By Lalita Ahlawat
India’s vast placers of monazite, the primary source of rare earths, lie largely untapped. Recent government data show India holds roughly 8.5 million tonnes of rare-earth-oxide (REO) reserves, about 7.23 Mt in monazite sands, and 1.29 Mt in hard rocks. Deposits are spread across coastal and interior India, monazite-rich beach sands in Kerala, Tamil Nadu, Odisha, Andhra Pradesh, Maharashtra, Gujarat and inland “teri” sands of West Bengal and Jharkhand; hard-rock carbonatites, in Ambadungar, Gujarat, and pegmatites, across Rajasthan and Gujarat; plus riverine heavy-mineral placers, xenotime-bearing sands in Chhattisgarh/Jharkhand. Recent surveys even hint at Himalayan anomalies and vast new reserves in the Northeast. India’s only rare-earth miner, IREL, produced record monazite output in FY2024, 531,000 t of ore, yet this yielded only 5,000 t of refined REO. Capacity exists for 10,000 t RE-bearing feedstock, but production is “capped” by pending mining leases, environmental/CRZ clearances, forest approvals and local objections.
Geological Wealth, Strategic Gap
In theory, India is richly endowed. AMD, Atomic Minerals Directorate, reports 13.15 Mt of in-situ monazite, 55–60% REO, along coastal and riverine sands, translating to 7.23 Mt of REO. Hard-rock sites, carbonatites and phosphates, add another 1.29 Mt REO. GSI exploration projects further flagged 482.6 Mt of REE ore resources across India. Yet actual mining remains extremely low, on the order of a few thousand tonnes of REO per year. As a Lok Sabha answer bluntly noted, “capacity and capabilities in terms of mining, processing, extraction, refining and production of high pure RE oxides is adequately available,” but output is restrained by regulatory hurdles. Hence, India mines 4,000 t of monazite sand per year, containing 2,200-2,400 t REO, far below its innate capacity. The backlog of lease applications, strict CRZ (coastal zone) laws on beach mining, forest area restrictions and thorium (nuclear) controls effectively throttle supply.
By contrast, China controls 60–90% of global REE refining and magnet production. Beijing has recently clamped down on REE magnet exports to protect its industry and geopolitical leverage, leaving India and others scrambling. Despite having one of the world’s largest REE reserves, USGS cites 6.9-8.5 Mt, India’s rare-earth output has been a “modest” trickle, about 5,000 t REO/year up to FY24, and essentially all exports have been raw monazite, 18 t in 10 years. To fuel domestic EVs, wind turbines, electronics and defense, India must exigently scale up mining and processing of REEs.
Policy Reforms and Strategic Mission
The past two years have seen a flurry of reforms aimed at unlocking critical minerals. This year the government launched a National Critical Minerals Mission (NCMM), FY24-25 to FY30-31, with ₹34,300 crore outlay. NCMM targets 1,200 exploration projects and domestic production of 15+ critical minerals, including REEs, by 2030-31. It funds PSU and private exploration, GSI and NMET have added hundreds of critical-mineral projects, and fast-tracks approvals for mining licences. A “fast-track regulatory approval process” is indeed envisaged, and 4 regional mineralprocessing parks plus 3 Centres of Excellence are planned. The budget has also slashed import barriers, the 2024-25 and 2025-26 Budgets exempted customs duties on most critical minerals and rare earth inputs, aiming to cut costs for domestic manufacturers.
Legislation now explicitly classifies REEs as critical. The Mines and Minerals (Development and Regulation) Act was amended, effective Aug 2023, to list 24 “critical & strategic minerals,” including rare earths, and to allow auctions for these resources under Sec 11D. Notably, private firms can now bid for exploration licenses of non-radioactive REEs, 13 such acreages have already been tendered. The Mines Ministry’s KABIL JV is also scouting overseas deposits including those in Australia, Argentina, Brazil, Vietnam, Oman etc. for lithium, REEs and cobalt, though onshore development is still a priority for strategic autonomy.
