India Turns to Australia for Rare Earth Magnets, Moving Away from China

Rare Earth Magnets: India is reportedly considering importing more rare earth magnets from Australia after China imposed restrictions. Following this, the share prices of automobile companies rose in the stock market. There are also plans to increase their production in the country through the National Critical Minerals Mission. Increasing production, recycling after use, and providing more support for mining in addition to the existing production-linked incentive scheme are also being considered. Reports also say that from June, it will be mandatory for all mining operations to test waste for the presence of critical minerals.

China’s restrictions and India’s response In April, China imposed restrictions on the export of seven key rare earth minerals — samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. These are essential for making materials such as neodymium iron boron and samarium-cobalt. These are widely used in electric vehicles. Since China’s restrictions came into effect, India has been exploring alternative measures. These include importing them from countries like Australia, increasing domestic production through Indian Rare Earths Limited, and encouraging new discoveries in the private sector.

The average rare earth magnetite consumption is about 0.8 kg per electric vehicle, 0.5 kg per hybrid vehicle, and 0.1 kg per petrol/diesel vehicle. Therefore, Chinese export restrictions will most likely affect electric passenger vehicles, followed by hybrid passenger vehicles, and then electric two-wheelers. The impact on conventional petrol/diesel vehicles will be minimal.

The average rare earth magnetite consumption is about 0.8 kg per electric vehicle, 0.5 kg per hybrid vehicle, and 0.1 kg per petrol/diesel vehicle. Therefore, Chinese export restrictions will most likely affect electric passenger vehicles, followed by hybrid passenger vehicles, and then electric two-wheelers. This will have very little impact on regular petrol/diesel vehicles.

Stock market gains

Shares of automobile manufacturing companies rose by up to 2% in the stock market today. Shares of major companies like Eicher Motors, TVS Motor Company, and Maruti Suzuki were the gainers. Other stocks in the Nifty Auto index like MRF, Mahindra & Mahindra, and Bosch also recovered from losses and made gains.

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