India’s growing interest in Namibia’s rare earth resources is no coincidence.
It could be directly tied to the Indian government’s newly proposed incentive program worth up to 25 billion rupees (about N$65 billion), aimed at building a domestic industry for rare earth magnets.
These magnets are essential for electric vehicles and wind turbines, and India plans to encourage local production by subsidising companies that commit to sourcing and manufacturing domestically.
Major Indian industrial groups like Vedanta Group and JSW Group have already shown interest in the program, which will include requirements for domestic content starting at 50% and rising to 80% over time.
The plan is ambitious, supporting three to four major producers to collectively manufacture around 4,000 tonnes of magnets over seven years, with a two-year setup period and five years of production incentives.
The urgency stems from India’s dependence on China, which dominates the global rare earth processing market. Chinese export controls have raised fears of supply disruptions, pushing India to secure alternative sources and develop its processing capacity.
Namibia’s untapped rare earth promise
While Namibia is best known for its uranium, diamonds and copper, it also holds significant potential in rare earth elements.
The most advanced of these is the Lofdal project in the Kunene Region, operated by Namibia Critical Metals.
Lofdal stands out for its high concentrations of heavy rare earth elements such as dysprosium and terbium—metals critical for making high-strength permanent magnets that can operate at high temperatures, essential in electric motors and wind turbines.
This project has already drawn foreign investment, notably from Japan’s government-backed JOGMEC, which has taken a 40% stake and plans to go up to 50% through staged funding.
Japan’s involvement reflects a wider global strategy to diversify rare earth supply chains away from China.
Beyond Lofdal, Namibia’s rare earth potential remains largely unexplored.
Geological surveys point to other promising areas, including carbonatite and alkaline complexes that could host both light and heavy rare earth minerals. But unlocking this potential will require significant investment and sustained exploration work.
Modi’s visit to Windhoek and diplomatic signals
Prime Minister Narendra Modi’s visit to Namibia this week placed these possibilities firmly on the table. While no formal mining deals were announced, Namibian and Indian officials confirmed that critical minerals were a key topic.
Namibia’s Ministry of Mines and Energy noted that the discussions centred on how Namibia’s mining sector can support the global energy transition, and how partnerships could help deliver more local value addition.
Diplomatic sources suggest India is interested in negotiating long-term agreements to secure rare earth concentrates or processed oxides for its planned domestic magnet production.
Such deals could resemble Japan’s support for Lofdal, combining investment with offtake agreements and possibly technology transfer.
Speaking days before his visit, at the BRICS summit in Rio de Janeiro on July 6–7, 2025, Modi underscored the geopolitical stakes, warning, “It’s important to ensure that no country uses these resources for its own selfish gain or as a weapon against others.”
India’s domestic manufacturing strategy
India’s planned incentive scheme is part of a broader strategy to build a secure, competitive supply chain for neodymium and praseodymium-based magnets.
These magnets are vital for electric vehicles and renewable energy technologies, sectors central to India’s clean energy transition.
A Vedanta Group spokesperson has said the company’s interest in rare earth magnets stems from their strategic role in green technologies and growing importance in global trade.
The Indian government’s scheme is designed to reduce dependence on Chinese suppliers, recognising that without subsidies, local production would struggle to compete on cost.
Why Namibia is well-positioned
Namibia’s political stability, mining experience, and known rare earth deposits make it a strong candidate for partnerships.
The country currently has no commercial rare earth production, but the Lofdal project demonstrates real potential.
Heavy rare earth elements like dysprosium and terbium are particularly scarce and command high prices. Namibia’s government has also signalled that it wants to develop these resources in a way that delivers local value addition, creates jobs, and builds technical expertise.
Challenges for both countries
Unlocking Namibia’s rare earth potential won’t be easy. Mining and processing rare earths is technically complex and capital-intensive, and there are significant environmental considerations.
Deposits often contain radioactive elements that require careful waste management.
India, meanwhile, has limited domestic rare earth resources and faces the challenge of building a whole supply chain—from mine to magnet production—essentially from scratch.
The planned incentive program recognises these hurdles, aiming to build local capacity through subsidies and strategic partnerships with supplier countries like Namibia.
A new phase of resource diplomacy
Modi’s visit marks a new phase in India-Namibia relations, signalling that mining partnerships, especially in critical minerals, are climbing higher on the diplomatic agenda.
For Namibia, attracting investment beyond its traditional partners supports its goal of diversifying both its mining sector and its economy more broadly.
For India, securing ethical, stable supplies of critical minerals is now central to its ambitions for clean energy and industrial self-reliance.
As minerals like neodymium, praseodymium, dysprosium and terbium gain recognition as strategic assets, Namibia’s potential role in supplying them is becoming increasingly important—not just for its development, but as part of a broader global push to build more secure and diversified supply chains.
