India Has World’s 3rd-Largest Rare Earth Reserves But Why Is It Producing Less Than 1% Of Global Output While China Dominates? Explained

India has the world’s third-largest rare earth reserves, but its production remains among the lowest compared to major global players, highlighting a sharp gap between resource availability and actual output, according to a report by Amicus Growth.

Data showed that India holds about 6.9 million tonnes of rare earth oxide (REO) reserves, placing it behind only China and Brazil. China tops the list with 44 million tonnes of reserves, followed by Brazil with 21 million tonnes.
Other countries with notable reserves include Australia (5.7 million tonnes), Russia (3.8 million tonnes), Vietnam (3.5 million tonnes) and the United States (1.9 million tonnes).

Despite its strong reserve position, India’s production remains limited. In 2024, India produced only 2,900 tonnes of rare earths, ranking seventh globally. In comparison, China produced 270,000 tonnes, making it the clear global leader. The United States was the second-largest producer with 45,000 tonnes, followed by Myanmar (31,000 tonnes). Australia, Thailand and Nigeria each produced around 13,000 tonnes.
The report highlighted that India holds nearly 6-7 per cent of global rare earth reserves, yet contributes less than 1 per cent of global production.

Most of India’s reserves are found in monazite-rich coastal sands, which also contain thorium, a radioactive element. This makes mining and processing more complex and subject to strict regulations.

According to the report, regulatory challenges have historically slowed rare earth mining in India. For decades, production was largely restricted and handled mainly by Indian Rare Earths Limited (IREL), where rare earth elements were treated as by-products rather than strategic resources.

Beyond mining, the report pointed to processing and refining as the biggest challenge. While rare earth reserves exist in several countries, processing capacity is heavily concentrated.

China controls about 90 per cent of global rare earth refining capacity and almost the entire processing of heavy rare earth elements. This gives China a major advantage across the entire value chain.
India, on the other hand, has very limited processing and refining capacity.

The report stated, “Annual production has been only a few thousand tonnes, and India has played virtually no role in global REE trade”.

As a result, it has played a minimal role in the global rare earth trade. While a Japan-linked joint venture in Visakhapatnam has marked India’s return to the rare earth sector, the scale remains small.

Globally, rare earth reserves are estimated at around 90-110 million tonnes of REO. China alone holds nearly half of these reserves, strengthening its dominance in both supply and production.

The report concluded that India’s challenge is not a lack of resources, but gaps in execution, processing capacity and value-chain integration. Unless these issues are addressed, India’s large reserves may not translate into global influence in the rare earth sector.

(With inputs from ANI)

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