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Strategic metals driving the new age of geopolitics & technology
VIKAS KAPOOR
As the world enters an era defined by artificial intelligence, stealth weaponry, and clean energy, Rare Earth Elements (REEs) have emerged as the new strategic resource, the “oil” of the 21st century. Once obscure, these 17 critical minerals now form the backbone of modern defence systems, digital technologies, and the global energy transition.
From fighter jets and submarines to electric vehicles, satellites, MRI scanners, smartphones, and even cancer treatment devices, REEs are at the heart of a tectonic shift in global power dynamics. And at the centre of this high-stakes race for control over REE supply chains lies China, which dominates both production and processing, wielding rare earths as a tool of economic and geopolitical influence.
What Are Rare Earth Elements?
REEs are a group of 17 chemically similar elements divided into Light REEs (e.g., cerium, lanthanum, neodymium) and Heavy REEs (e.g., dysprosium, terbium, yttrium), the latter being rarer and more strategically significant due to their smaller concentrations and limited suppliers.
Despite the name, most REEs are not geologically rare, but are rarely found in economically viable concentrations. Cerium, for instance, is more abundant than gold or silver. The term “rare” reflects the complexity, cost, and environmental impact of extracting and refining them.
These REEs are classified into light REEs which are common & easier to extract and heavy REEs which are found in smaller concentrations, thus making their supply chain more vulnerable & strategically significant. These elements are characterised by their high density, high melting point, high conductivity and high thermal conductance.
Big power houses like China, USA, Israel, India, UK, Turkey, France and others are vying for control over these resources – From Fighter Jets to Submarines, Turbines, Robotics, Electric vehicles, MRI scanners, Cancer treatment devices, Flat screen TVs and smart-phones as well. Right now India’s external dependence on rare earth elements is substantial despite having large reserves available in the country itself. The term “rare” earths, however, is a bit of a misnomer with the
exception of the highly unstable promethium, as these elements are found in relatively high concentrations across Earth’s crust. Cerium is, in fact, the 25th most abundant element in the planet’s crust, more abundant than gold, silver, tungsten, and many other elements which do not enjoy the “rare” tag. There are two main reasons why the tag “rare” is used.
One, although moderately abundant, these elements are not found in large concentrations. This makes them difficult and costly to extract, and thus, challenging to exploit economically.
Two, according to the International Energy Agency, more than 60% of mined rare earth production currently comes from only one country: China. Moreover, Beijing controls more than 90% of the global output of rare earths in the processing stage.
The reliance lies in the production process that uses permanent magnets, which are made from rare earth alloys such as neodymium iron boron and samarium cobalt. These Magnets generate a powerful magnetic force in small components, and are used to power a wide range of military hardware such as generators, missile guidance systems, underwater detectors, anti missile defence shields, radars and satellite communication systems.
Apart from magnets, these specific REEs are crucial for vital functions: Lanthanum, for instance, improves glass clarity for intelligence, surveillance and reconnaissance, while europium is harnessed in LED lights and plasma displays. Gadolinium, samarium and yttrium are used for radar and sonar systems, while communications and avionics systems use dysprosium, erbium, europium, neodymium, and praseodymium. Tanks & Armed vehicles use europium, terbium and yttrium in their mounting systems.
According to a 2022 CAPSS journal, the global demand for REEs is projected to reach 3,15,000 tonnes by 2030. The rising demand, coupled with supply chain risk of China’s dominance, highlights their significant economic & strategic value. The US department of War website says an F-35 aircraft needs about 900 pounds of REEs, where as Arleigh Burke DDG. 51 destroyer requires 5,200 pounds and Virginia – class submarine requires 9,200 pounds of REEs.
India’s dependence (Imports of REEs) on China was 92% in 2019-20 which has come down to 59% in 2023-24 to 699 tonnes out of total usage of 1185 tonnes, not that for rest, we have become self-reliant, as China had many other countries to supply so India’s import volumes made to reduce. While India, US and other countries are working today to diversify and develop supply chain resilience, China already has its next 20 years plan in progress, Despite its R&D strength, the US does not have downstream processing capacity and continue to rely on China, which uses the leverage of its rare earth supplies to impact the US economy. Rare earths are not very rare, but challenges in ensuring the economic viability of extraction and processing mean that one country – China – has effectively monopolised these vital minerals. Now Beijing is using it as lever in its ongoing trade with the US.
While China accounts for approximately 60% of Global REE production, It accounts for 90% of Global REE processing, giving it a massive advantage in the global supply chain. When the US imposed tariffs on China, for instance, China placed export restrictions on US exports of key rare earth metals, forcing the US to negotiate and allow Chinese shipments. Recently found Love of Trump with Pakistan is due to Asim Muneer’s presentation to Trump, allowing production of Rare earth metals in Balochistan, albeit yet to see the pragmatic part on ground.
Starting in 1987, when Deng Xiaoping, considered to be the “architect of modern China”, compared China’s rare earth reserves in Inner Mongolia to West Asia’s oil reserves, the country has built up near-total control of the minerals as part of its wider industrial policy.
