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China has signalled a tentative easing in rare earth supply tensions, pledging to address India’s critical needs even as it quietly lifted restrictions and sharply increased overall rare earth exports, the sector restarting a delicate balancing act between diplomacy and dominance, Mining Zimbabwe can report.
By Rudairo Mapuranga
Amid faltering supply chains, Indian officials have confirmed that China has agreed to address India’s rare earth requirements, alongside commitments on fertilisers and tunnel boring machines, as the two countries seek to thaw trade relations mired in regional tensions. Although India is blessed with the third-largest rare earth reserves globally, estimated at 6.9 million tonnes, it lacks indigenous magnet production capabilities and remains heavily reliant on Chinese supply.
Simultaneously, customs data shows that China’s rare earth exports rose 69% in July to 6,422 tonnes, marking the highest levels recorded since January. This rebound comes after China imposed export curbs in April and May in response to U.S. tariff measures, sending shockwaves through global automakers and high-tech industries.
For India, China’s pledge represents a short-term lifeline but not a solution. While diplomatic assurances are welcome, India’s domestic capability remains small, producing even less rare earth than its smaller rivals. The recent export recovery may restore supplies, but deeper resilience requires industrial self-sufficiency.
India has already responded with its own measures. A National Critical Mineral Mission worth ₹343 billion (approximately US$4–5 billion) is underway to boost rare earth mining and processing. The government has also allocated ₹1,345 crore (approximately US$160 million) to establish domestic rare earth magnet production, with mainstay firms like Mahindra & Mahindra and Uno Minda involved.
This push for homegrown capacity comes amid growing concerns that China could weaponise its dominance of rare earth processing, where it controls over 90%, as a strategic tool. India must move quickly to shift from diplomacy to deliverables. Through exploration, strategic partnerships including with Australia, Argentina, and the U.S., and battery-to-magnet manufacturing initiatives, India seeks to turn its latent potential into tangible security.
China’s dual strategy, diplomatic assurances to India and export relief, reflects its cautious repositioning amid diplomatic overtures to New Delhi. It also sends a message to global consumers: Beijing still holds the rare earth lever, and supply flows remain under its control.
For India, this is neither a reprieve nor a victory. It is a clear reminder that supply security requires self-reliance. Investments in domestic capability, partnerships with trustworthy international suppliers, and policy reforms across mining, refining, and manufacturing will determine how effectively India can shield itself from future jolts.
