India woos explorers of rare earth minerals used in missiles and lasers

By Swansy Afonso and Archana Chaudhary

India is set to issue new policy guidelines to encourage more private-sector exploration for the so-called rare earth minerals used in everything from mobile phones to lasers and cruise missiles.

The framework due by the end of June will demarcate a total area of 1,000 square kilometers (386 square miles) where companies can search for rare earths, and introduce auctions for the right to explore for the deposits, according to mines secretary Balvinder Kumar.

"At the moment it isn’t clear about who can explore which areas," Kumar said in an interview Tuesday in New Delhi. "There will be clarity now."

India has one of the world’s bigger reserves of rare earths, a group of obscure minerals produced mostly by mines in China. Prime Minister Narendra Modi’s government is trying to cut the complex red tape and land acquisition hurdles that have prevented the nation from fully exploiting not just rare earths, but also rich seams of resources such as coal, bauxite and gold.

The region to be earmarked for exploration includes states such as Kerala and Tamil Nadu, according to Kumar, with another 400 square kilometers set aside exclusively for state-run companies to search for uranium and thorium.

Royalties
Following a policy change last year, explorers now have to bid in auctions for the right to mine deposits they find. For critics, that leaves little incentive to scour the world’s seventh-largest land mass for minerals and metals, since the discoverer could lose the find to another bidder.

The government plans to introduce a system of royalties for explorers over the life of a mine to help plug the gap.

Even though used in small quantities, rare earth elements are key components in high-technology products, ranging from mobile phones to electric cars to defense guidance systems.

State-run Indian Rare Earths Ltd. helped the nation mine 2,800 metric tons of such ore in 2013, or 2.5 per cent of the global total, according to a presentation by the company citing US Geological Survey data. The USGS’s latest Mineral Commodity Summaries report doesn’t provide Indian output numbers for 2014 and 2015.

The new framework due this month should help private companies explore for minerals such as monazite, said Vaikundarajan Subramanian, director of Chennai-based miner V. V. Mineral Pvt.

The rare earths produced could in turn encourage local manufacturing of products such as optical equipment, lasers and missile-guidance systems, he said.