India has the world’s third-largest rare earth reserves, but why is its production lagging behind?

New Delhi: India currently ranks third in the world in terms of rare earth ore reserves. However, its production is among the lowest compared to major global players, highlighting a significant gap between resource availability and actual production. Data shows that India possesses approximately 6.9 million tonnes of rare earth oxide (REO) reserves. Only China and Brazil have larger reserves.

According to Amicus data, China has 44 million tonnes of reserves, while Brazil has 21 million tonnes. Other countries with significant reserves include Australia (5.7 million tonnes), Russia (3.8 million tonnes), Vietnam (3.5 million tonnes), and the United States (1.9 million tonnes). Despite its substantial reserves, India’s production is limited. In 2024, India produced only 2,900 tonnes of rare earth metals, ranking seventh globally. China produced 270,000 tonnes, making it the global leader. The US was the second-largest producer with 45,000 tonnes.

India holds about 6-7 percent of the world’s rare earth mineral reserves, yet its contribution to global production is less than one percent. Most of the country’s reserves are found in monazite-rich coastal sands, which also contain the radioactive element thorium. This makes mining and processing more complex and subject to stringent regulations. Regulatory challenges have historically slowed down the mining of rare earth minerals in the country. For decades, production remained largely limited and was primarily controlled by Indian Rare Earths Ltd. (IREL).

China Controls 90%
China controls approximately 90 percent of the global rare earth refining capacity and virtually all of the processing of heavy rare earth elements. This gives China a significant advantage across the entire value chain. India’s processing and refining capacity is very limited. Annual production has been only a few thousand tons, and India’s role in the global trade of rare earth metals has been almost negligible.