Despite possessing the world’s fifth-largest reserves of rare earth elements (REEs), India may continue to keep these critical minerals under tight government control, limiting private sector participation. According to recent reports, the Centre is unlikely to allow private mining of REEs that are associated with radioactive materials like uranium and thorium, citing national security and environmental risks.
🛑 Why Private Mining May Be Restricted
In a high-level meeting involving the Department of Atomic Energy (DAE), NITI Aayog, and the Ministry of Mines, officials reaffirmed that only REE deposits free from radioactive content can be mined by private players. The 2023 amendment to the Mines and Minerals (Development and Regulation) Act supports this stance, reserving radioactive-linked REE mining for state-owned agencies.
“The mining of REE minerals containing radioactive content is best handled by state-owned agencies to mitigate risks and ensure national security,” said a senior official.
🏭 India’s Current REE Landscape
- Indian Rare Earths Ltd (IREL), under the DAE, is the sole significant REE producer in India
- Operates extraction and refining facilities in Odisha and Kerala
- Mined only 2,900 metric tonnes of REEs in 2024—just 0.74% of global output
- India holds an estimated 6.9 million metric tonnes of REE reserves
⚙️ Impact on Industry and EV Sector
India’s electric vehicle (EV) and defence sectors are heavily reliant on rare earth magnets, most of which are imported from China. In FY25 alone, India imported over 53,000 metric tonnes of rare earth magnets. With China tightening export norms, Indian automakers like Maruti Suzuki, Bajaj Auto, and TVS Motor have warned of production slowdowns due to supply shortages.
🔍 Exploration and Future Outlook
The Atomic Minerals Directorate is actively surveying new REE deposits across coastal and inland regions. However, India’s REE ores are often low-grade and technically challenging to process due to radioactive contamination.
While the government is also exploring international partnerships and domestic magnet manufacturing incentives, the cautious approach to private mining may slow down India’s ambitions to become self-reliant in critical minerals.
Stay tuned for more updates on India’s critical minerals strategy.
