India turns to Russia to break China’s rare earth monopoly

New Delhi: Indian firms are exploring the feasibility of tie-ups with Russian entities to improve supplies of rare earth magnets and critical minerals in the country in the wake of a supply squeeze by China, people close to the development told ET.

Rare earth processing technologies developed by Russia are currently deployed in pilot projects and Moscow has shown interest in their wide-scale commercialisation with Indian partners, they said.

Earlier this month, China, which controls 90 per cent of global rare earth processing, expanded its rare earth export controls which were first put into place in April amid its trade tussle with the United States. The curbs hit production in user industries-especially automobiles, energy and consumer electronics-in India and elsewhere.The Indian government has called on domestic companies, including Lohum and Midwest, to examine collaboration prospects with Russian firms that have expertise in the critical mineral segments, according to the people.

Russia's state-run firms, such as Nornickel and Rosatom, could be among potential candidates for collaboration, they said.

Similarly, laboratories under the Council of Scientific Industrial Research, Indian School of Mines (Dhanbad) and Institute of Minerals and Materials Technology (Bhubaneswar) have been asked to assess the processing technologies available with Russian entities.

The move is part of broader efforts by India and Russia in recent months to explore opportunities in rare earth and critical minerals extraction, underground coal gasification and creation of modern industrial infrastructure.Separately, India is planning to stockpile rare earth materials and also offer incentives worth ₹7,300 crore for local production of magnets.

In response to ET's queries on potential Russian tie-ups, Lohum founder and chief executive Rajat Verma said, "We are continuously exploring new raw material resources and technical collaborations that can further advance India's magnet production capabilities."

Lohum has built in-house capabilities for processing rare earth ores and for converting them into oxides, metals and magnets, Verma said.A Nornickel spokesperson said the company's policy "does not permit us to discuss market rumours, prospective trade agreements, or potential merger and acquisition activities".Emails to Rosatom and Midwest, sent on Wednesday, remained unanswered till press time on Friday.

India imported 2,270 tonnes of rare earth metals and compounds in 2023-24, up almost 17 per cent year-on-year. More than 65 per cent of these supplies came from China.