India’s Rare-Earth Race: From 40 Tonnes to 500 Tonnes of Neodymium

India’s Rare-Earth Race: From 40 Tonnes to 500 Tonnes of Neodymium

India is gearing up for a major leap in its rare-earth production capabilities. According to IREL — the state-owned enterprise under the Department of Atomic Energy (DAE) — it plans to ramp up its output of the key rare-earth metal neodymium to 200 tonnes by the end of the current fiscal year, and subsequently reach 500 tonnes by FY 27. 

This is a dramatic expansion. Just last year, India’s production of neodymium was around 20–40 tonnes — reflecting how nascent the domestic rare-earth magnet supply chain still is. 

Why the rapid push? Because neodymium (and its sibling praseodymium) are the backbone of high-performance permanent magnets: critical for electric vehicles (EVs), wind turbines, electronics, defence systems and more. With global supply chains under pressure, India’s ambition is timely. 

The Strategic Imperative

Globally, rare earths have become a strategic asset. According to IREL’s measurements, China accounts for about 44 % of the total rare-earth business, and roughly 90 % of global production. In contrast, India holds about 5-6 % of the business and is sixth in terms of reserves. 

That disparity spurs India’s push — the country is determined to reduce its dependence on external supply chains and build a home-grown rare-earth value chain that spans mining, processing, magnet production, and recycling. As IREL’s general manager & head of rare earths, V Chandrasekar, put it:

“We are working overnight to ramp up the production of neodymium and praseodymium, very much required by the industry now.” 

Complementing this is the government’s push: under the National Critical Mineral Mission (NCMM), announced in January, India plans an outlay of ₹16,300 crore and envisages private and PSU investment of around ₹18,000 crore between FY25-31 to secure critical-mineral supply chains. 

The Infrastructure and Raw-Material Base

IREL already has key infrastructure in place: a rare‐earth extraction plant in Odisha, and a refining unit in Kerala.  At the Kerala refining unit, eight rare earths are already produced — lanthanum, cerium, neodymium, praseodymium, gadolinium, samarium, europium and dysprosium. Pilot plants are also in place for terbium and europium. 

India’s raw‐material base is largely beach sands (monazite‐rich) located in states such as Tamil Nadu, Kerala, Odisha and Andhra Pradesh. 

Also notable: IREL has set up a rare-earth permanent magnet (REPM) plant, producing samarium-cobalt magnets (used in defence & atomic-energy sectors). 

Why Neodymium Matters — and Why the Scale Up

Neodymium (often together with praseodymium) is the workhorse of high-performance permanent magnets. These magnets are indispensable in:

• Electric-vehicle traction motors

• Wind-turbine generators

• Consumer electronics (hard disk drives, speakers)

• Defence systems (sensors, guidance)

• Other clean-energy technologies

Given global demand for electrification and decarbonisation, the supply of neodymium is under strain — hence India’s ambition to ramp up to 500 tonnes by FY 27.

Furthermore, the jump from 20-40 tonnes to 200 tonnes in just one fiscal reflects a “nine-fold rise” ambition, as IREL describes it. 

Challenges and the Road Ahead

While the targets are bold, several challenges must be addressed:

• Processing & refining: Mining is only the first step. Processing rare earths — separating individual elements, refining to high purity — remains complex and capital intensive. India’s infrastructure is still developing.

• Magnet manufacturing and integration: Producing high‐end neodymium magnets isn’t just about metal. It’s about alloying, magnetising, coating, assembly. India will need to scale up downstream industries.

• Supply chain resilience: Even with domestic production, ensuring upstream supply of monazite, ensuring environmental compliance, and establishing recycling systems will matter.

• Global competition & pricing: Rare earths are subject to global cycles, trade politics, and monopolistic supply chains (historically dominated by China). India must ensure it can compete cost-effectively, maintain quality and deliver customer-trusted supply.

• Environmental and social factors: Mining and processing rare earths can bring environmental risks (radioactive thorium in monazite, waste management, worker safety). Transparent, sustainable operations will be essential.

What This Means for India’s Industry and Economy

If India succeeds in achieving 200 tonnes this fiscal and scaling to 500 tonnes by FY 27, the implications are significant:

• It will substantially enhance India’s standing in the global rare‐earth ecosystem — reducing reliance on imports, increasing self-reliance in technologies like EVs and clean energy.

• It could attract domestic and foreign investment into downstream industries — magnet manufacturing, EV components, wind-generator manufacturing, defence systems — creating jobs and value addition.

• It strengthens national security: rare earths are considered “critical minerals” because of their role in defence, aerospace and energy systems. Domestic production enhances strategic autonomy.

• It supports India’s green ambitions: scaling rare-earth production aligns with the push for EVs, renewable energy and decarbonisation.

Final Thoughts

In many ways, the ambitious roadmap set by IREL is a bellwether for India’s aspirations in the 21st-century industrial landscape. Moving from around 20–40 tonnes of neodymium to 200 tonnes this fiscal, and 500 tonnes by FY 27, signals more than a volume target — it reflects a shift in mindset: from being a passive resource-user to becoming a more integrated player in strategic raw materials, processing, manufacturing and the clean-tech value chain.

Of course, the proof will be in execution — building the downstream ecosystem, ensuring environmental standards, securing investment and mastering technology. But if India can meet these goals, it may well become a key node in the global rare‐earth supply chain, and a stronger base for its green, defence and industrial ambitions.