Daily News Analysis ‘Rare Earth Corridors & Critical Minerals (Budget 2026-27)’ : 2 February

Why in News: 

• The Union Budget 2026-27 announced support for establishing ‘Rare Earth Corridors’ in four mineral-rich states to build domestic capacity and reduce dependency on imports.

About the Corridors and Rare Earth Elements (REEs)

• Target States: The corridors will be established in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu, known for their rich beach sand mineral deposits (monazite sands).
• Objective: To create a domestic ecosystem covering the entire value chain: mining, processing, research, and manufacturing of critical minerals.
• Why Needed (China Dominance): China controls the global supply chain, holding nearly 50% of reserves, over 60% of production, and 92% of global refining capacity. India currently imports over 45% of its rare earths from China.
• What are REEs?: A group of 17 metallic elements: the 15 lanthanides plus Scandium and Yttrium.
  • Classification: Divided into Light Rare Earths (e.g., Lanthanum, Cerium) and Heavy Rare Earths (e.g., Terbium, Dysprosium).
  • Exception: Promethium is usually excluded from commercial lists because it is radioactive and does not occur in mineable quantities.
• Applications: Critical for modern technology including Electric Vehicles (EVs), wind turbines, defense equipment (missiles), smartphones, and hard drives.