Hindustan Zinc eyes rare earth minerals, but production may take 5 years

Business Standard

3 days ago

Vedanta subsidiary Hindustan Zinc has set its sights on rare earths as India looks to reduce its dependence on China for critical minerals. The company, hailed the world's second largest zinc producer, has said that while it plans to mine rare earth minerals, it could take up to five years before production begins.
In an interview with Nikkei Asia, CEO Arun Misra said Hindustan Zinc plans to mine and process neodymium, a key rare earth element used in permanent magnets for electric vehicles (EVs), wind turbines, and electronics.
The company recently won India's first private-sector bid for a monazite mining block in Uttar Pradesh. Monazite is a mineral rich in neodymium. But production timelines remain lengthy, as exploration alone could take three to four years.
'This is of strategic interest to India,' Misra told Nikkei Asia. 'But first we have to evaluate the reserves.'
India moves to reduce reliance from China
The mining of rare earth minerals has become urgent in recent months as China cracked down on its exports of terbium and dysprosium, critical to neodymium-based magnets. China's scrutiny follows US President Donald Trump's changes to the US trade policy, which threatened tariffs, specifically targeting Beijing. China has also been receiving pushback from key trade partners, including the European Union, over its exports. China's action, in turn, severely disrupted global supply, especially impacting auto manufacturers and semiconductor producers.
Between 2019–20 and 2023–24, India imported a total of 9,728 tonnes of rare earth elements (REE), averaging approximately 1,946 tonnes per year, government data shows. The majority of these imports came from China, followed by Japan, Russia, South Korea, the United States, Austria, France, Hong Kong, and other countries. Despite ongoing efforts, India continues to depend heavily on imports, particularly from China, to meet its REE requirements.
India's monazite reserves locked behind regulation
As of March 2021, India holds an estimated 12.73 million metric tons of monazite, mostly along beach sands in Kerala, Tamil Nadu, Andhra Pradesh, and Odisha, according to the Indian Mineral Yearbook (2023).
But these reserves remain off-limits to private players due to the mineral's high thorium content, which is regulated under the Atomic Energy Act and reserved for public-sector mining. Misra argues that opening up these resources to companies like Hindustan Zinc could drastically cut development timelines.
'If monazite is decontrolled and private participation allowed, it will help India make magnets,' he said.
China, by contrast, processes neodymium from bastnaesite, a mineral with far less thorium. That keeps extraction costs low and helps explain why China accounts for 68.8 per cent of global rare earth output, according to a report by EY. India, despite holding 6.27 per cent of the world's reserves, contributes less than 1 per cent to global production.
The difference is more than technical. It's economic.
'There's a huge difference in operational costs,' Misra noted.
Hindustan Zinc's diversification into critical minerals
Hindustan Zinc has begun diversifying its mineral portfolio, acquiring potash and tungsten blocks, and aims to derive 30 per cent of revenue from critical minerals within five years.
'We like to work in sectors that are difficult—and not attractive to other big players,' Misra said.