India mulls strategic rare earth reserve, defense official says

India’s cabinet approved a 15 billion rupee ($170 million) incentive program to boost recycling of critical minerals from batteries and e-waste

India is considering setting up a strategic reserve of critical minerals for emergency use in defense manufacturing, a top official said, joining other countries who are accelerating efforts to build a domestic supply chain.

The reserve of critical minerals and metals would be used to “tide over immediate requirement” when needed, said Rajesh Kumar Singh, a top Ministry of Defence official. He was speaking at a media event organized by the Business Standard daily in New Delhi on Saturday.

This is the first time India has made public its plans to set up such a strategic reserve. Key military hardware such as missiles, aircraft, radars and warships all require critical minerals, and shortages can have a crippling effect on defense preparedness.

Rare earth flows from China collapsed from early April this year after Beijing put export controls on some of them. The restrictions particularly threatened the supply of rare earth magnets, a market where China controls 90% of global output, disrupting major industries from electric vehicles to wind turbines.

While China has recently eased its rare-earths controls, Beijing’s earlier weaponization of its market dominance has spurred Western companies to look for alternative suppliers.

India’s cabinet approved a 15 billion rupee ($170 million) incentive program to boost recycling of critical minerals from batteries and e-waste, stepping up efforts to secure access and supplies of rare earths, Bloomberg News reported earlier.

Earlier this month, India decided to treat rare earth mines as “strategic projects,” a classification which would significantly reduce procedures and ensure faster environmental clearances, easing rare-earth mining, Singh said.

“India does have reasonable stocks of critical minerals by all accounts and we should be able to better utilize in the future,” he said.