Brownfield mining operations are enough to meet India’s rare-earth needs

India should strategically cap total rare-earth oxide (TREO) capacity at approximately 20,000 tonnes annually by 2030, and focus on scaling its existing facility rather than approving large greenfield operations.

By Tannmay Kumarr Baid

India’s rare earth sector is buzzing with activity. After China’s tightening of rare earth and finished magnet exports through licensing requirements, India suspended its rare earth exports to Japan and accelerated domestic exploration. India also is looking to earmark ₹1,345 crore specifically for rare earth projects. Prime Minister Narendra Modi’s repeated public references, including at the recent BRICS summit, to rare earths as strategic vulnerabilities further highlight how concentrated the policy focus has become.

Given this surge in attention, accompanied by ministerial announcements of ₹3,500–5,000 crore incentive schemes and heightened industry alarms, the immediate temptation is to authorize expansive new mining and magnet manufacturing projects. However, such a maximalist response offers limited real-world benefit. Instead, India should strategically cap total rare-earth oxide (TREO) capacity at approximately 20,000 tonnes annually by 2030, and focus on scaling its existing facility rather than approving large greenfield operations.

This level sufficiently meets domestic demand for cerium and lanthanum, along with moderate quantities of higher-value neodymium and praseodymium, without incurring the diminishing returns of excessive expansion.

What monazite actually gives you

Nearly all of India’s REE reserves are in a type of placer deposit that are known as monazite sands. Monazite is a phosphate mineral dominated by light rare earths. Although there is some variance across different deposits in the country, typical oxide distribution in these sands is about 45% cerium, 24% lanthanum, 17% neodymium and 5% praseodymium, with only trace dysprosium, terbium or yttrium. Thorium oxide averages 6–8%, and uranium is a fraction of a per cent. This means every tonne of Nd or Pr you want brings two to three tonnes of Ce and La whether or not the market wants them.

Therefore, translating these numbers, at a 20,000‑tonne TREO output in 2030, you would be producing roughly 9,000 tonnes of Cerium Oxide, 4,800 tonnes of Lanthanum Oxide, 3,300–3,500 tonnes of Neodymium Oxide and about 900–1,100 tonnes of Praseodymium Oxide.

Why 20,000 tonnes? IREL’s existing Rare Earth Extraction Plant was designed to expand from 10,000 to roughly 20,000 tonnes a year without a new greenfield build. The Ce/La it delivers is enough for slow‑growing domestic uses in refinery catalysts, glass polishing and diesel filters. The Nd/Pr it delivers is enough for India’s planned magnet factories to use this decade. Beyond that level the TREO basket is mostly low‑value Ce/La and thorium with limited near‑term markets, so every extra rupee of capacity buys diminishing returns.

International Demand Lagging

The common argument against would then be that excess production is good as it can be exported. This however loses credence when you look at the specifics; exporting Neodymium and Praseodymium is valuable, Cerium and Lanthanum are not. Exporting Ce and La at today’s prices barely covers logistical costs of production. The reason for this is that China also has a Cerium-Lanthanum heavy composition in its main Bayan Obo mine, and thus production is almost always in excess. Additionally, globally Ce and La supplies are some of the most abundant Rare Earths and are already a disposal problem for some other producers.

Moreover, the US, through its Mountain Pass mine, which has received a multi-billion dollar impetus this month, is adding large volumes of the same low‑value oxides. Selling into that market pushes prices down further. India would be shipping bulk oxides that carry low margins and high transport cost. That outcome does not justify new public money in cracking and separation capacity for export volumes. 

As stated previously, Neodymium and praseodymium are the economic anchors in the monazite basket. They have much wider uses, such as permanent magnets for EVs, wind turbines and defence electronics. Their use is expected to grow much faster than their more common cousins, Ce and La. However, their share in Indian monazite is just around 22% combined. Therefore, to chase large Nd/Pr tonnes you must still mine the Ce/La bulk. Even then, India’s magnet sector can be met with a few thousand tonnes of Nd/Pr per year. That can be secured with a 20,000‑tonne TREO ceiling plus strategic imports, joint ventures and offtake deals. Mining more than that is unnecessary and results in largely inefficient byproducts production.

What does the 20,000 tonne figure look like?

Even at this figure, heavy rare earths (HREEs) would remain a gap, as they do today. This is simply because of geology. Monazite sands in India do not solve the dysprosium, terbium and yttrium problem. These are needed in smaller absolute quantities but are critical for high‑temperature magnets and certain defence applications. They will still come from overseas. That fact weakens the argument for a fully indigenous REE supply chain built on monazite alone. Diversifying imports through KABIL and bilateral deals remains necessary for this aspect of the REE supply chain.

Along with the stated REE production which would be enough to meet Indian domestic demand, we get a bonus in terms of Thorium. Thorium is central to India’s three‑stage nuclear plan but has no spot market. Holding and conditioning Thorium Oxide requires capital and compliance costs.

The fact that thorium exists in monazite is a reason to keep a controlled domestic cracking line, not to overexpand it. A lean programme that recovers and stores thorium as a byproduct of the right‑sized REE flow is enough. Too much Thorium as a byproduct of expanded REE mining once again yields stockpiling and disposal issues. This is because the quantities generated just as a byproduct in the 20k tons plan already eclipse thorium demand for the next 20 years, and every tonne of thorium that has to be stockpiled is an additional regulated radioactive liability; it requires monitored, conditioned storage which comes with expenditure and a compliance drag.

Money Matters 

Industrial research shows monazite mining plants cost $70–100 million for mid‑scale modules of around 20–25 kilotonnes per year. In addition to this, there is the time cost; in India the critical path is usually regulatory: with different permits like coastal regulation zone, forest clearance, environmental approvals and radioactive waste management. These permits stretch timelines and inflate carrying costs. As a result, mines actually take anywhere between 12-15 years to operationalize. This long delay is purely because of regulation, and thus expanding current mine production would also take significantly less time than new projects, as the bulk of the time is tied up in approvals and not actual building. This timeline and the spend associated with new mines further the argument for squeezing more out of IREL’s existing line, and not funding fresh greenfields.

Public capital in mining and processing is finite. Every rupee parked in excess REE capacity is a rupee not spent on a million other things that the government has to spend on. India does not need a maximalist mining push to meet its rare‑earth goals. A calibrated build via expansion of existing mining projects to roughly 20,000 tonnes of TREO is sufficient. Export‑led monazite mining or new greenfield projects would make little sense when the bulk of the product mix is low value and when heavy rare earths must still be imported and thus reliance must still exist. Restraint will save money, focus effort and still deliver security of supply where it actually matters.

(Tannmay Kumarr Baid is a Junior Adjunct Scholar with the High-Tech Geopolitics Programme, Takshashila Institution.)

Views are personal and do not reflect the views of this publication.