KOLKATA (miningweekly.com) - The Indian government has nudged government-owned traditional mineral extraction and processing companies to diversify into the production of rare earths either from industrial smelting or through the exploration of new properties within the country and overseas.

Mining and mineral processing majors such as the country’s largest aluminium producer National Aluminium Company Limited (Nalco), Hindustan Copper Limited (HCL) - the sole domestic integrated copper producer - and Steel Authority of India Limited (SAIL) have been directed to scout for production opportunities for rare earths. The hunt would be backed by more sophisticated extraction technologies provided by the government’s network of national laboratories.

The decision to involve traditional miners in augmenting rare-earth exploration and production was taken at a high-level multidisciplinary meeting in New Delhi last week, which laid out a multipronged road map for stepping up focus on strategic mineral development.

The meeting was attended by representatives from the Indian Space Research Organisation, the Council for Scientific and Industrial Research, the Defence Research and Development Organisation, the Geological Survey of India (GSI) and the Atomic Minerals Directorate (AMD).

It was decided that GSI and AMD would step up exploration for rare earth assets within the country in the central Indian desert province of Rajasthan and the Purulia region in West Bengal in the east of the country.

Simultaneously, government-owned mining and mineral companies would be empowered and mandated to produce rare earths from smelting processes, as well as make rare earth a focus of their existing overseas asset acquisition strategy in countries like Afghanistan, Ukraine and Mozambique, leveraging India’s strong diplomatic relations with these countries.

It was noted at the meeting that several of these mining companies were already extending their footprint in these countries, but that a more strategic collaboration would be needed to extend their traditional mining and processing business portfolio to include overseas rare-earth resources.

HCL and Nalco were, for examply, jointly attempting to enter gold and copper exploration and production in Afghanistan and such bids could be expanded to tap into rare earth assets in the country. Similarly, SAIL, in collaboration with iron-ore miner Kudremukh Iron Ore Company Limited, was planning to invest in rare-earth exploration and production in the southern Indian province of Kerala, which has considerable monazite resources along its coastline.

According to government officials, a concerted effort to push government miners into rare-earth assets could also facilitate a more effective India-Japan collaboration under existing strategic agreements between the two countries, with the officials citing the example of the joint venture between Toyota Tsusho Corporation and Indian Rare Earths Limited.