Reliance, Vedanta, Adani to Cut China Rare Earth Dependence
Reports indicate that Indian industrial entities Reliance, Vedanta, and Adani have expressed interest in creating facilities to process the significant reserves of rare-earth minerals in Andhra Pradesh state, which are becoming increasingly vital.
As New Delhi aims to reduce India's reliance on China for rare earths, these three companies are part of roughly 10 that have shown interest in establishing rare earth facilities in the southern state.
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According to a draft document, Andhra Pradesh contains 211 million metric tons of beach sand mineral resources, including rare earth elements, distributed among 16 recognized coastal deposits. According to the Geological Survey of India, India possesses 482.6 million tons of rare earth ore resources.
The interest arises as New Delhi intensifies initiatives to develop local rare earth mining, processing, and magnet production capabilities, while Andhra Pradesh seeks to draw in 500 billion rupees ($5.2 billion) in rare earth and titanium investments in the coming ten years.
The proposals were outlined in a preliminary government paper. Andhra Pradesh was one of the four states noted in February’s federal budget for the establishment of rare earth “corridors” encompassing mining, processing, and magnet manufacturing.
The initiative came after New Delhi endorsed a 73 billion rupee program in November to aid rare earth magnet production.
Rare earth elements are crucial for permanent magnets utilized in electric vehicle motor applications. Though India possesses significant rare earth reserves, it does not have industrial-scale facilities capable of processing these minerals to high purity standards.
Reports indicated that Andhra Pradesh intends to release tenders for rare earth facilities after obtaining cabinet approval for its rare earth corridor policy, anticipated within a month.
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The sources indicated that the state intends to provide capital-linked incentives and further benefits for projects with investments of 10 billion rupees or above.
Andhra Pradesh has been seeking substantial investments, drawing in firms like Google and ArcelorMittal Nippon Steel, and aspires to achieve $1 trillion in investment pledges by 2029, a state minister informed Reuters last November.
Other companies, such as Mahindra & Mahindra, a top automotive manufacturer, have been tackling rare earth magnet shortages essential for electric vehicle production due to China’s export limitations. The company is investigating local manufacturing collaborations and engineering options instead of direct participation in rare earth mining.
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Following China's export restrictions in 2025 that impacted supplies for electric vehicles and automotive parts, Mahindra obtained alternative sourcing for nine months and stockpiled using substitutes such as ferrite materials and light rare earths. Mahindra and auto components manufacturer Uno Minda are assessing the production of rare earth magnets in India to lessen dependence on China, awaiting government support and access to raw materials.
Currently, India is addressing China's influence through ‘friendshoring,’ which involves sourcing raw materials, components, or manufacturing from reliable partner nations instead of competitors or cost-effective rivals. Coal India’s global ventures, for example, take advantage of oversupply threats stemming from Beijing’s control, while KABIL’s participation in the Minerals Security Partnership (MSP) aligns with the US, Australia, and Japan within the Quad Critical Minerals Initiative.