The Scramble for Rare Earth Elements

Is the world witnessing a rerun of what many analysts described as the “Scramble for Africa” between 1881 and 1914, when powerful European nations like Britain, France, Germany, Belgium, Italy, etc, carved out Africa amongst themselves, dividing, occupying, and colonising the continent for its abundant natural resources?

However, this new surge for rare earth elements is not restricted just to Africa but has spread to every corner of the world because of its importance for a wide range of commercial and industrial products, as well as computers, batteries, wind turbines, and electric vehicles that will define the 21st century.

It has assumed far more immediacy and importance ever since China announced export restrictions on seven key rare earth elements in April 2025, as a countermeasure to US President Donald Trump’s massive tariff hikes. And it has sent shockwaves through the world.

While China has not outrightly banned the exports, but has imposed strict monthly quotas and licensing requirements on countries and is also scrutinising those end-users who are using rare earths in sensitive sectors such as military hardware. Such a move has also given the Chinese authorities the right to choose nations with whom they wish to oblige, while denying others not aligned to their philosophy.

Secure, Reliable, and Equitable

The Indian Prime Minister Narendra Modi made the country’s position clear at the 2025 BRICS Summit in Rio de Janeiro when he stated that countries needed to work together to make supply chains for critical minerals and technology secure, reliable, and equitable. “It's important to ensure that no country uses these resources for its selfish gain or as a weapon against others,” he added.

But achieving such goals or self-sufficiency is far more complex. China not only controls 60% of the global rare earth mining, 90% of the processing capacity, but has also made substantial investments in countries with significant deposits of rare earth, thereby making it difficult for other countries to make inroads. 

A short-term supplier diversification strategy or even developing alternate supply chains is unlikely soon, even though the demand has been mounting because of the transition to a decarbonised world. The need for these rare earth elements—including bauxite, cobalt, lithium, germanium, nickel, etc—will increase five to six times by 2030, and seven times by 2050, according to estimates by the European Commission and the World Bank. (1)

Other ambiguities abound. While the European Union and the US have been importing 98 and 80 percent of their demand for rare earths from China, several EU countries—France, Greece, Greenland, Portugal, and northern Scandinavia—have deep minerals underground. LKAB, a Swedish state-owned mining company, estimates that most critical minerals can be found in Swedish territory, with reserves measuring a million tons, potentially making Sweden the biggest supplier in Europe. (2) 

However, such mining and processing will call for substantial investments, complex and lengthy procedures to obtain permits, licenses, and environmental impact assessment reports, thereby ensuring that Chinese companies will continue to dominate the globe. Moreover, in Sweden (as well as Norway and Finland), the discovery of rare earths threatens indigenous reindeer-herding populations.

So, what can rare-earth-deficient countries do? The obvious answer is to enter long-term strategic alliances or deals with countries that have rare earth reserves outside of China, like the US, Myanmar, Australia, Nigeria, Thailand, etc. Some of these deals have already been struck, like the US and its allies with Japan investing in mining projects in Africa and Australia, and supporting companies like Lynas in Australia to expand supply diversification. 

Other strategies include ramping up domestic mining and refining capacity, building strategic stockpiles of critical minerals and refining capacity, building strategic stockpiles of critical minerals and increased investment in recycling rare earths from end-of-life electronics, and research into alternative materials.

The Indian story

For India, setting up the National Critical Mineral Mission (NCMM) in 2025 was a major step in boosting self-reliance in critical minerals to enhance the country’s domestic mining, processing, and manufacturing capabilities. The Geological Survey of India has been tasked with 1,200 exploration projects between 2024-25 and 2030-31. The Atomic Minerals Directorate is also expanding exploration, particularly in coastal and inland placer sands.

Moreover, the Indian Rare Earths Limited (IREL), the state-run miner, has been directed to suspend a long-standing export agreement with Japan and conserve rare earths for domestic needs for local industries. Scaling up both mining and advanced processing capabilities is in the cards because production has not kept pace with the reserves. India was producing only 2,900 tonnes in 2023 and 2024, with the country’s reserves at 6.9 to 7 million tonnes. (3)

While incentivising private sector participation to promote local mining and processing through capital subsidies, etc, are on the cards, the government can also look at reopening plants used for rare earths that have been lying unused. The reopening of the 4 million annual capacity Vedanta’s copper smelter plant at Thoothiukudi, Tamil Nadu, could be a beginning in achieving self-sufficiency in copper refining. By enhancing strategic global diplomacy, ensuring a favourable policy framework with speed, India can cut down on its dependence on rare earths.

Dilip Chenoy is the Former Secretary General, FICCI, besides being the Chairman, Bharat Web3Association.