Sourcing rare earth minerals from China

In the recent face-off between China and Japan over the captain of a Chinese fishing boat held by the Japanese for fishing in their waters off the Senkaku islands (the Chinese call them Diaoyou and claim them to be their own) and for intentionally colliding his boat with a Japanese patrol craft, China’s stopping the export of rare earth minerals to Japan, among other things, secured his release.

Japan is highly dependant on China for the rare earths which are used in petroleum refineries, mobile phones, other sophisticated electronic devices - civil and military, including missiles - and in various clean energy technologies. India and most other countries of the world are in the same position as Japan which is not surprising considering that China mines 95% of the world’s output of rare earth minerals. It is not a very happy situation for India to be in, after all there is not much love lost between her and her northern neighbour. To settle some real or imaginary score, China can close the tap any time and deny the rare earth minerals to India, adversely affecting her technological progress and defence preparedness.

In order to rule out that possibility, India should take some pro-active measures. It could tie up, by formal agreement, her export of iron ore to China with import of rare earth minerals from that country. There is no doubt that China can source iron ore from other countries but it may not like to forego import of high grade ore from India. India could also have alternative arrangements in place for import of rare earth minerals from other producers. They may be producing in very small quantities as compared to China but something would definitely be better than nothing. Lastly and very importantly, India could put in place a country-wide mechanism to recover, to the last milligram, the rare earths from old mobiles, computers and other electronic appliances, and recycle them. That would curtail the need for fresh imports substantially and to that extent make the country self-dependant.