India sits on the world’s fifth-largest rare earth element (REE) reserves — nearly 7 million tonnes — but remains a bystander as China’s export chokehold tightens, as auto giants ring alarm bells. Untapped monazite sands in Odisha, Tamil Nadu, and Kerala – and expected deposits in Rajasthan, Uttar Pradesh and Karnataka – hold immense potential. Yet, India’s mining lags, crippled by lack of commercialisation of processing technology.

The US Geological Survey pegs India’s mineral reserves at 6.9 mt, third largest after China and Brazil. As against the reserves, India mined just 2,900 tonnes both in 2024 and 2023.

India’s PSU, IREL (formerly India Rare Earth Ltd) has already entered into dialogues with governments of Vietnam, Oman and Sri Lanka “for cooperation in the field of RE”, it mentioned in an annual report. An action plan for securing tie-ups from Oman is underway; whereas potential for carrying out exploration at Vietnam and an MoU is under consideration too.

With no advanced processing to refine REE oxides, the nation imports what it could produce, with the import bill for motown running into over ₹300 crore, bleeding cash; while global demand for EV magnets and high-tech components soars.

China’s 70 per cent grip on REEs fuels urgency, but India’s response — policy tweaks, mineral auctions, and ongoing tech tie-ups — feels sluggish against a $9.6 billion market juggernaut by 2027.

“Though from the stages of metal extraction onwards, the sector is under free category, industry in the intermediate segment have not been established due to non-availability of technology,” Parliament was informed way back in 2023.

China’s export ban from April – imposed on seven minerals that include seven REEs that include dysprosium, gadolinium, lutetium, samarium, scandium, terbium, and yttrium. These elements are crucial for various industries, including electronics, defence, and electric vehicles.

There is no export ban or restriction on neodymium, and praseodymium shipments.

Present REE reserves

As per a report presented before Parliament in 2023, India has 13.07 mt in-situ monazite, containing 55-60 per cent total rare earth elements oxide resource occurring in the coastal beach placer sands in parts of Kerala, Tamil Nadu, Odisha, Andhra Pradesh, Maharashtra and Gujarat and in the inland placers in parts of Jharkhand, West Bengal and Tamil Nadu.

More than 80 per cent of the usage of rare earths in value terms is in RE permanent magnets, which require Magnetic REE i.e. neodymium, praseodymium, dysprosium and terbium. These are precious REE since they find use in energy transition initiatives.

High value REE are dysprosium and terbium which are not available in extractable quantities in Indian reserves, which are already under-exploitation.

In Indian deposits, only neodymium and praseodymium are available and are being extracted up to 99.9 per cent purity level. Neodymium and praseodymium occur in the beach sand mineral ore of Indian deposits to the extent of 0.0011 to 0.012 per cent.

Minability of REE is further constrained due to CRZ regulations.

Other possible reserves

The Geological Survey of India (GSI) has been carrying out mineral exploration across the country - with studies being categorised as reconnaissance surveys (G4), preliminary exploration (G3) and general exploration (G2).

In FY22 and FY23,GSI had taken up three reconnaissance stage projects for Rare Earth Elements including neodymium in Sirohi and Bhilwara districts of Rajasthan.

In FY22, exploration works were carried out in 10 blocks in the State; 13 blocks in FY23; 12 in FY24, and 16 blocks in FY25 (provisional data). All explorations are in G4 or G3 stages, as per the report presented before the Parliament.

The Parliament was informed earlier this year that the Department of Atomic Energy has explored 1,11,845 tonne in-situ Rare Earth Elements Oxide (REO) in hard rock terrains in parts of Balotra (erstwhile Barmer) district, Rajasthan.

So far, one REE block has been auctioned in Uttar Pradesh to Hindustan Zinc and one more in Karnataka to Ramgad Minerals and Mining Ltd. Composite mining licences - exploration and commercial usage – permissions were granted, as per Mines Ministry official

IREL: Tech provider

In India, Indian Rare Earths Limited (IREL), a public sector undertaking under the Department of Atomic Energy, is the primary entity responsible for mining and processing rare earth elements in India.

The PSU has a production capaity of 600,000 tonne per annum and its production also include minerals like ilmenite, rutile, zircon, sillimanite, and garnet. I

IREL operates multiple mining sites and processing plants, including OSCOM (Odisha Sands Complex in Chatrapur) in Odisha, Manavalakurichi in Tamil Nadu, and Chavara in Kerala.

In its FY24 annual report, the company said, mineral production stood at 5.31 lakh tonnes, up 3.3 per cent year-on-year. The company mentioned that operations in high pure rare earths plant’s refining division witnessed a decline of 9 per cent y-o-y because of “lack of domestic mid-stream industry in the sector”.

In FY24, the company’s cash flow statement showed an operating profit of ₹1,197 crore (vs ₹1,108 crore in FY23); and revenue stood at ₹2,105 crore (vs ₹1,898 crore). Comprehensive income was ₹1,009 crore in FY24 (vs ₹807 crore). Profit after tax was ₹1,012 crore (vs ₹808 crore).

Available Tech

At present, there are two technologies that India is trying to push for commercial use. One is by IREL which has been shared withHyderabad-based Midwest Advanced Materials Private Ltd.

Midwest plans to start commercial production of magnets in India for EVs, “at least six months from now”, a senior government official said. The company will establish an integrated production module for rare earth magnets, starting with oxides. There is an initial production target of 500 tonnes per year of magnets. The long term plan is to have a production target of 5,000 tonne per annum capacity by 2030.

The second technology is owned by BARC which is yet to get get commercial takers.

Published on June 12, 2025