What are rare earth permanent magnets?

• The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the ‘Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets’ with a financial outlay of Rs 7,280 crore on November 26. 

• This first-of-its-kind initiative aims to establish 6,000 Metric Tonnes per Annum (MTPA) of integrated Rare Earth Permanent Magnet (REPM) manufacturing in India, thereby enhancing self-reliance and positioning India as a key player in the global REPM market.

• The scheme aims to reduce the country’s dependence on China for critical inputs used by a host of electronic and automotive industries.

Rare earth permanent magnets

• Rare Earth Permanent Magnets (REPMs) are one of the strongest types of permanent magnets and are vital for electric vehicles, renewable energy, electronics, aerospace, and defence applications.

• There are two types of REPMs: neodymium-iron-boron (NdFeB) magnets and samarium cobalt (SmCo) magnets. 

• SmCo magnets are more resistant to demagnetisation at higher temperatures than NdFeB magnets and are thus more suitable for high-temperature applications where weight is not a concern.

• NdFeB magnets are the strongest magnets commercially available and provide a host of benefits to existing and emerging technologies, including clean energy and defence technologies, consumer electronics, power tools, sensors, machines, and many other technologies.

• Driven by the rapidly growing demand from electric vehicles, renewable energy, industrial applications, and consumer electronics, India’s consumption of REPMs is expected to double by 2030. 

• At present, India’s demand for REPMs is met primarily through imports. 

• With this initiative, India will establish its first-ever integrated REPM manufacturing facilities, generating employment, strengthening self-reliance and advancing the nation’s commitment to achieve Net Zero by 2070.

China dominates rare earth magnet industry 

• The majority of the world’s rare earth elements production occurs in China, followed by the United States, Burma, and Australia, with smaller amounts coming from Madagascar, Russia, India, and Brazil. 

• The largest single source of rare earth elements in the world is the Bayan Obo mine in the Inner Mongolia autonomous region in China.

• The production of rare earth ores and refined oxides is largely concentrated in a few regions, with China leading in mining, processing, and magnet manufacturing, raising significant supply security concerns and price volatility risks.

• In April, China implemented strict export licensing on rare earth elements like terbium and dysprosium which are key inputs for high-performance NdFeB magnets.

• India is working on expanding domestic production and alternative supply sources to reduce its dependence on China.