India and South Africa's strategic push to diversify the rare earths supply chain

Amid growing global demand for rare earth elements (REE) and Beijing's stranglehold on the supply of REE, a crucial bargaining chip in the US-China trade war, India and South Africa are poised to increase their output of this critical component that fuels much of modern-day technology.

Rare earth minerals are a group of 17 metallic elements that are not really "rare" but are difficult and costly to extract and process, because they are typically dispersed and mixed with other minerals in the Earth’s crust.

India is planning to triple its incentive programme for the production of rare earth magnets, while South Africa is getting ready to start the extraction of rare earth minerals at its Rainbow Rare Earths project in Limpopo by 2027.

China currently dominates the supply chain for rare earths, which are critical in everyday technologies, from smartphones and flat-screen television sets to Electric Vehicles (EVs), renewable energy, defence systems and satellites. They’re also crucial for MRI scanners, lasers and cancer treatments.Such is the importance of rare earths that US President Donald Trump recently pedalled back on his tariff war with China because of his country’s dependence on REE.

Beijing, which processes about 90% of the global output, had threatened a ban on rare earth exports, tightening export controls and disrupting supplies for automakers worldwide,amid its trade dispute with the US. In moves to lessen dependence on China, India, which holds the third-largest global rare earth reserves (about 8% of the world's total) but contributes less than 1% to global mining, is accelerating efforts to develop a supply chain for rare earth magnets. These are the finished products created by combining the raw REE elements with other metals, and are essential for miniaturisation and efficiency in modern technology, powering everything from portable phones to sophisticated military guidance systems.

India imported over 50 000 tonnes of rare-earth magnets in 2024–25 compared to less than 3,000 tonnes of domestically produced REE. This was largely due to outdated facilities, limited R&D, and historic bans on private participation that stifled innovation.Strict labour and environmental regulations also hampered expansion, unlike China’s rapid but environmentally damaging and unsustainable growth.To bridge the gap, the Indian government launched the National Critical Minerals Mission (2025).

Efforts to increase domestic production received further impetus with New Delhi’s plan to almost triple the size of its incentive programme for manufacturing rare earth magnets. India’s finance ministry has reportedly approved the proposal to invest $788 million in rare earth magnet processing units and the supply chain.

South Africa, though not a major producer of rare earths, has significant reserves of REE, holding about 2% of the global total with Tanzania. It is home to the high-grade Steenkampskraal rare earths mine in the Western Cape, which has among the world's richest deposits of rare earths.Then there is the Rainbow Rare Earths project in Phalaborwa, Limpopo, designed to clean up environmental waste from a former phosphoric acid plant to extract rare earths, which is due to begin production in late 2027, positioning the country as a producer of separated rare earth oxides outside of Asia.

Phalaborwa has high amounts of neodymium (Nd) and praseodymium (Pr) oxides, which are important for manufacturing the magnets used in electric cars, wind turbines,and other clean energy technologies. Phalaborwa also has deposits of valuable dysprosium (Dy) and terbium (Tb) oxides, which are used in specialised applications like phosphors, lasers, and ceramics.

In an uncertain and volatile geopolitical environment where countries are increasingly having to assert their economic independence to prosper, India and South Africa have grasped the nettle by seeking to strengthen their domestic output of rare earths, which are critical to their survival in a highly technological global environment. 

Fawzia Moodley is a freelance reporter. 

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