INTRODUCTION

Someone has said correctly ‘Oil is the blood; steel is the body; but Rare Earth Elements (REE) is the vitamins of a modern society’. The politics and economics of REE are sporadically discussed in public forums. REE is a password to become a dominant player in world economy and it is a phenomenon whose time has come to rule the roost. A transition from carbon-based economy to electron economy is going to decide an economic prowess of the countries and in this process REE plays prime role. Today, there is hardly any industry which does not require any REE hence dependence on it is high and given the nature of demand for it, REE is becoming crucial commodity like oil/natural gas. From mobile battery to wind turbine, every sector is seeking REE for its existence and to score competitive advantage over peers. 

A BRIEF OVERVIEW

The total number of REE are 17 namely-  cerium (Ce), dysprosium (Dy), erbium (Er), europium (Eu), gadolinium (Gd), holmium (Ho),

 lanthanum (La), lutetium (Lu), neodymium (Nd), praseodymium (Pr), promethium (Pm), samarium (Sm), 

scandium (Sc), terbium (Tb), thulium (Tm), ytterbium (Yb),and yttrium (Y).

International Union of Pure and Applied Chemistry includes one more element scandium in their REE definition.

China, United States, Australia, Russia, Canada, India, South Africa are seven players in the world can be branded as dominant countries in the REE trade. China inter alia is most powerful country. According to encyclopedia Britannica, Chinese deposits of REE accounted for about 80% of the rare earths mined in the world in 2017. The estimate of region wise allocation of these elements is not yet confirmed. However, based on known records, China tops the list with 55%, followed by US (10 to 15%), India & Australia (3% each).

These elements are living unto their sobriquet ‘rare’ as they are not much known in common parlance let alone the clout they enjoy in economic development of countries.  

ECONOMIC & STRATEGIC DOMINANCE

When world economy was dominated by agriculture, the sophistication was merely a chimera and people happened to manage with the traditional methods. The scenario had changed from industrial revolution and furthermore after the invention of internet. Technology is becoming adroit day after day and every invention is going offbeat after few years. Each branch of science including but not limited to Electronics, Mechanics and Chemistry changing with hydraulic velocity and in this fast pace vicissitudes, REE play a crucial role. Following chart speaks for paramountcy of REE.

Application	Rare Earths	Demand Drivers
Magnets	Nd, Pr, Sm, Tb, Dy	Drives for computers, mobile phones, Mp3 players, cameras, hybrid vehicle electric motors for luxury vehicles, Mag-lev trains.
LaNiH Batteries	La, Ce, Pr, Nd	Hybrid vehicle batteries, hydrogen absorption alloys for rechargeable batteries.
Phosphors	Eu, Y, Tb, La, Dy, Ce, Pr, Gd	LCDs, PDPs, LEDs, energy efficient fluorescent lights and lamps.
Fluid Cracking Catalysts	La, Ce, Pr, Nd	Petroleum products- greater consumption by heavy oils, tar sands
Polishing Powders	La, Ce, Nd	Mechano-chemical polishing powders for TVs, monitors, mirrors, silicon tubes (nano particulate form)

The entrenchment of the REE in our day to day life is all pervading and therefore they are becoming a sin qua non not only for industrial establishments but also for households. Any curtailment in the supply of REE would have capacity to leave consumer market high and dry. Fluctuation in prices of REE will reflect into the retail prices of the final product in the market. Hence stability in prices and constant supply of REE must be ensured to achieve sustainable market conditions. These elements have become pivotal in economics of scale too which means a cost-effective marketable product can be produced with the help of REE since these elements are being used as input products in several industries.

A slew of military and defence products also depend on REE for e.g. Night vision goggles, laser range finders, guidance systems, communication, precision guided weapons, stealth technology. In other words, to produce indigenous military products supply of REE should be continuous and producer of REE will play dominant role. Merely by way of choking a supply of REE, countries can be brought to their knees and security of recipient nations can be jeopardized. Defence industry has potential to generate employment and make significant contribution to the economy of nation. Due to its dependency on REE countries have to come to terms with producer of REE where the exact possibility of abuse comes into play.

CHINA A GAME CHANGER

REE market was limited till 1980. However, once China jumped into the competition rules of game changed and importance of REE jacked up year after year. The Mountain Pass in California, till 1980s has been main global source of REE. In 1974, it accounted for 19,900 tons, 78% of global production. Production plunged to a third of global output by 1992 and further to a mere 5% by 2002. The Mountain Pass mine, operating at its full capacity in 1990s, produced 850 gallons of salty waste every minute containing traces of radioactive material. Occasional spilling of this waste into the desert was also reported. California State ordered cleaning up the waste. In 2002, the already struggling ‘Molycorp’ ran out of space to store Mountain Pass waste and as a result, the mine was closed down. The demise of Mountain Pass should be attributed to China.

China has systematically established its dominance in REE sector and credit goes to visionary and resolute leadership of China’s Deng Xiaoping who said “There is oil in the Middle East, rare earths in China” and we need to properly manage our rare earth resources and make the most of our country’s development”

The statement, if interpreted in letter and spirit, speak volumes about the ulterior intentions of China to use REE as weapon to dominate the world on the similar lines of Middle East countries who abused their dominant position in oil market to achieve political, economic and diplomatic objectives. In addition, Deng urged China to avail REE for its own development. His intention was to decimate any black marketing, smuggling of REE in and out of China. By comparing REE with oil he hinted that the REE will be the next raison d'etre in international relations.

