The physicist Homi J Bhabha, the father of India’s nuclear program, sought to extract power from the beach sands along India’s vast coastline. Eighty years later, Bhabha’s foresight might help India and the world break free of a crippling dependence on China for rare earth magnets.
At the height of the arms race during the Cold War, Bhabha switched to using thorium, which is in abundant supply in India, when the US restricted the enrichment of uranium for nuclear energy. The hunt for thorium led to the finding and extraction of neodymium as well. Kerala, Orissa or Tamil Nadu are rich in monazite, a key mineral source for both thorium and neodymium. With estimated reserves of 11.93 million tonnes of monazite which in turn contains ~1.07 million tonnes of thorium, a fourth of world's known thorium reserves are in India, making us the top source for the radioactive resource.
Compared to rare earth magnets like samarium cobalt, neo or neodymium magnets are far more powerful with the highest energy product of all the magnet materials. They are high in magnetic strength, more versatile and less brittle than samarium cobalt, thereby most cost effective. Even without any heavy rare earth elements like dysprosium, terbium which we have no access to, a neodymium iron boron (NdFeB) magnet, will only be 10-15% weaker but fully functional and will be able to handle 95% of all applications, Vivek Vikram Singh, Group CEO of Sona Comstar -- among the biggest importer of rare earth magnets into India at ~200 tons/year estimated for FY26 – told me. By adding copper further improvements is also possible, he added.
But unlike China, we never really took the next step forward – converting neodymium oxides to metal. Neither did we process that metal to make permanent magnets out of it, for modern manufacturing usage. They are called so since they don’t lose their magnetic property once magnetized.
Two decades back, Beijing had the strategic vision to figure out that heavy rare earth magnets will one day run every motor in the world. By curbing its exports, China has brought the whole world to a grinding halt.
This is not the first time. Back in 2010, following a spat with Japan over the East China Sea, Beijing used a similar strategy and weaponized rare earth exports. But what’s worse, since we failed to see the future, Japan Inc came piggybacking on our critical minerals. Hitachi Metals and TDK joined forces and sourced neodymium from Indian Rare Earth Limited (IREL) -- a sarkari monopoly similar to Coal India of the past – for sourcing. That seeded Japan’s own magnet manufacturing and were soon stockpiling to insulate their domestic industries from future supply shocks. Today 94% of the world’s rare earth magnet capacity may well be in China, but Japan has managed to eke out a 4% share. The rest is scattered worldwide.
If necessity made Japan wiser and innovative, it's high time India – that got 53,700 tonnes of rare earth magnets shipped for multiple industry usage -- starts focussing on investing in these critical building blocks. China has exposed global vulnerabilities to retaliate against President Trump’s Liberation Day tariff announcements. We should liberate ourselves too from such chokeholds.
Think of anything that needs a high temperature motor, very high torque and is confined in a small space, heat resistant magnets are a must. From wind turbines, space, smartphones, robotics, fighter jets, even the missiles used in Operation Sindoor to pinpoint enemy targets inside Pakistan or domestic appliances, much of the world’s modern technology relies on these magnets. Electric vehicles alone have 33% of total usage of these rare earth magnets that allow their motors to function at high speed. But they are also used in less exotic, though no less critical, functions performed by such parts as windshield wipers, headlights, starters, speedometers, speakers and seat belt sensors.
There are no cars in the world – electric or ICE – where usage of these magnets is zero. It may weigh just 200 grams and cost $2, but just one small component can shut down entire production. Being the 3rd largest automobile market, we are among those hardest-hit as suppliers of OEMs are staring at the last leg of their inventory that may last till mid-July. Maruti Suzuki, the country’s largest automaker, is slashing the production forecast for its upcoming electric SUV e-VITARA.
Why did we land up on such a brink of chronic shortage? Raw materials or rare earth mining has not been the bottleneck. Value addition has. Without economies of scale, massive subsidies were essential for sustaining commercial developments and China hammered prices to such low levels that Make in India would have needed massive cash support both capex and operating expenditures.
Still, quick fix workarounds like temporarily relocating the entire component supply chain and manufacturing to the Mainland will only make us fall into their hands further. This is exactly what China is hoping for. Currently, it’s a Rs 1800 crore problem. Killing the homegrown components industry will have a multi-billion dollar impact jeopardising both employment and enterprise.
So what to do about magnets? The solution may involve three stages: One, in the short run, hammer out a diplomatic solution with China to save the domestic auto-component industry. But fundamentally, we cannot shy away from developing indigenous magnets making capacities of at least 5000 tonnes. Neodymium oxides are in abundance – IREL’s annual production is estimated at 1200 tonnes -- and can easily be stepped up. Step two therefore means working with domestic miners like Hindalco, Vedanta or Tatas to help with the intermediary steps. If there was ever a strong economic case for production-linked incentive, then this must be it. Three: Any component manufacturer with knowledge of metallurgy and is familiar with processes like pressing, sintering, coating and forging can then step in to work with the metal powder and finish making the final product. With domestic capacity, heavy rare earths like dysprosium and terbium – currently on the ban list – can be imported from countries like Australia and other friendly nations that have massive untapped reserves of rare earths.
A step-by-step approach will also be a tribute to Bhabha, who also conceived India’s nuclear power program in three stages. However, some caution is warranted. Rare earth mining is a highly polluting activity. Ruining our coastal ecology for the sake of a magnet in electric vehicles will involve costly trade offs. They need to be thought through. If rare earths extraction comes at the planet’s expense, EV solutions will become part of the problem.
