China’s export restrictions on rare earth minerals could work to India’s advantage

Around 80 years ago, in an assertive move, India had imposed restrictions on the export of rare earth-rich monazite sands to the US. As one of the largest global producers of rare earth minerals at the time, New Delhi’s actions caused consternation in Washington given the importance of these minerals to the US’s atomic energy ambitions.

The objective of the export controls by the newly independent Indian government was to build a domestic processing industry and support the country’s industrial ambitions. Despite the initial disruption, this action eventually expedited efforts by the US to look for domestic sources of rare earths which led to the finding of the massive Mountain Pass mine in Nevada and, subsequently, the buildout of the US rare earths industry.

This slice of history has several lessons for Indian – and US – policymakers as they seek to deal with China’s restrictions on the export of seven medium and heavy rare earths and magnets, which is expected to severely disrupt the production lines of automakers, renewable energy developers and the defence industry.

Supplies from China have resumed to some US and European Union companies following diplomatic negotiations, but Indian companies appear to have had no such luck. Maruti Suzuki, India’s largest automaker, is planning to reduce...

Read more

News