These curbs can impact automobile prices as REMs are crucial element in making electric vehicles.
- Also import of complete parts instead of REMs could reduce domestic value addition by automakers which is a key requisite for incentives under PLI scheme.
About Rare Earth magnets
- Rare earth magnets are the strongest type of permanent magnets commercially available.
- They are typically made from alloys that contain rare earth elements such as neodymium, praseodymium, and dysprosium
- Application: They form critical parts of EVs, renewable energy, and cutting-edge defence systems and their absence can paralyse the supply chain
Challenges associated with REMs
- Supply chain concentration: China accounts for about 70% of global rare earth metals mining and holds nearly 90% of the world's REMs’ production.
- Despite holding 5th-largest rare earth reserves India has no domestic capacity and imports nearly all REMs used.
- REE magnet supply chain could take 3-4 years.
- High risk venture: It’s supply chain is highly capital and time intensive.
Initiative Taken
- National Critical Mineral Missions launched for self-reliance and recycling.
- Indian Rare Earths Limited (IREL) in talks with the Japanese and Korean companies to manufacture rare earth magnets commercially.