It is not that rare earths cannot be found outside China: Brazil has large reserves, so does Australia, and even India. The problem is that most of these countries are not doing all that much in the way of mining. This is driven by both economic viability issues, as well as concerns over the pollution that rare earth mining, an extremely dirty process, causes.
India imported 2,270 tonnes of rare earth elements in 2023-24, up 23% from 1,848 tonnes in 2019-20, according to the Ministry of Mines. Imports from China accounted for 65% of this amount, and another 10% came from Hong Kong. The two sectors that have been badly affected by the Chinese supply curbs in April are the auto industry, especially EV makers, and the electronics sector, highlighting the need for INDIA to urgently build counterbalances, partnerships and resilience. India has opened up its vital mineral sector to private companies in an effort to cut its reliance on China. GOI (Govt of India) in September 2025, held six rounds of auctions, involving 23 blocks in many states for discovery of Rare earths. Out of 55 blocks, 34 have been successfully auctioned in all six rounds, indicating increased private sector participation. India has launched the National Critical Mineral mission (NCMM), 2025, with an allocation of 16,300 crores to cater to 30 critical minerals and plan 1200 explorations projects through the geological survey of India by 2031, focussing on Defence, Aerospace and clean energy sectors. Beyond the NCMM, the India rare earth mission is streamlining regulations and encouraging private investment in mining, refining and magnet production. The mines and minerals (development and regulation) act reform in 2023 opened the sector to private participation, removing elements like niobium and zirconium from the atomic minerals list, which led to over 100 exploration licences being issued to private firms in 2024.
Domestic mining and refining, meanwhile, remains modest, led by state-owned IREL Ltd, which operates a processing unit with a capacity of over 10,000 tonnes per annum. In contrast, China refined over 2 lakh tonnes of REEs in 2023 alone.
The US too is getting back into rare earths processing. The Trump administration is working on an executive order to allow stockpiling of deep-sea metals from the Pacific seabed, aiming to reduce reliance on China for battery minerals and rare earths, the Financial Times reported in April 2025. Japan is one country that has successfully re-entered the rare
earths supply chain after Chinese curbs on Tokyo in the early 2010s.
The US and 10 partners — Australia, Canada, Finland, France, Germany, Japan, the Republic of Korea (South Korea), Sweden, the United Kingdom, and the European Commission — have come together to form the MSP. The new grouping is aimed at catalysing investment from governments and the private sector to develop strategic opportunities.
Industry watchers say that the reason India would not have found a place in the MSP grouping is because the country does not bring any expertise to the table. In the group, countries like Australia and Canada have reserves and also the technology to extract them, and countries like Japan have the technology to process REEs.
“If India is not able to explore and produce these minerals, it will have to depend on a handful of countries, including China, to power its energy transition plans to electric vehicles. That will be similar to our dependence on a few countries for oil,” an economist said.
Way Forward :
1. Policy reforms
Amendment of Mining Laws: The Indian government has made amendments to the current set of laws to boost private sector participation and streamline regulatory approvals. Most notably, minerals such as lithium, niobium, titanium, beryllium, tantalum and zirconium have been removed from the list of atomic materials thereby proving an opportunity to the private sector for further exploration and mining.
2. International Collaborations:
Minerals Security Partnership (MSP): To counter the dominance of China, India has joined the US-initiated MSP so as to secure an alternative supply chain for critical minerals.
Bilateral Agreements: To decouple from China, India has further partnered with Australia, Japan and the United Sates to ensure a viable alternative stream of supply for critical minerals.
These countries are part of the Quadrilateral Security Dialogue (QUAD) arrangement and can work collaboratively. The United States and Australia can provide minerals supply to the QUAD member nations and allies in the Indo-Pacific region.
India can offer an attractive manufacturing ecosystem to its allies where they can avail of affordable EV batteries and solar cells whilst financial backing is provided by the United States and Japan.
3. Domestic Initiatives And Strategic Reserves
India Rare Earths Mission: India has proposed the creation of the ‘India Rare Earths Mission’ — a programme aimed at developing domestic mining and refining capacities. This Public-Private Partnerships (PPP’s): The government is looking at PPP’s to pull in investments in the processing technologies domain.
4. Future Foresight Analysis For India’s REE sector
To anticipate a holistic evolution of the REE sector, India must consider utilising a strategic foresight-oriented approach like the Futures Wheel and Critical Uncertainties Analysis.
5. India’s Rare Earth Renaissance: Paving A Strategic Path to Autonomy
India is at an important juncture of its development journey and the REEs have determining role to play in it. India’s expansive reserves ofREEs presents a golden opportunity to achieve autonomy and reduced foreign dependence in key sectors.
With multiple nations already calling for supply chain diversification of the sector, can India finally stake its claim by establishing technological sovereignty? The potential is there, the will has to be developed.
(THE AUTHOR IS A COLUMNIST AND AGRIPRENEUR)
