Overview of Rare-Earth Magnets in India
Rare-earth magnets are critical components in the production of electric vehicles (EVs), hearables like AirPods, drones, and other technologies. Despite their small presence in the bill of material, they are indispensable. Recent restrictions by China, the dominant supplier, have severely impacted supply chains globally and especially in India.
China's Dominance and Strategy
- China controls 90% of the global production of rare-earth magnets and over 70% of rare-earth elements.
- China identified rare earths as strategic in the 1980s, leveraging low labor costs and lax environmental regulations.
- It used technology from Japan and the US to produce cost-effective rare-earth magnets.
- In 2010, China used rare earths as a trade weapon against Japan, halting supplies during a maritime dispute.
Global Demand and Future Supply Concerns
- The demand for rare-earth magnets is expected to double by 2035, with significant increases in India.
- McKinsey predicts a 30% shortfall in supply by 2035, and Adams Intelligence suggests China may cease exports as its domestic demand could rise to 400,000 tonnes.
Japan's Response and Strategy
- Japan reduced its dependence on China to 60% and is diversifying its sources.
- Strategies include stockpiling, recycling, and developing alternative technologies for magnets.
India's Initiatives and Challenges
- Companies like Ola Electric and TVS are exploring ferrite magnets as alternatives.
- The government is working on mid-to-long-term plans, including a ₹18,000 crore allocation for the Critical Mineral Mission.
- A Production Linked Incentive (PLI) scheme is proposed to support local rare-earth magnet production.
- Efforts are underway to establish collaborations with countries like Japan, Australia, and the US.
Key Rare Earth Metals and Their Applications
- Neodymium: Used in electric motors, drones, radar systems, and wind turbines.
- Cerium: Utilized in catalytic converters and glass polishing.
- Dysprosium: Enhances heat resistance in EVs and jet engines.
- Praseodymium: Alloys with neodymium for improved magnet performance.
- Europium and Terbium: Employed in LED lights and screens.
- Yttrium: Found in high-performance camera lenses.
- Gadolinium: Used in sensors and medical wearables.