Archive · 10 Nov 2025
Foreign Firms Assure Rare-Earth Oxide Supply for India's Magnet Production Scheme
Imagine India wants to make its own special magnets for electric cars, but it needs special ingredients called rare-earth oxides.
Most of these ingredients come from China, which has recently stopped sending as many to India.
So, India is creating a plan, called a PLI scheme, to help companies build factories to make these magnets.
But there's a problem: India doesn't have enough rare-earth oxides by itself.
Only one Indian company can make a small amount, so India would need to import a lot.
To solve this, big mining companies from other countries like the UK and Australia have told India they have enough rare-earth oxides and are ready to sell them to the Indian factories.
Even India's own company is trying to make more.
The Indian government is talking to these foreign companies and looking at new local mining projects to make sure there will be enough ingredients for the new magnet factories.
Foreign mining firms, including Rainbow Rare Earths and Lynas Rare Earths, have assured India of sufficient rare-earth oxide supply for its upcoming magnet production scheme.
The Indian government's PLI scheme aims to establish five plants with a capacity to produce 6,000 tonnes of rare-earth permanent magnets (REPMs) annually.
India needs approximately 1,500 tonnes of rare-earth oxides for this production, with its domestic supplier IREL only able to provide around 500 tonnes.
A shortfall of about 1,000 tonnes of rare-earth oxides necessitates imports, raising concerns for the Department of Expenditure about shifting dependence from finished magnets to raw materials.
In addition to foreign supply assurances, India is increasing domestic oxide production through IREL and new beach sand mining projects.
- Who
- Foreign mining and refining companies (Rainbow Rare Earths, Lynas Rare Earths, Iluka Resources), Indian government ministries (MHI, Department of Expenditure, Department of Atomic Energy), and Indian companies (IREL, BHEL).
- What
- Foreign mining firms have assured sufficient supply of rare-earth oxides for India's planned indigenous manufacturing of rare-earth permanent magnets (REPMs) under a production-linked incentive (PLI) scheme.
- When
- Assurances given following discussions and in anticipation of the PLI scheme launch; China's export restrictions began in April.
- Where
- India (manufacturing plants, mining projects) and international sources for raw materials.
- Why
- To ensure adequate supply of rare-earth oxides for domestic REPM production, reduce dependence on China, and mitigate concerns about shifting import reliance from magnets to oxides.
Assurances of Supply
Concerns and Current Shortfalls
Rare-Earth Oxide Availability
Assurances of Supply
Major foreign mining and refining companies like Rainbow Rare Earths, Lynas Rare Earths, and Iluka Resources have assured sufficient rare-earth oxide stocks for years, willing to enter long-term contracts. Indian company IREL is also working to increase its output, and new domestic beach sand mining projects are emerging.
Concerns and Current Shortfalls
Despite assurances, India currently has a significant shortfall of rare-earth oxides, requiring an estimated 1,000 tonnes to be imported annually for the proposed PLI scheme. The Department of Expenditure (DoE) is concerned this merely shifts import dependence from finished magnets to oxides.
Indigenous Manufacturing Capability
Assurances of Supply
The PLI scheme aims to establish five manufacturing plants with a capacity of 6,000 tonnes per year for indigenous Rare-Earth Permanent Magnets (REPMs), aiming to reduce reliance on China.
Concerns and Current Shortfalls
The scheme primarily focuses on converting rare-earth oxides into REPMs, but India currently lacks adequate domestic oxide supplies, leading to concerns about the long-term strategy for securing these critical elements.
- Key Companies Assuring Supply
- Rainbow Rare Earths (UK), Lynas Rare Earths (Australia), Iluka Resources (Australia)
- Nodal Ministry for PLI Scheme
- Ministry of Heavy Industries (MHI)
- Planned REPM Production Capacity
- 6,000 tonnes per year
- Estimated Rare-Earth Oxide Requirement
- 1,500 tonnes per year
- IREL's Current Oxide Output
- Approx. 500 tonnes per year (aiming to increase to 800-1,000 tonnes)
- Estimated Import Requirement for Oxides
- 1,000 tonnes per year (potentially reduced to 500-700 tonnes)
- China's Share of Global REPM Production
- Approx. 90%
- China's Export Restrictions to India
- Since April
