With a focus on bolstering domestic manufacturing, India is embarking on an ambitious plan to develop its rare earth materials sector. These materials are vital for electric vehicles (EVs) and defense equipment. Currently, a significant portion of India’s demand is met through imports. A new report by Primus Partners, ‘From Extraction to Innovation,’ details strategies to boost the local production of rare earth magnets, aligning with the government’s ‘Make in India’ initiative.
The report recommends five key actions. First, offering long-term price assurance for NdPr oxide and NdFeB magnets is crucial to encourage industry investment and production. Second, establishing pilot hubs in mineral-rich states will facilitate research and production. Third, the production capacity of Indian Rare Earths Limited (IREL) needs rapid expansion to ensure a strong domestic supply. Fourth, creating a National Magnet Stockpile is proposed to meet the rising future demand. Fifth, a central cell within NITI Aayog or DPIIT should be established to oversee the implementation of these strategies.
Recent government actions include the removal of customs duties on key minerals in the 2024-25 budget. Additionally, IREL’s Rare Earth Permanent Magnet (REPM) plant in Visakhapatnam, with a capacity of 3,000 kg annually, commenced operations last year, representing an investment of approximately 197 crore rupees.
China currently controls about 90% of the global rare earth magnet production, making the world dependent on its policies. Although India possesses mineral reserves, it has limited capabilities in extraction and processing. Exploration efforts are underway in various states including Jammu and Kashmir, Rajasthan, Jharkhand, and Karnataka.
India aims for 30% EV penetration by 2030 and net-zero emissions by 2070. Each EV requires about 2 kg of NdFeB magnets. Projections indicate India’s demand could exceed 7,000 tons by 2030. The demand isn’t limited to the EV sector but also extends to renewable energy, automation, and defense sectors, all vying for these essential materials.