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Environment|Export|Lifting|Mining
Environment|Export|Lifting|Mining
environment|export|lifting|mining

Chinese-US rare earth war could prompt India to overturn beach sand ban

28th June 2019

By: Ajoy K Das

Creamer Media Correspondent

     

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KOLKATA (miningweekly.com) – Rising trade tensions between the US and China and the latter's threatening to leverage rare earth supplies in the trade war are likely to prompt the Indian government to reverse the ban on private beach sand mining imposed earlier this year.

With China expected to tighten global supplies of rare earths in retaliation for US trade restrictions and already rising prices, the Indian government could revoke the ban on private beach sand mining fearing that government companies alone will not be able to cope with rapidly changing supply dynamics.

In fact, on the contrary, the government could also consider opening up rare earth processing to the private sector, until now the sole preserve of the government-owned Rare Earths India Limited (REIL). This on the premise that if China, with estimated total rare earth processing capacity of 220 000 t/y, five times that of global capacity, was to turn the tap off, India would need to rapidly build up domestic processing capacities.

Government officials in India say that while China has sent signals that it will use rare earth supplies to retaliate in its trade skirmish with the US, it can not necessarily be assumed that lower supplies to US will result in higher availability in other markets, hence India will need to focus on increasing its own domestic supplies.

The Federation of Indian Mineral Industries (FIMI) has already petitioned the government to lift the ban on private beach sand mining.

It has argued that the ban had been imposed in reaction to illegal mining of beach sand, which was largely a fallout of a poor regulatory environment which needed to be strengthened instead of the imposition of a blanket ban.

FIMI also maintains that private miners were allowed to enter beach sand mining in 2016 with the objective of increasing domestic supplies of rare earths and that this has assumed greater significance in view of China signalling restrictive trade of the metals amidst challenging global trading conditions.

“In India, instead of improving our regulatory regime, we blame only private industry, which in this case resulted in thousands of job losses and revenue to the government. Closing an industry is not the solution,” FIMI said in its representation to government.

Sources say that government is considering lifting the ban on beach sand mining along with the condition that either exports by private miners be restricted or that a blanket ban on overseas shipments be instituted.

Along with the imposition of a ban on beach sand mining, the government has already canalised the export of beach sand minerals exclusively through State-run REIL and the same could apply in this instance, with private miners not permitted to directly export beach sand minerals like garnet, leucoxene, sillinaite, illeminite, zircon and monazite.

Edited by Creamer Media Reporter

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