In 2010, the world woke up to its dependence on rare earth elements (REEs). The trigger was a geopolitical flashpoint -- China allegedly halted exports to Japan during a territorial dispute. At that time, Beijing supplied 97% of global demand. From the atomic age to the digital revolution, REEs have quietly underpinned the modern world from colour televisions and petroleum refining to today’s satellites and electric vehicles.

Valued at around $5.3 billion in 2021, the global rare-earth market is projected to approach $10 billion by 2026.

Rare Earths through the ages: A shifting monopoly

During World War II, the US and USSR relied on supplies from colonies in India, Brazil, and Africa. By the 1960s, the Mountain Pass mine in California gave the US dominance, supplying minerals vital for nuclear energy and electronics. By the 1990s, the balance shifted east. China rose to dominance along with resource abundance and an industrial strategy built on subsidies, technological advances (Xu Guangxian’s Cascade Theory), and tolerance of environmental costs. Mines like Bayan Obo in Inner Mongolia became synonymous with global supply. The 2010 export crisis proved that REE are not just commodities—they are instruments of power.

A Glimpse of global REE production

China dominates REE production supply 69% of global output with 49% of reserves. The United States, with just 1.6% of reserves, contributes about 12%. India, though holding 8% of global reserves, the fifth largest, produces less than 1%, reflecting its untapped potential.

India’s reserves are concentrated along the eastern and southern coasts — Andhra Pradesh, Odisha, Tamil Nadu, Kerala, and West Bengal, Jharkhand, Maharashtra, and Gujarat. These monazite-bearing sands could anchor India’s clean-energy and defence industries.

Between 2000 and 2020, China doubled its output from 70,000 to 140,000 tonnes, growing steadily at 3.5%. The US increased production, from 5,000 to 38,000 tonnes, a 10.67% surge a year, with output doubling every seven years. While India rose from 2,700 to 3,000 tonnes—an annual growth rate of 0.5%. Thus, China’s share is shrinking, the US is regaining ground, and India remains a “sleeping giant.”

China’s head start & its costs

Today, China’s leadership has come at a grave environmental cost. Unregulated mining in Jiangxi and Inner Mongolia left contaminated water, poisoned soil, and barren farmland — landscapes that may take 50–100 years to recover. The infamous toxic lake near Bayan Obo stands as a stark reminder of the devastating ecological price of unchecked growth. The human toll has been severe -- studies in affected regions report higher incidences of cancer, respiratory illnesses, skin diseases, and birth defects linked to radioactive waste and chemical exposure. Communities living near mines face polluted groundwater, unsafe air, and chronic health crises — making China’s dominance a story of economic power but with deep social and ecological scars.

India’s paradox

Since 1950, the PSU IREL (India) Ltd has been the country’s only REE miner. India mines limited ore but imports most finished products — about 54,000 tonnes of rare-earth magnets in 2024–25 compared to under 3,000 tonnes of domestic production. The reasons include outdated facilities, limited R&D, and historic bans on private participation that stifled innovation. Strict labour and environmental norms also slowed expansion, unlike China’s rapid but unsustainable growth.

To bridge this gap, the government launched the National Critical Minerals Mission (2025) focusing on:

·        Exploration & mining: Over 1,200 projects planned through 2030, with 195 already underway.

·        Processing & value chains: IREL is expanding its Odisha plant to nearly double neodymium production by 2030.

·        International partnerships: Through KABIL, India has signed MoUs with Argentina (lithium) and Australia (REEs).

·        Recycling & Substitutes: Research at IITs is exploring magnet-free motors and recovery from industrial waste streams like fly ash and red mud. Yet recycling is inefficient — dismantling 100,000 iPhones yields barely 11 kg of REEs.

Environmental regulations now require impact assessments, community consultation, and adoption of zero-discharge technologies to avoid repeating China’s mistakes.

For India to achieve mineral self-reliance while ensuring ecological responsibility is both a challenge and an opportunity. The MMDR Act reforms and the NCMM 2025 –2031 underline India’s commitment to build refining and recycling capacity and secure overseas assets through partnerships from Argentina to Australia. Mining and processing, however, generate toxic and often radioactive waste. India must prioritise cleaner technologies and strict oversight to prevent the ecological disasters seen elsewhere. Growth must be grounded in sustainability — for the true measure of progress lies not just in production volumes but in preserving the planet that enables them.

[Srishti Gupta is Assistant Professor, Tata Chair Unit, Institute of Economic Growth; Roshan Soni is MA Economics (F), Delhi School of Economics, Delhi University. Opinions expressed are their own]