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Rare earth magnet scheme gets longer bid window

The Centre has extended the deadline for companies to submit bids under its proposed rare earth magnet manufacturing incentive scheme to July 29, giving the industry additional time to participate in a programme aimed at reducing India’s dependence on imports.

The scheme is part of the government’s broader strategy to build domestic manufacturing capacity for rare earth magnets, which are essential components in electric vehicles, wind turbines, consumer electronics, defence equipment and several high-tech industries. At present, India relies heavily on imports, particularly from China, for these critical materials.

The deadline extension comes after industry players sought more time to prepare proposals and study the scheme’s guidelines. Officials believe the additional window will encourage wider participation and help attract more manufacturers to invest in the sector.

The proposed incentive programme is expected to support companies that manufacture high-performance rare earth magnets within India. By encouraging local production, the government hopes to strengthen supply chains, improve self-reliance and reduce the risk of disruptions caused by global geopolitical tensions or export restrictions.

Rare earth magnets are considered strategically important because they are used in products ranging from smartphones and electric motors to advanced defence systems. As global demand for clean energy technologies and electric mobility continues to rise, countries are increasingly focusing on securing reliable supplies of these critical materials.

The government has identified critical minerals and advanced manufacturing as priority sectors under its industrial policy. The rare earth magnet incentive scheme is expected to complement these efforts by encouraging domestic production and attracting fresh investments.

With the revised deadline now set for July 29, officials hope more companies will come forward with proposals, paving the way for a stronger domestic rare earth magnet industry and reducing India’s dependence on overseas suppliers in the years ahead.

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US takes 10% stake in rare earth miner $1.6 bn deal

The Trump administration has moved to strengthen domestic supply chains for critical minerals by agreeing to acquire a 10 per cent stake in USA Rare Earth in a deal valued at $1.6 billion, according to media reports.

The investment is part of a broader push to expand US-based rare earth mining and processing, reduce dependence on China, and secure materials vital for defence, clean energy, electric vehicles and advanced electronics.

Under the proposed arrangement, the US government will receive equity and warrants in USA Rare Earth, alongside providing significant debt financing. Reports indicate that the funding package includes about $1.3 billion in federal loans, with the remaining amount coming through direct equity participation. The financing is expected to be supported by federal programmes aimed at strengthening strategic industries.

USA Rare Earth is developing a rare earth mine at Sierra Blanca in Texas, in partnership with Texas Mineral Resources. The project is expected to begin production by 2028 and will focus on heavy rare earth elements, which are especially important for defence and high-performance technologies.

In parallel, the company is setting up a magnet manufacturing facility in Stillwater, Oklahoma, scheduled to start operations later this year. The plant will produce permanent magnets used in electric motors, wind turbines, military equipment and consumer electronics. Together, the mine and magnet facility are designed to create a fully domestic “mine-to-magnet” supply chain.

Rare earth elements consist of 17 minerals that are critical to modern technology but are largely processed and refined in China, which currently dominates global supply. US officials have repeatedly warned that this concentration poses economic and national security risks.

The investment in USA Rare Earth marks one of the largest federal interventions in the rare earth sector so far. It follows similar government actions aimed at supporting critical mineral producers and ensuring long-term supply security.

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India’s rare earth reserves high, production still low

India ranks third globally in rare earth reserves, with approximately 6.9 million tonnes of rare earth oxides (REO), trailing only China and Brazil. Despite this, the country’s actual production is extremely low, highlighting a wide gap between its resource potential and output.

In 2024, India produced just 2,900 tonnes of rare earth elements (REEs), placing it seventh in global production rankings, far behind China, which produced about 270,000 tonnes, and the United States at roughly 45,000 tonnes. Other moderate producers include Myanmar, Australia, Thailand, and Nigeria, each producing around 13,000 tonnes. India’s global share in rare earth production is below 1%, despite accounting for 6–7% of global reserves.

The report identifies several factors behind this underperformance. Most of India’s reserves are in monazite-rich coastal sands, which contain thorium, a radioactive element. This has led to strict regulatory controls, slowing exploration and extraction. Historically, rare earth mining was largely conducted by Indian Rare Earths Limited (IREL), where rare earths were treated as by-products rather than strategic resources, limiting focused development.

Another major constraint is processing capacity. Global rare earth refining is dominated by China, which controls around 90% of processing capacity, particularly for heavy rare earths used in advanced technologies. India lacks sufficient processing infrastructure, meaning most extracted material cannot be refined domestically. This dependence on imports limits value addition and prevents India from establishing a complete REE value chain.

Some steps are being taken to improve the situation. For instance, a Japan-linked joint venture in Visakhapatnam aims to develop rare earth processing capabilities. However, industry experts note that progress remains slow.

Analysts emphasize that without regulatory reform, investment in refining, and a comprehensive domestic value chain, India will continue to underutilize its large reserves. Unlocking the potential of rare earths is seen as crucial for India’s technological self-reliance and competitiveness in global high-tech industries, including electric vehicles, renewable energy, and electronics.

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