The new oil of the 21st century: Rare Earth Minerals powering the future

What are Rare Earth Minerals?

Rare Earth Minerals (REMs) are a group of 17 chemically similar metallic elements: the 15 lanthanides (from Lanthanum to Lutetium) plus Scandium and Yttrium.

Despite their name, they are not “rare” in terms of abundance but are rarely found in economically exploitable concentrations.

Extracting and processing them is technologically complex and environmentally challenging, making them strategically significant.

Why are they important?

1. Strategic resource: REMs are essential for high-tech, defence, renewable energy and electronics sectors.
2. Geopolitical value: China controls 60–70% of global production and refining, giving it leverage in international trade.
3. Technological sovereignty: Nations depend on REMs for future technologies like EVs, wind energy, robotics, AI-driven devices.
4. Dual use: Found in both civilian products (smartphones, batteries) and defence systems (missiles, stealth aircraft).

Uses of Rare Earth Minerals

Electronics: Smartphones, laptops, semiconductors.

Renewable energy: Magnets in wind turbines, solar panels, lithium-ion & hydrogen fuel cells.

Defence & space: Guidance systems, jet engines, night-vision devices, satellites, radar.

Medical: MRI machines, lasers, cancer treatment drugs.

Green tech: EV batteries, catalytic converters (pollution control).

Science & technology perspective

Material science: REMs are critical in developing permanent magnets, phosphors, catalysts, and alloys.

Energy transition: Key to decarbonization and achieving net-zero goals—especially in EVs and renewable power.

Research frontiers: Focus on recycling REMs, developing synthetic substitutes, and exploring deep-sea mining for sustainable extraction.

Challenges

• High environmental costs of mining
• Geopolitical supply chain vulnerabilities
• India’s limited production despite having reserves

Relevance for India

• India has significant deposits (Andhra Pradesh, Jharkhand, Kerala, Odisha, Tamil Nadu)
• Indian Rare Earths Limited (IREL) is the PSU handling extraction
• Under Atmanirbhar Bharat and National Mineral Policy, India is investing in exploration, strategic reserves, and international partnerships to reduce dependence

Key takeaway for UPSC

Rare Earth Minerals are the oil of the 21st century powering defence, digital and green revolutions. Control over them will determine technological leadership, economic competitiveness, and national security in coming decades.

WHY RARE EARTHS IN NEWS

China tightens grip on Rare Earths: What the new rules mean

China has unveiled new interim regulations that strengthen state control over the mining, refining and trade of Rare Earth Minerals. The rules, released by the Ministry of Industry and Information Technology, require companies to obtain government approval, follow production quotas and accurately report their handling of rare earth products. Non-compliance will invite legal penalties and reduced quotas.

Why the controls?

Rare Earths are not truly scarce, but economically viable deposits are limited. China’s dominance in refining technology and supply chains has given it unmatched leverage. The new measures align with Beijing’s twin objectives:

• National security: Preventing smuggling and military-linked exports.
• Strategic leverage: Responding to U.S. trade and tech restrictions, while safeguarding long-term control.

Beijing has previously adjusted export approvals depending on its trade relations, reflecting its use of rare earths as a geopolitical tool.

China’s dominant role

China controls 90% of global processing capacity, though it mines about 70% of Rare Earths. It also imports ore from countries like Myanmar for refining, while restricting the export of separation and smelting know-how—ensuring other countries remain dependent. In 2024, the US sourced 70% of its rare earths directly from China, underlining its vulnerability.

Implications of new rules

The regulations centralise licensing, enforce stricter environmental standards and expand state oversight of the sector. However, China has left production quotas and specific export limits vague, giving it flexibility to adjust supply in response to international pressures.

In essence, China is signaling that it will remain the gatekeeper of global rare earths, with the power to dial up or restrict access depending on political and economic needs.