Experts praise these measures but urge more urgency. A recent industry report “From Extraction to Innovation” recommends long-term offtake contracts and price guarantees, for Nd–Pr oxides and NdFeB magnets, to give miners and manufacturers confidence. It also urges pilot hubs in mineral-rich states, focused R&D and a national magnet buffer stock. In line with this, the government is finalising a production-linked incentive (PLI) scheme with an outlay of ₹3,500-5,000 cr to boost rare-earth magnet output; an initial ₹1,000 cr tranche aims to raise magnet production to 1,500 t/year. IREL itself is earmarked to quadruple ore output, from 10 Mt/yr now to 50 Mt by 2032, yielding 13,000 t REO vs 5,000 t today, and “fast-track” environmental permits have been urged by its leadership. Removal of duties and these incentives “will reduce input costs and promote domestic manufacturing,” notes the TOI analysis.
Extraction Bottlenecks
Despite policies, deep challenges remain. Most Indian REE ores, monazite, are radioactive, contains Th/U, so by law it is a “prescribed substance” under the Atomic Energy Act, 1962, effectively reserving mining and processing for the Department of Atomic Energy controlled public sector. Private beach-sand mining was allowed under a 2016 rule with a monazite “threshold”, but in 2019 the permissible threshold was set to 0%, a de facto ban on private monazite removal. In practice only IREL and AMD may handle monazite, severely limiting new entrants. Moreover, cumbersome clearance processes, environment, CRZ, and forests, have kept many projects stalled. IREL’s new Odisha mine is said to be stuck because “there’s not enough mined ore,” partly a Catch-22 since mining permits lag behind infrastructure.
Technical gaps compound the problem. Indian ore grades are lean compared to China’s. IREL officials note Chinese ore can be 100× richer in REE content than typical Indian deposits, making extraction more costly and complex. Downstream capacity is almost non-existent, apart from IREL’s own smelters, the only private rare-earth refiner is Toyotsu, a Toyota Tsusho unit, in Andhra Pradesh, which processes IREL concentrate for export to Japan. India has virtually no production of separated rare-earth metals or high-end magnets. As one industry expert puts it,
India “must now evolve beyond producing REE oxides to manufacturing value-added products like rare earth metals”. India has geology but lacks the ecosystem. Reforms like allowing private exploration of non-radioactive REEs are steps forward, but the Atomic Energy Act and Bureaucratic delays still hobble private miners. Processing bottlenecks, no industrial-scale separation, and refining or magnet plants, mean that even mined ore can be easily shipped to China, undoing the point of domestic mining. Industry voices urgent alarm, one warned that without rapid action, “the nonavailability of these materials could hold back India from achieving its clean energy goals”.
Regional Hotspots and Opportunities
India’s REE sites vary by region and mineral type. Southern and eastern coastal belts in states of Kerala, Tami Nadu, Odisha, Andhra Pradesh, and West Bengal are rich in heavy-mineral sands. These sands contain high concentrations of monazite, light REEs like Ce, La, Nd, plus minor heavy REEs, along with ilmenite and zircon. Rapidly expediting extraction here could involve streamlining CRZ and environmental clearances, subject to strict safeguards, and expanding IREL’s existing mines. In Kerala and Tamil Nadu, IREL already operates beach-sand projects; these can be scaled by “fast-track permits” and local processing hubs. The government’s planned Rare-Earth Theme Park (DAE/ AMD) will aid this, it is designed to scale up lab-proven extraction methods to pilot and industrial trials, and train skilled workers for the sector.
Inland placers also hold REEs. The “teri,” wind-blown, sands of West Bengal and Jharkhand carry monazite, and recent surveys suggest Assam and Meghalaya terrain might too. Meanwhile hard-rock deposits in the cratonic shield offer new frontiers. AMD has identified 7.37×10^5 t REO in Ambadungar (carbonatite), Gujarat and 3.7×10^4 t in Bhatikhera, Rajasthan. These need conventional mining; India’s bid auctions should fast-track licenses here. Even smaller ore bodies such as phosphates, bastnäsite, and pyrochlore could be commercially mined if processing subsidy or assured offtake is provided. The Ambadungar carbonatite could yield light lanthanides, if a beneficiation plant were built nearby. Xenotime placers, rich in yttrium and heavy REEs, occur in river sands of Chhattisgarh/Jharkhand, AMD has already stockpiled thousands of tonnes of 2% xenotime concentrate. Establishing a local smelter to extract Y/REE from xenotime could unlock heavy-REE supply.