Deng Xiaoping’s directives had been followed in China like the Gospel and outcomes became visible by 2017, the year in which China mined 1,30,000 of metric tons equivalent REE which accounted for more than 80% of world’s mined REE. China controls both supply as well as production of REE in world which is rare. REE industry in China grew enormously. The aggregate market capitalization of the top ten US and western Companies put together, account for just about a fifth of the size of one Chinese firm, the Baotou Steel Rare Earth High Technology Company.

Being mercantilist by nature, China which has become a monopolistic producer in the REE sector aligned REE trade with its hunger to become a superpower in the world and started arm twisting. China has brought Japan and USA to their knees in the past by imposing illegal squeeze on supply of REE for which WTO also castigated China. REE were subjected to artificial price manipulations by China to drive out competitors from market with lone object to corner more and more market share. Dependence of world on China for REE is one of the principal reasons as to why China could not be isolated in global trade despite its gray track record on terror funding, human rights violations, military aggressions, illegal land grabbing etc.

WHAT INDIA NEEDS TO DO

Though India is making rapid strides in various sectors, in REE the potential is underutilized. evertheless, Narendra Modi government is catapulting REE in positive direction.

India is importing nearly 100% of its REE despite having 70% of world’s monazite reserves which contain considerable proportion of REE. India could really turn out to be a trailblazer in production and supply of REE if its vast monazite reserves are used to optimum level.

REE, Production to Reserve Ratio (PRR) in India is merely 0.0018% when compared to world PRR which stands at 0.01% which means India lagging behind in utilization of REE. If India improves PRR and matches with world standard 0.1%, she can attract investment over Rs. 1 lakh crores with employment generation for lakhs of Indians.

Narendra Modi government is giving much importance to research, development and production of REE. Japan is interested in dysprosium an REE, used to produce high quality NdFeb magnets used in Head actuators for computer hard disks, Mechanical e-cigarette firing switches, locks for doors, loudspeakers and headphones, mobile phone speakers. Being one of the key exporters of magnets, Japan needs dysprosium. India has not only confined itself to production and supply of dysprosium to Japan but in 2015 India went one step further when IREL (India) Limited, a miniratna company entered into agreement with Japanese company, Toyota Tsusho Corporation for exploration and procurement of mix REE, chloride from state of Orissa, India.

Under Make in India initiative, IREL (India) Ltd. is in the process of setting up a plant producing Rare Earth Permanent Magnet (REPM) at Visakhapatnam based on indigenous technology. This would help country to be an independent developer and supplier of REPM. India is also exploring possibilities of co-operation with Australia in mining and processing of REE such as neodymium, lithium, dydsprosium. The horizon of Indian co-operation with countries other than China in REE exploration, mining, production is steadily expanding.

Notwithstanding the upward trajectory under Modi government, nation needs to run extra miles in REE domain. Today, India’s share in world’s total REE production is merely 3% and India is holding a 5^th position in the world as far as REE reserves are concerned. If India wants to dominate or at least become self-sufficient in this sector, she has to expedite all necessary reforms to optimize production in this sector. REE has potential to earn sumptuous foreign currency besides generating employment.

If India could harness its REE resources to an optimum level, the stature of country would metamorphose from significant global player to dominant giant in the world. India should take initiative at global level to form an alliance of REE producing countries other than China for strategic exploration of REE, stabilization of prices, technology sharing and to provide level playing field for all producers by way of ending monopoly in REE market.

Conclusion

India needs to respond thunderously to gradual shift in global trends in REE by way of increasing the production and expanding supply base. India has to enter into contracts with all major producers of the World excluding China for technology sharing with respect to REE.

The national level strategy and co-ordination between states and Center for REE is inevitable. Research and development have to be prioritized in this sector and the same should be linked with Make in India initiative at massive level. India has to emerge as an alternative to REE to dent Chinese dominance in REE which will cause considerable damage to China and facilitate Indian supremacy in the market.

No country in the world would be powerful and wealthy merely because of mighty army or abundance of artillery at its disposal, the real power comes out of opportunities for talent of people, optimum utilization of the land and natural resources of the country.

 

REFERENCES:

https://www.otcmarkets.com/ajax/showNewsReleaseDocumentById.pdf?id=27726

https://geology.com/articles/rare-earth-elements/

https://www.britannica.com/science/rare-earth-element/Abundance-occurrence-and-reserves

https://ibm.gov.in/writereaddata/files/03202018145809Rare%20Earths_AR_2017.pdf

https://www.theweek.in/news/sci-tech/2020/05/16/global-rare-earths-battle-a-reality-check.html

https://timesofindia.indiatimes.com/business/india-business/indias-heavy-minerals-industry-has-the-potential-to-displace-chinas-monopoly/articleshow/75915825.cms

http://isssp.in/state-of-indias-rare-earth-industry-understanding-indias-current-position/

https://www.financialexpress.com/defence/india-australia-endless-opportunities-to-strengthen-our-friendship-says-pm-modi/1981623/

https://www.organiser.org/Encyc/2019/7/28/Modi-government-blocks-mining-of-Atomic-minerals-by-private-companies.html fbclid=IwAR1spLmoc8jfJHLj0icFV8UCkB4nvrSlztLkTlYT4EbOqyAEodnpydFtl9g

 

Image Credits: Tech Metals Research