.
• India faces acute vulnerability with over 40% dependency on China for six key minerals: bismuth (85.6%), lithium (82%), silicon (76%), titanium (50.6%), tellurium (48.8%), and graphite (42.4%). 
• Despite having significant mineral resources, India lacks the technology to extract minerals like lithium from its own deposits. 

Conclusion and Way Forward 

• REEs’ unique magnetic and optical properties make them indispensable in modern technology.
• In this context, India is working to diversify its supply chain by investing in overseas assets, joining global initiatives like the Minerals Security Partnership, and promoting recycling and research. 
  • However, reducing dependency on China will require long-term investment and sustained efforts.
• There is a  need to develop national policies and implementation strategies for ensuring indigenous supply of REEs. 

Source :IE