Rare earths: India
This is a collection of articles archived for the excellence of their content. |
Indian Rare Earths Ltd (IREL)
1950- 2025
Surojit.Gupta, Nov 7, 2025: The Times of India
From: Surojit.Gupta, Nov 7, 2025: The Times of India
From: Surojit.Gupta, Nov 7, 2025: The Times of India
From: Surojit.Gupta, Nov 7, 2025: The Times of India
In 1950 — decades before the world woke up to rare earths — India set up Indian Rare Earths Ltd (IREL) to mine and process these strategic minerals. Seventy-five years on, with rare earths at the heart of EVs, electronics and defence supply chains, IREL should have been India’s spearhead. Instead, this taxpayer-funded PSU — one many readers may be hearing about for the first time — is a laggard, hobbled by stalled mines, dated technology and a half-vacant board.
IREL (now under the Department of Atomic Energy) runs plants in Kerala, Tamil Nadu and Odisha and supplies materials to nuclear, defence, space and a largely MSE (medium and small enterprise) customer base at home. It has stayed profitable, but insiders admit its competitiveness has eroded. Bureaucratic delays and a tight, state-controlled operating space have slowed expansion just as global demand took off.
“In our Tamil Nadu unit, from 1998 onwards, not a single mine has been allotted. The plant is running at 50% capacity because the mine is not allotted,” an official said, underlining how permitting logjams — CRZ, mangroves, forest clearances and dense habitation — have clipped production for years.
China Sets The Pace
The market IREL operates in is overwhelmingly China-dominated: roughly 60-70% of global mining and 85-90% of processing, according to IREL’s submission to a parliamentary panel in March this year. China’s reserves (44 million tonnes) are about 6.4 times India’s, and ore grades are far richer. Prices, supply and demand are effectively set in China, leaving India a price-taker. To be sure, China has also outpaced the US and Japan—how that happened, who holds the reserves, and what it means is explained in ‘How China cornered the rare earths and India fell behind’.
Governance & Capability Gaps
Even as global rivals scale up, IREL is hobbled by basic management gaps. Since Nov 2024, there has been no fulltime CMD; the director (finance) holds additional charge. All four independent director seats are vacant; board strength is half the sanctioned 12, the parliamentary committee noted in March. The PSU also cites technology and manpower constraints. Being removed from the US Entity List earlier this year should ease access to equipment, a senior official said, adding that upgrades are now “on a fast track.”
Profits & Production
While revenue and profit after tax have risen in recent years (see chart), tight market conditions have started to bite now. Production went up from 445 kilo tonnes per annum in FY20 to 532 KTPA in FY24 — a steady, but modest growth for a firm with a seven-decade headstart and a once-in-a-generation demand boom. An IREL official explained the steady rise in revenues and profits till 2023-24 on the addition of several value-added products, largely driven by the expansion of their Odisha unit. But the annual report of the company for FY25 is still unavailable on the website.
Officials said that it is under printing and would be uploaded soon. While the PSU has remained profitable, tight market conditions have hurt profits and sources say that provisional estimates show that profits could be down nearly 20% in FY25 compared with the previous year.
India produces about 8 of the 17 rare earths (lanthanum, cerium, praseodymium, neodymium, samarium, gadolinium, dysprosium and yttrium/samarium), mainly from beach-sand minerals such as monazite. But high-value steps — separation at scale, advanced alloys, magnets — remain thin. Result: value leaks abroad, and supply chains stay fragile.
Way Forward
IREL says it has tied up with Oil India, Coal India and NLC to chase critical mineral assets and is exploring overseas collaborations. Internally, it wants to triple capacity and claims that by 2031-32 it can meet much of domestic demand. That will require: (1) time-bound mine allotments; (2) board and leadership fixes; (3) fast-tracked procurement of corrosionresistant, solvent-extraction gear; (4) clear targets for separations and magnet-grade output, not just ore. As one official put it: “The country requires IREL to fast-track all its activities. Now, IREL has to live up to the expectations.”
KABIL—HOPE FOR NEW CAPABILITIES
The govt set up the Khanij Bidesh Nigam Ltd (Kabil) with three state-run companies — National Aluminium Company, Hindustan Copper, and Mineral Exploration and Consultancy — to ensure supply of critical and strategic minerals and also step up mineral security.
“Mandate of Kabil is to identify, explore, acquire, develop, mine, process, procure strategic minerals outside India for supplying primarily to India to meet domestic requirements due to its non- or meagre availability in the country and giving a big push to Make in India,” says the company’s website. The company started exploration activities in its lithium blocks in Argentina last year.
