India Is Anxious Due To A Shortage Of Rare Earths

According to a recent article by Reuters, India has requested state-owned mining giant Indian Rare Earth Limited (IREL) to suspend its 13 year long rare earth export agreement with Japan, as India is also afraid of rare earth shortages, and this move will also put Japan in another rare earth shortage situation.

 

The Indian automotive industry is clamoring for a shortage of rare earths and urgently calling on China to issue purchase permits. The Indian Financial Express reported that due to a shortage of rare earth magnets, Indian car manufacturers may halt the production of electric vehicles or cause delays in the delivery of new electric vehicles. According to an article by the Press Trust of India, multiple Indian suppliers have applied for rare earth exports from relevant Chinese departments through their partners in China, but have not yet obtained any permits. China can't even take care of applications from the United States and Europe, so how can it care about Indian companies.

 

India has certain rare earth reserves, but severely lacks the ability to extract rare earths, which is why India's rare earths are transported to Japan. India has the fifth largest rare earth reserves in the world (6.9 million tons), accounting for 6% of the global rare earth reserves. However, the production in 2024 will only be 3000 tons, and the rest of the extracted rare earths will be transported to Japan for refining. But the rare earth raw materials transported to Japan are all used by Japanese companies, resulting in Indian car companies not having rare earths themselves. In 2024, the total new car sales of passenger and commercial vehicles in India reached 5.226784 million units. India's major car manufacturers include Tata, Maruti Suzuki, and Hyundai, all of which require rare earths.

 

India no longer sells rare earths to Japan, which is a fatal blow to Japan. In August 2014, when Indian Prime Minister Modi visited Japan for the first time, Japan and India reached an agreement to import rare earths from India to get rid of their dependence on China. It was announced that as early as February 2015, 2000 to 2300 tons of rare earths would be shipped from India to Japan. This is approximately 15% of Japan's total annual production of rare earths. Afterwards, India and Japan collaborated for over a decade, supplying rare earth raw materials to Toyota Tsusho's subsidiary, Toyotsu Corporation, located in India. After being processed and purified by the subsidiary, these key raw materials are exported to Japan and ultimately used for the manufacturing of permanent magnets. That's why Japan doesn't lack rare earths like the United States does. It turns out that India is continuously providing rare earth materials to Japan.