Author: Aditya Pareek | EQMint | Opinion article

For more than a century, oil and gold have shaped global wealth, power, and politics. Oil fueled industrial revolutions, economic growth, and military expansion, while gold underpinned currencies and provided stability during crises. But as the world accelerates toward electrification, digitalization, and decarbonization, a new class of materials is emerging as the cornerstone of the 21st-century economy — Rare Earth Elements (REEs).

These metallic minerals are quietly becoming the most strategic resources of our time — powering everything from electric vehicles (EVs) and smartphones to wind turbines, fighter jets, and quantum computing systems. In many ways, rare earths are to this century what oil was to the last: indispensable, finite, and deeply geopolitical.

What Are Rare Earths and Why They Matter

Rare earths refer to a group of 17 metallic elements found in the Earth’s crust, each possessing unique magnetic, luminescent, and electrochemical properties that make them crucial for modern technologies.

• Neodymium and Praseodymium are essential for producing the permanent magnets used in electric vehicle motors and wind turbine generators.
• Terbium and Dysprosium are key for enhancing heat resistance in advanced magnets, making them vital to both military hardware and renewable energy systems.
• Yttrium, Europium, and Lanthanum play pivotal roles in electronics, displays, and battery technologies.

Without these elements, the world’s green and digital transitions would grind to a halt. Every EV motor, satellite, jet engine, and defense radar depends on them — making REEs the “invisible backbone” of modern civilization.

In short, rare earths are the new oil, powering the engines of progress in the 21st century.

The Geopolitical Concentration

The strategic importance of rare earths becomes clearer when considering their unequal global distribution. While over 30 countries possess some level of REE deposits, only a handful control meaningful reserves.

• China commands nearly 45% of the world’s reserves.
• Brazil follows with 23%, while India holds about 6% — more than the U.S., Russia, and Australia combined.
• Together, China, Brazil, and India account for nearly 75% of global reserves.

However, resource ownership tells only half the story. The real dominance lies in processing and refining capacity, where China has a near-monopoly — controlling almost 90% of global refining and separation operations.

This dominance is no accident. Since the 1990s, China has strategically invested in rare earth mining, refining, and downstream manufacturing, recognizing their long-term geopolitical value. By making early moves, Beijing ensured that it would control not just the resources but the entire value chain — from raw material to finished technology.

China’s Leverage and Global Dependence

China’s control over rare earths gives it significant geopolitical leverage. Nearly every industrial economy — including the United States, Japan, South Korea, and the European Union — relies heavily on Chinese exports for key components in their electronics, EVs, and defense industries.

This dependence has already been weaponized in the past. In 2010, during a maritime dispute with Japan, China restricted rare earth exports, disrupting global supply chains and sending prices soaring.

The situation mirrors oil geopolitics of the 1970s, when OPEC nations wielded energy as a tool of influence. But the difference is starker — while oil has alternatives (like renewables), rare earths do not.

Moreover, the environmental cost of mining and refining rare earths is enormous, often involving toxic chemicals and radiation hazards. Western nations, constrained by environmental standards, have been reluctant to ramp up domestic production, inadvertently cementing China’s dominance.

“China’s rare earth monopoly is not just an economic advantage; it’s a strategic weapon,” notes a global trade analyst. “In an era defined by technology and clean energy, this control translates to geopolitical power.”

The Value Shift: From Oil and Gold to Rare Earths

For centuries, nations fought for oil fields and gold mines. The next great resource race will be over rare earth supply chains.

Unlike oil, which faces renewable substitutes, or gold, which stores rather than creates value, rare earths are irreplaceable. There are no viable alternatives for the magnetic and conductive properties that make them indispensable in clean energy and defense technologies.

As global electrification intensifies, demand for rare earths is projected to increase sixfold by 2045. Prices are expected to rise 12–18% annually, driven by limited supply, rising technological adoption, and the slow pace of developing new mines.

This growing scarcity is shifting global wealth and influence toward countries that can mine, refine, or secure access to REEs — making rare earths the “new oil” of a carbon-free economy.

India’s Untapped Potential

With roughly 6% of global rare earth reserves, India stands at a strategic inflection point. These deposits, concentrated in coastal and mineral-rich states such as Odisha, Tamil Nadu, Kerala, and Andhra Pradesh, hold immense potential for India’s energy transition, defense manufacturing, and EV revolution.

However, India’s rare earth value chain remains largely underdeveloped, with limited refining capacity and export restrictions preventing large-scale commercialization. To unlock this potential, India must focus on:

• Public–private partnerships for mining and refining technologies.
• Sustainable extraction practices to minimize ecological damage.
• Collaborations with friendly nations such as Japan, the U.S., and Australia to develop secure global supply chains under frameworks like the Quad Critical Minerals Initiative.

If India can strengthen its rare earth capabilities, it could emerge as a global supplier for clean technologies and strategic defense industries — reducing its import dependency and enhancing its geopolitical standing.

“India’s rare earths could become its lithium moment — a catalyst for green industrialization and strategic autonomy,” said a senior policy analyst at NITI Aayog.

Beyond Mining: Building a Rare Earth Economy

Developing REE reserves is not just about extraction. The true value lies in creating an integrated rare earth economy — spanning mining, refining, magnet manufacturing, and high-tech applications.

This will require India to:

• Invest in advanced refining technologies to overcome environmental hurdles.
• Encourage domestic manufacturing of EV motors, wind turbines, and electronic components using indigenous rare earth materials.
• Establish a Rare Earths Mission — similar to the Indian Space Research Organisation (ISRO) — to coordinate exploration, R&D, and global partnerships.

Such an approach could position India as a strategic alternative to China in the global rare earth market while supporting its own energy independence and industrial innovation goals.

The Future of Global Power

The world is witnessing a paradigm shift — from fossil fuels to functional materials, from energy economies to element economies. Rare earths are at the heart of this transformation, powering the technologies that define the modern era — AI, EVs, satellites, and smart grids.

In the coming decades, control over rare earth supply chains will shape economic competitiveness, national security, and climate leadership.

Just as oil-rich nations dictated the geopolitics of the 20th century, countries with access to rare earths — or those that master the technologies to refine and recycle them — will define the balance of power in the 21st.

“The next global resource war won’t be fought for oil wells — it will be fought for control over the periodic table,” quipped an energy strategist.

Conclusion

Rare earths are more than just minerals — they are the strategic currency of the next global economy. As industries evolve toward green and digital technologies, their demand will reshape trade, diplomacy, and innovation itself.

For India, the opportunity is historic. By investing in responsible extraction, technology-driven refining, and strategic alliances, the country can not only secure its own clean energy future but also become a leader in the rare earth revolution.

The race for rare earths is already underway — a contest not for fuel, but for the very elements that fuel the future.

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Disclaimer: This article is based on publicly available data, expert commentary, and industry insights on global rare earth markets. It is intended solely for informational and educational purposes. The views expressed are those of the author and do not constitute investment, financial, or policy advice. Readers are encouraged to conduct independent research and consult professional advisors before making any investment or strategic decisions related to rare earths or associated sectors.