India has requested state-run miner IREL to droop a 13-year-old settlement on rare earth exports to Japan and to safeguard provides for home wants, two sources acquainted with the matter advised Reuters, aiming to cut back India’s dependence on China.
IREL additionally needs to develop India’s capability for rare earth processing, which is dominated globally by China and has turn into a weapon in escalating commerce wars. China has curbed its rare earth supplies exports since April, pressuring automakers and high-tech producers worldwide.
In a latest assembly with auto and different business executives, Indian Commerce Minister Piyush Goyal requested IREL to cease its exports of rare earths, primarily neodymium, a key materials utilized in magnets for electrical automobile motors, one of many sources mentioned.
The Commerce Ministry, IREL and the Department of Atomic Energy, which oversees IREL, didn’t instantly reply to requests for remark.
The sources declined to be recognized due to the sensitivity of the matter.
Under a 2012 authorities settlement, IREL provides rare earths to Toyotsu Rare Earths India, a unit of Japanese buying and selling home Toyota Tsusho, which processes them for export to Japan the place they’re used to make magnets.
In 2024, Toyotsu shipped greater than 1,000 metric tons of rare earth supplies to Japan, commercially accessible customs knowledge confirmed. That is one-third of the two,900 tons mined by IREL, though Japan depends primarily on China for its rare earths provide.
Toyota Tsusho and Toyotsu didn’t instantly reply to requests for remark.
IREL has been exporting rare earths due to a scarcity of home processing capability, however following the latest disruptions to provides of Chinese materials it needs to maintain its rare earths at house and increase home mining and processing, a second supply mentioned, including that IREL is awaiting statutory clearances at 4 mines.
However, India could not instantly have the opportunity to cease provides to Japan as a result of they fall beneath a bilateral authorities settlement, the particular person mentioned.
IREL needs this to be “amicably decided and negotiated because Japan is a friendly nation”, the particular person added.
Japan’s Trade Ministry mentioned in an announcement to Reuters: “We would like to refrain from answering questions about bilateral exchanges in general, not just about this matter.”
Expansion plans
China’s latest export controls on rare earth supplies have rocked the worldwide auto business, which has warned of provide chain disruptions and manufacturing halts.
China additionally weaponised its provides in 2010, when it briefly stopped shipments to Japan. That prompted the Japanese to flip to India for rare earths.
India has the world’s fifth-largest rare earth reserves, at 6.9 million metric tons, however there isn’t any home magnet manufacturing. India depends on imported magnets, primarily from China.
In the fiscal 12 months to March 2025, India imported 53,748 metric tons of rare earth magnets, authorities knowledge confirmed. These are utilized in vehicles, wind generators, medical units and different manufactured items.
Rare earth mining is restricted to IREL, which provides India’s Atomic Energy Department with supplies for nuclear energy tasks and defence-related purposes. India lacks wide-scale know-how and infrastructure to mine rare earths, and the event of any commercially viable home provide chain is years away, analysts mentioned.
IREL has a rare earths extraction plant within the japanese Indian state of Odisha and a refining unit in Kerala, in southern India. The miner, based in 1950, plans to produce 450 metric tons of extracted neodymium within the fiscal 12 months to March 2026 with a plan to double that by 2030, the second particular person mentioned.
It can also be on the lookout for a company companion for the manufacturing of rare earth magnets for the auto and pharmaceutical industries, the particular person mentioned.
India is firming up plans for incentives to firms to arrange rare earth processing and magnet manufacturing amenities to meet native demand, individuals acquainted with the matter advised Reuters earlier this month.
Published – June 13, 2025 10:20 pm IST
