India is an ambitious powerhouse that aspires to become a world leader in technologies like advanced ballistics systems, industrial machinery, semiconductors, IT, electric vehicles and clean energy systems. However, such technological advancement demands reliance on rare earth metals, which have important applications in all kinds of modern technologies. Yet, India still imports most of its rare earth needs in finished form from its geopolitical rival, China, which controls 70 per cent of the global production in rare earth metals.
It isn’t as if India doesn’t have rare earth reserves. India is estimated to have the world’s fifth-largest reserves of rare earth elements, nearly twice as much as Australia. However, the country has failed to tap into those resources due to tight regulation and excessive government control. However, this is bound to change as India opens up to beach sand minerals mining.
India’s Beach sand mining reserves:
Significant rare earth minerals found in India include ilmenite, sillimanite, garnet, zircon, monazite and rutile which are collectively called Beach Sand Minerals (BSM). India has almost 35 per cent of the world’s total BSM deposits.
If India taps into its BSM deposits, it can grab a healthy share in the global rare earth supply chains. A government organisation named Indian Rare Earths Limited, IREL, currently has a monopoly over monazite beach sand, the primary mineral that contains rare earth metals.
Monazite beach sand is found in India’s coastal states and is a goldmine of sorts given all the industrial uses of rare earth metals in sectors like smartphones, missiles and electric vehicles.
However, presently, IREL simply produces rare earth oxides and sells them to foreign firms which supply the finished products and harvest huge profits. Moreover, the only other purpose of IREL is to supply thorium (extracted from monazite) to the Department of Atomic Energy. Thus, IREL or the work it undertakes has little to no significance in the global market or the domestic consumption market.
The Ministry of Mines and the Directorate General of Foreign Trade too had restricted private sector involvement and allowed export of BEM only through State-owned canalising agents. This meant that even if there was a private player in the tightly regulated sector, it would not be able to add any value to India’s rare earth export sector.
Allowing beach sand mining in India:
The Modi government understands that beach sand mines are treasure troves and tapping into them is the key to controlling a significant share in the global rare earth supply chains. Therefore, the latest action plan prepared by the Centre proposes opening up two restricted sectors- beach sand minerals and offshore mining, for exploration activity by private players.
The Modi government is reversing a series of actions taken over the last five years to cut down the role of the private sector in other to avoid illegal mining.
Indian Express had earlier reported that the Centre prepared a 60-point action plan following a meeting of Prime Minister Modi with the Secretaries of all Departments and Ministries.
The action plan stated, “Two Sectors are currently restricted – Beach sand minerals (only Department of Atomic Energy can do mining) and Offshore mining (currently only through PSUs). A High level Committee may be set up for opening up these two sectors for exploration and production by private sector.”
The Modi government is introducing some milestone reforms in beach sand mining which reverse its earlier policy decisions in this sector.
Moreover, beach sand mining was progressively restricted since 2015 by the NDA government. Earlier, private players involved in beach sand mining were required to get a licence from the AERB (Atomic Energy Regulatory Board). As a part of the licensing conditions, the miners were supposed to separate the beach sand minerals and dispose of the tailings containing monazite in the company premises or as backfill.
After 2015, the activities of the private players in beach sand mining were reduced drastically as licenses were not renewed by the AERB under the Atomic Energy (Radiation Protection) Rules 2004 over radiological safety concerns.
A July 2021 Department of Atomic Energy (DAE) on “restricting illegal mining” categorically acknowledged that sand beach mining by private enterprises has “been terminated” as a part of a broader effort to curb illegal mining.
With global earth geopolitics heating up, the present circumstances incentivise cashing in on the rare earth metals reserves. The Modi government realises this and this is why it is opening up beach sand mining to private players despite its earlier reluctance. India’s rich BSM deposits are an economic goldmine and the Modi government doesn’t want to miss out on the opportunity of capitalising on it.
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