At the height of the arms race during the Cold War, Bhabha switched to using thorium, which is in abundant supply in India, when the US restricted the enrichment of uranium for nuclear energy. The hunt for thorium led to the finding and extraction of neodymium as well. Kerala, Orissa or Tamil Nadu are rich in monazite, a key mineral source for both thorium and neodymium. With estimated reserves of 11.93 million tonnes of monazite which in turn contains ~1.07 million tonnes of thorium, a fourth of world's known thorium reserves are in India, making us the top source for the radioactive resource.
Compared to rare earth magnets like samarium cobalt, neo or neodymium magnets are far more powerful with the highest energy product of all the magnet materials. They are high in magnetic strength, more versatile and less brittle than samarium cobalt, thereby most cost effective. Even without any heavy rare earth elements like dysprosium, terbium which we have no access to, a neodymium iron boron (NdFeB) magnet, will only be 10-15% weaker but fully functional and will be able to handle 95% of all applications, Vivek Vikram Singh, Group CEO of Sona Comstar -- among the biggest importer of rare earth magnets into India at ~200 tons/year estimated for FY26 – told me. By adding copper further improvements is also possible, he added.
But unlike China, we never really took the next step forward – converting neodymium oxides to metal. Neither did we process that metal to make permanent magnets out of it, for modern manufacturing usage. They are called so since they don’t lose their magnetic property once magnetized.
Two decades back, Beijing had the strategic vision to figure out that heavy rare earth magnets will one day run every motor in the world. By curbing its exports, China has brought the whole world to a grinding halt.
This is not the first time. Back in 2010, following a spat with Japan over the East China Sea, Beijing used a similar strategy and weaponized rare earth exports. But what’s worse, since we failed to see the future, Japan Inc came piggybacking on our critical minerals. Hitachi Metals and TDK joined forces and sourced neodymium from Indian Rare Earth Limited (IREL) -- a sarkari monopoly similar to Coal India of the past – for sourcing. That seeded Japan’s own magnet manufacturing and were soon stockpiling to insulate their domestic industries from future supply shocks. Today 94% of the world’s rare earth magnet capacity may well be in China, but Japan has managed to eke out a 4% share. The rest is scattered worldwide.
If necessity made Japan wiser and innovative, it's high time India – that got 53,700 tonnes of rare earth magnets shipped for multiple industry usage -- starts focussing on investing in these critical building blocks. China has exposed global vulnerabilities to retaliate against President Trump’s Liberation Day tariff announcements. We should liberate ourselves too from such chokeholds.
Think of anything that needs a high temperature motor, very high torque and is confined in a small space, heat resistant magnets are a must. From wind turbines, space, smartphones, robotics, fighter jets, even the missiles used in Operation Sindoor to pinpoint enemy targets inside Pakistan or domestic appliances, much of the world’s modern technology relies on these magnets. Electric vehicles alone have 33% of total usage of these rare earth magnets that allow their motors to function at high speed. But they are also used in less exotic, though no less critical, functions performed by such parts as windshield wipers, headlights, starters, speedometers, speakers and seat belt sensors.
There are no cars in the world – electric or ICE – where usage of these magnets is zero. It may weigh just 200 grams and cost $2, but just one small component can shut down entire production. Being the 3rd largest automobile market, we are among those hardest-hit as suppliers of OEMs are staring at the last leg of their inventory that may last till mid-July. Maruti Suzuki, the country’s largest automaker, is slashing the production forecast for its upcoming electric SUV e-VITARA.
Why did we land up on such a brink of chronic shortage? Raw materials or rare earth mining has not been the bottleneck. Value addition has. Without economies of scale, massive subsidies were essential for sustaining commercial developments and China hammered prices to such low levels that Make in India would have needed massive cash support both capex and operating expenditures.
Still, quick fix workarounds like temporarily relocating the entire component supply chain and manufacturing to the Mainland will only make us fall into their hands further. This is exactly what China is hoping for. Currently, it’s a Rs 1800 crore problem. Killing the homegrown components industry will have a multi-billion dollar impact jeopardising both employment and enterprise.
So what to do about magnets? The solution may involve three stages: One, in the short run, hammer out a diplomatic solution with China to save the domestic auto-component industry. But fundamentally, we cannot shy away from developing indigenous magnets making capacities of at least 5000 tonnes. Neodymium oxides are in abundance – IREL’s annual production is estimated at 1200 tonnes -- and can easily be stepped up. Step two therefore means working with domestic miners like Hindalco, Vedanta or Tatas to help with the intermediary steps. If there was ever a strong economic case for production-linked incentive, then this must be it. Three: Any component manufacturer with knowledge of metallurgy and is familiar with processes like pressing, sintering, coating and forging can then step in to work with the metal powder and finish making the final product. With domestic capacity, heavy rare earths like dysprosium and terbium – currently on the ban list – can be imported from countries like Australia and other friendly nations that have massive untapped reserves of rare earths.
A step-by-step approach will also be a tribute to Bhabha, who also conceived India’s nuclear power program in three stages. However, some caution is warranted. Rare earth mining is a highly polluting activity. Ruining our coastal ecology for the sake of a magnet in electric vehicles will involve costly trade offs. They need to be thought through. If rare earths extraction comes at the planet’s expense, EV solutions will become part of the problem.
Arijit Barman