'DNA' special: India makes rare earthy pitch to rival China

India may be emerging as a significant contributor to a global effort to challenge China’s stranglehold on Rare Earths – a group of 17 elements that are key to modern technology.

Their absence  could, literally, bring to a halt global production of precision guided missiles, satellite and communication systems, smart phones, hybrid cars, energy efficient lighting, wind turbines and petroleum.

They are not really rare, but are seldom found in high enough concentrations for mining to be commercially profitable.

China commands 97% global monopoly on various stages of RE production, but has only 37% of global RE reserves (US Geological Survey, however, estimates China has half of the world’s reserves — 55 million tonnes).

World consumption, currently estimated to be 136,000 tonnes/year, is expected to reach 185,000 tonnes by 2015. According to USGS ‘Mineral Commodity Summaries, January 2012’, US is estimated to have close to 12% of global reserves — 13 MTs, Australia (1.6 MTs), Commonwealth of Independent States (19 Mts).

India has, so far, regularly attributed RE reserve figures of 2-3%. Latest Indian government statistics, however, show India may well have 9% of global RE reserves — 10.7 MTs.

In 2004, cheap Chinese RE supply had forced India to suspend production.

“We were producing oxide of RE Cerium at a price of Rs 600/kg. China was providing the same for $1.5/kg,” Dr RN Patra, CMD of Indian Rare Earths Limited – a government enterprise under the Department of Atomic Energy (DAE) — told DNA.

Two years prior to that, cheap Chinese RE’s had forced another closure — that of one of world’s largest rare earth mine: Mountain Pass, in California. Incidentally, India was world’s leading RE producer in the 1950s, followed by the US through the 1960s and 1980s.

By 2010, India was importing over 370 tonnes of RE compounds, which is not its actual consumption figure since most REs are imported as finished or semi-finished products.

The global frenzy on RE followed China’s decision in September 2009 to reduce its RE exports (2010-15), citing “environmental concerns” and “preservation of scarce natural resources”. From 65,580 tonnes in 2005 it came down to 30,246 tons in 2011.

China’s decision angered the world as RE prices shot through the roof creating a huge gap between China’s export and domestic prices. Cheap availability of RE in China has compelled a number of RE firms to move base to China.

It was, however, in September 2010 — when China temporarily suspended its RE exports to Japan over a maritime dispute — that the world began to realise the implications of Beijing’s monopoly in this vital sector.

This March, US, European Union and Japan took China to WTO over its RE export policies.

US energy policy specialist Marc Humphries, in a report to the US Congressional Research Service in September 2011, said China’s economic growth and increased demand has prompted it to ramp up for increased production of wind turbines, consumer electronics, and other sectors, which would require more of its domestic RE elements. China is already estimated to be consuming almost 65-70% of the global output of RE.

“In 2007 we had pointed out to the government that we should restart RE production,” said Patra. But DAE then wasn’t interested beyond the Thorium it was getting from Monazite’s.

That’s likely to change. US based Molycorp is reviving the Mountain Pass mine. Lynas Corporation is doing the same with Mount Weld mine in Australia.

By December India will have a Monazite mineral processing plant in Odisha. Monazite is found in beach sand, and is the chief source of RE in India. The government is also making a concerted effort to identify potential RE reserves in India. India is exploring joint development of REs with Japan and other countries.

Summing up the mood in New Delhi, a top strategic expert told DNA, “Whatever China did, it did... But it’s an opportunity for India.”