Why in News?

China has effectively halted global exports of key rare earth elements (REEs) and magnets, including yttrium and dysprosium, following its April 4 announcement in retaliation to U.S. tariffs.

While the move targets the U.S., the absence of a licensing regime has disrupted shipments to all countries, impacting industries reliant on REEs like defense, aviation, and electronics.

What’s in Today’s Article?

• Rare Earth Elements (REEs)
• Global Supply Crunch Looms
• Limited Impact on India
• US Pushes for Deep-Sea Mining to Cut China Dependence

Rare Earth Elements (REEs)

• These are a group of 17 chemically similar elements, including 15 lanthanides plus scandium and yttrium.
• Despite their name, they are relatively abundant in the Earth’s crust but are rarely found in concentrated, economically exploitable forms.
• Significance of REEs
  • Critical for Modern Technology
    • REEs are essential in the manufacturing of high-tech devices like smartphones, electric vehicles, wind turbines, LED lights, and flat-screen TVs.
  • Defense and Aerospace Use
    • They are used in precision-guided missiles, jet engines, radar systems, and other military equipment.
  • Green Energy Transition
    • Vital for clean energy technologies such as solar panels, batteries, and permanent magnets in wind turbines and electric vehicles.
  • Strategic Importance
    • Due to their wide applications and limited global suppliers (especially China’s dominance), REEs are considered strategically important for national security and economic stability.
• Challenges
  • Mining and refining are environmentally damaging.
  • Global supply is heavily concentrated, with China refining over 85% of REEs, creating vulnerability for other nations.

Global Supply Crunch Looms

• With China producing the majority of the world’s REEs, the current export halt is expected to spark a global supply crunch, particularly impacting the U.S., Japan, Vietnam, and Germany.
• While some Japanese firms are better prepared with over a year’s inventory, the disruption echoes China's 2010 export ban during a territorial dispute.
• China’s History of Weaponizing REEs
  • Experts note that China has repeatedly used REE exports as a geopolitical tool — first in 2010 against Japan, and more recently from 2023 to 2025, restricting exports of key strategic materials like gallium, germanium, graphite, and tungsten to the U.S.
• Self-Reliance Still a Distant Goal
  • Countries are working to reduce reliance on China by developing domestic REE capabilities. However, experts caution that it will be difficult due to China’s dominance in refining technologies critical for processing rare earths.

Limited Impact on India

• India is expected to face minimal disruption from China’s REE export curbs due to its relatively low domestic consumption, despite a gradual rise in demand.
• Import Trends and Sources
  • India imported 2,270 tonnes of rare earths in 2023–24, marking a 23% increase from 2019–20.
  • About 65% of these imports came from China and 10% from Hong Kong.
• Domestic Capacity Still Modest
  • India’s domestic REE production is limited, led by state-run IREL Ltd, which operates a facility with an annual capacity of over 10,000 tonnes—significantly lower than China’s 2 lakh tonnes refined in 2023.

US Pushes for Deep-Sea Mining to Cut China Dependence

• The Trump administration is drafting an executive order to stockpile rare earth metals from the Pacific seabed, aiming to reduce U.S. reliance on China for critical minerals, including battery materials.
• China Opposes Seabed Mining Plans
  • China’s foreign ministry has objected to U.S. deep-sea mining initiatives, urging adherence to the UN Convention on the Law of the Sea and oversight by the International Seabed Authority.
• India Explores Andaman Seabed for Rare Earths
  • In a parallel move, India launched an auction in November for seven seabed blocks in the Andaman Sea.
  • These blocks are rich in polymetallic nodules and crusts, which may contain valuable heavy rare earth elements.