Offshore is another frontier. India has launched auctions in November, 2024, for polymetallic nodules in the Andaman Sea. These deep-sea nodules contain rare earths, including Nd, and Y, along with nickel, cobalt, and manganese. While still experimental, a successful sea trial suggests India could one day harvest nodules, but only if it pairs this with strong environmental oversight.
Finally, the North-East and Himalayas are surprising wild cards. A recent GSI report claims 70 Mt of critical minerals, including REEs, across Assam, Arunachal, Nagaland etc. In Arunachal alone GSI found REE anomalies totalling 28.6 Mt. Explorers also flagged India’s first lithium brines in Arunachal and major graphite/vanadium in Meghalaya and Assam. These discoveries could be game-changers, but rock grades appear low. A geologist remarked, “beneficiation of these minerals… is not only tricky but will not be economically viable” without heavy investment. Even so, accelerating surveys and pre-permitting, supposedly by creating a Special Mining Zone in Assam, could help make the Northeast a future REE source.
Building the Supply Chain
Moving ore is only half the battle. India must also process and manufacture with a deep sense of urgency. Currently, even raw REE oxides often have little domestic market: in FY25 India imported 54,000 t of rare-earth magnets, up 88% YoY, worth ₹1,744 cr, because domestic magnet capacity is near-zero. To change that, the government and industry are backing a build-out of downstream plants. IREL has begun making prototype NdFeB magnets and metal alloys at facilities in Visakhapatnam and Bhopal, tested by DRDO and BARC, and it will ramp to supply 500 t of rare-earth metals to OEMs. The private sector is mobilising too, Sona-Comstar, an auto magnet supplier, plans 2025 production, and giants like Vedanta/Zinc are eyeing magnets and metals as EV and defense demand explodes .
Yet processing needs deep pockets, IREL estimates ₹3,000-5,000 crore of investment would be needed to build downstream refineries to absorb its 2032 output plan. Japan’s model shows how, after China’s 2010 export embargo, Japan funded a joint venture in Australia, Lynas, and built local separation plants. India’s strategy has similarly turned international, Toyota Tsusho’s Andhra Pradesh plant is one example. US firms too are eyeing partnerships, one CSIS analysis urges an Indo-US REE pact and investment to boost India’s processing and meet Inflation-Reduction-Act standards.
On recycling and stockpiling, NCMM mandates ₹1,500 cr for e-waste/battery recycling, 400 kt target, and creation of strategic stockpiles of five critical minerals. This recognises that short-term supply crunches, like China’s magnet ban, can be partly offset by recycled Nd/Pr and by buffer inventories. Policymakers are reportedly considering a national magnet buffer akin to petroleum reserves.
Race Against Time
India’s need to “fast-track rare earths” is unquestionable. With EVs set to exceed 30% of vehicles by 2030 and wind/ renewables surging, demand for NdFeB magnets alone is projected to hit 7,200 tonnes/yr by 2030. These magnets are also vital for drones, radars, satellites and more. Every year of delay means deeper dependence on China or risk to strategic industries. Yet India has the raw assets and growing policy muscle, what remains is execution.
Experts urge strict deadlines and accountability. One IREL leader “urged authorities to fast-track permits” for new mines, warning that delays could derail clean-energy goals. Environmental and social safeguards are non-negotiable, but regulators can use digital approvals and pre-cleared “mining parks” to slash red tape. Joint ventures with likeminded partners such as US, Japan and Australia can bring capital and technology that India needs. And with state-of-the-art labs, through NCMM’s Centres of Excellence, and the Rare-Earth Theme Park expanding know-how, India can refine its ore onshore rather than exporting it.
India has awakened to its REE promise. Now it must turn policy into production, from the amber sands of Kerala to the heights of Arunachal or risk ceding another strategic industry to foreign hands. As one policymaker referenced for this paper puts it: “Monazite production is already 4,000 t/year, but we must