Kazakhstan’s Rare Earth Potential

Context: India, despite being the fifth-largest holder of rare earth elements, relies heavily on China for imports as it lacks advanced technologies for extraction. 

Amid supply-chain disruptions and security concerns related to China’s dominance in this sector, India is diversifying its sources through agreements with the U.S., Latin American, and African countries to mitigate dependency on China. In this context, Kazakhstan has also emerged as a promising and strategically closer alternative.

Importance of Rare Earth Minerals for India:

• India is fifth largest holder of rare earth minerals (6% of the world’s rare earth reserves); however, it only produces 1% of global output and meets most of its requirements of such minerals from China. 
• REEs contribute towards a total value of nearly $200 billion to the Indian economy. 
• In 2018-19, 92% of rare earth metal imports by value and 97% by quantity were sourced from China.
• Some REEs are available in India which include Lanthanum, Cerium, Neodymium, Praseodymium and Samarium, etc. Monazite and thorium are the principal source of rare earths. 
• Others such as Dysprosium, Terbium, and Europium, which are classified as Heavy REEs (HREE), are not available in Indian deposits in extractable quantities.
• The sector has potential to generate over 10,000 direct and 50,000 indirect jobs through mining and manufacturing.

Challenges facing India in REE Landscape:

• Insufficient domestic production: India is facing the twin burden of insufficient domestic production and increasing demand of REEs from sectors like electronics, defence, and clean energy.
• Global monopoly of China: China accounts for over one-third of the global rare earths’ possession, around 70% of its production, and 90% of refining capacity. With India sourcing around 60% of its imports from China.
• Supply chain disruptions: China’s monopoly in global and Indian rare earth demand leverages its position to dictate supply chain terms. China recently halted the supply of antimony, crucial for flame retardants, solar cells, batteries, and military gear, citing national security concerns.
• Reduced ore supplies from Russia: Russia’s invasion of Ukraine has further exposed the risks of concentrated supply chains, resulting in India and Western nations to seek sustainable, diversified alternatives.

In this context, Kazakhstan becomes important:

• Rich source of Rare Earths: Kazakhstan is among the richest sources of rare earth elements (REEs), holding 15 of the 17 known REEs.
• India-Kazakhstan Partnership: Kazakhstan is a close ally of India, and the partnership aligns with India’s 'Connect Central Asia' policy and connectivity projects like the International North-South Transport Corridor.
• Reducing China's dominance: Kax$zakhstan's advanced extraction technologies and collaborations with nations like Japan, Germany, the U.S., South Korea, and the EU present an opportunity to challenge China's monopoly in the rare earth sector.
• Strategic minerals and manufacturing: Kazakhstan is a global leader in producing beryllium, scandium, tantalum, and niobium, which are essential for telecommunications, nuclear reactors, and clean energy. Kazakhstan is also making investments in tungsten, battery materials, magnets, and advanced technologies in lithium and heat-resistant alloys highlighting Kazakhstan’s strategic focus on rare earths and other critical minerals.
• Industrial excellence: Kazakh plants extract critical materials like bismuth, antimony, selenium, tellurium, gallium, and indium, vital for renewable energy and advanced technologies.

Way Forward for India

• Renewable Energy Targets: India’s COP29 pledge to achieve 500 GW of renewable energy by 2030 highlights the importance of REEs like dysprosium for clean energy technologies.
• Diversification: Current over-reliance on China for rare earths highlights the necessity for diversified sourcing, with Kazakhstan offering a viable alternative.
• Collaboration: The proposed ‘India-Central Asia Rare Earths Forum’ is poised to foster private sector investments, joint mining ventures, and sustainable practices.
• Shared expertise: The forum could facilitate bilateral training, shared geological data, and expertise to overcome technological and connectivity challenges.
• Development of regional market: Establishing a regional market through India-Kazakhstan collaboration can reduce reliance on China and enhance resource security for India.