Relevance: GS Paper II (IR); GS Paper III (Indian Economy, Critical Minerals)
Source: The Hindu analysis; Japan METI; Global REE market assessments

Introduction: Why Rare Earths Matter

Rare earth elements (REEs) are a group of 17 metallic elements crucial for modern technologies — EV motors, wind turbines, semiconductors, defence radars, missiles, smartphones, and advanced robotics.

Although not truly “rare”, they are difficult to extract and refine. China today controls 70–90% of global mining, processing, and separation capacity, giving it enormous geopolitical leverage.

A recent incident involving the Chinese Coast Guard blocking Japanese vessels revived global concerns about supply disruption — prompting Japan to expand its rare earth self-reliance strategy.

The Chinese Blockade: A Wake-Up Call

The crisis began in 2010, when China allegedly halted rare earth shipments to Japan after a maritime clash in the East China Sea. Prices skyrocketed, manufacturers scrambled for alternatives, and Japan experienced a shock that reshaped its national industrial policy.

This revealed a core risk: dependence on a single supplier can destabilise entire sectors — automotive, electronics, and defence.

Japan’s Response: Building Long-Term Mineral Resilience

Japan adopted a comprehensive strategy to diversify supply chains and reduce dependence on China.

Japan’s Core Strategy Pillars

By 2025, Japan has moved from crisis management to a structured, multi-source rare earth ecosystem.

Japan’s 2025 Self-Reliance Package: Key Thrust Areas

• Develop technologies to use alternative materials
  
• Expand recycling of magnets, batteries, and industrial scrap
  
• Promote foreign mining investments
  
• Strengthen supply chain governance
  
• Stockpile critical minerals and map strategic risks
  
• Cooperate with like-minded nations (U.S., Australia, EU, India) on critical minerals
  

The Global REE Geo-economics

China’s dominance is shaping global supply chains:

• It controls 60–70% of mining, 85–90% of processing, and 90% of magnet production.
  
• Countries fear coercive use of REE export controls.
  
• U.S., Japan, Australia, India are building alternative supply chains under the Supply Chain Resilience Initiative (SCRI).
  

India’s Rare Earth Dependency: A Growing Vulnerability

India imported ~2,700 tonnes of rare earths in 2023–24, up 23% from the previous year.
Of this, 65% came from China.

India’s Structural Challenges

• Single public-sector refiner (IREL) → limited domestic processing
  
• High cost and environmental challenges in extraction
  
• Weak linkages between mining, separation, and magnet manufacturing
  
• Heavy dependence on imported rare earth magnets for EVs and defence
  

What India Can Learn from Japan

Japan offers a practical roadmap for India’s own mineral security push.

India’s Critical Minerals Strategy (2023) is a step forward, but needs stronger implementation.

Key Takeaways

• Rare earths underpin both economic competitiveness and national security.
  
• China’s dominance creates strategic vulnerabilities for all major economies.
  
• Japan’s long-term diversification offers a credible blueprint for India.
  
• India must invest in mining, refining, recycling, and overseas partnerships to secure its green and digital transitions.
  

One-line wrap: Japan’s rare earth strategy shows how nations can break strategic dependence on China and build resilient, multi-source mineral ecosystems.

UPSC Mains Question:
“Why are rare earth elements strategically important? Assess India’s vulnerabilities and the lessons it can learn from Japan’s rare earth diversification strategy.”