The subcontinent aims to expand its rare earth sector and reduce its reliance on Chinese imports.
India’s state-owned mining company India Rare Earths Ltd. (IREL) plans to launch commercial production of rare earth magnets and is seeking partnerships with Japanese and South Korean companies, Reuters reports, citing a source familiar with the matter.
In June, India announced plans to subsidize rare earth magnet production with millions in government funding. The initiative is part of a broader strategy to strengthen the country’s high-tech sector and reduce reliance on neighboring China. Currently, 90 percent of the world’s permanent magnets made from rare earth elements are produced in China, which also accounts for much of the global mining and refining of these critical raw materials.
India holds vast rare earth reserves, the third largest in the world according to the U.S. Geological Survey, but currently exploits only a small portion and produces just a few thousand tons annually. Domestic processing capacity is even more limited. Apart from IREL, the only active player in this space is Toyotsu Rare Earths India (TREI), a subsidiary of Japanese trading house Toyota Tsusho. The two companies already cooperate, with IREL supplying rare earth materials to TREI for further processing and export to Japan.
According to the Reuters source, IREL has approached TREI for assistance in connecting with other Japanese industry stakeholders. One potential option under discussion is the construction of a dedicated magnet production facility in India.
Japan and South Korea have some of the most advanced rare earth magnet industries in the world. However, Japan is the only one with a significant share of the global market, estimated at eight to nine percent depending on the source, while China dominates the rest.
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