India’s IREL Courts Japan and South Korea to Build a Rare-Earth Magnet Supply Chain

IREL’s strategy tackles India’s most immediate bottleneck: the lack of commercial-scale refining and separation capacity for high-purity rare earth oxides. By sourcing process know-how from Japan and South Korea while seeding pilot-scale magnet output at home, the company is trying to bridge a capabilities gap without waiting for a greenfield ecosystem to mature. Beijing’s April suspension of a swath of rare earths and related magnets exposed just how vulnerable value chains had become, especially for neodymium-iron-boron units integral to EVs and wind turbines, and it accelerated diversification efforts across Asia.

Talks facilitated by Toyotsu Rare Earths India underscore the practical path IREL is exploring: enlist established Japanese magnet makers to process Indian neodymium oxide and, potentially, invest in an Indian manufacturing plant. Early proposals include shipping Indian oxide for conversion abroad, then returning finished magnets to support domestic demand while local capacity scales. IREL currently produces about 400–500 metric tons of neodymium per year and says output could rise depending on collaboration terms, providing the feedstock foundation for such arrangements.

The upstream track is advancing in parallel. New Delhi already asked IREL in June to suspend a 13-year export agreement with Japan to conserve supplies, and the miner is scouting additional ore sources in Argentina, Australia, Malawi and Myanmar to lock in long-run inputs. Meanwhile, trade flows around China’s controls are showing volatility - shipments of rare earth magnets whipsawed through the spring and then partially rebounded in June, strengthening the case for India to secure both technology partners and diversified raw materials.