CHENNAI: Tamil Nadu has come into sharp focus in India’s strategic minerals roadmap following the Union government’s decision to establish Rare Earth Corridors under the Union Budget 2026-27, a move aimed at strengthening domestic supply chains for critical minerals required in electric mobility, renewable energy, and advanced manufacturing.
The proposed corridor, linked to the Rare Earth Permanent Magnet (REPM) manufacturing scheme approved in November 2025, aims to reduce India’s dependence on imports by creating an integrated ecosystem that spans mineral extraction, processing, research, and downstream manufacturing. For Tamil Nadu, the initiative presents a dual narrative of economic promise and environmental caution.
According to the REPM scheme, the corridor will focus on minerals such as monazite, bastnaesite, xenotime, ilmenite and zircon, which contain rare earth elements, including neodymium, praseodymium, dysprosium and terbium. These elements are indispensable for the manufacture of permanent magnets used in electric vehicle motors, wind turbines, defence equipment, sensors and actuators.
In Tamil Nadu, these minerals are predominantly located in monazite-bearing beach sands along coastal districts Tirunelveli, Thoothukudi, Kanniyakumari and Ramanathapuram, with additional identified occurrences in parts of the Western Ghats belt.
Officials said the Rare Earth Corridor is not conceived as a standalone mining initiative but as an integrated economic framework. It will connect mineral-bearing regions with processing units, testing and research facilities and REPM manufacturing clusters, supported by dedicated logistics and infrastructure. Private firms are expected to be selected through competitive bidding under the central scheme, while States will continue to play a role in regulatory clearances and monitoring.
“The emphasis is on domestic value addition, moving beyond raw mineral extraction to advanced manufacturing within the country,” a senior Union government official familiar with the framework told DT Next.
Economists view the initiative as part of a global shift, as countries seek to diversify supply chains away from China, which currently dominates rare earth magnet production.
Prof KR Shanmugam, Madras School of Economics, said the corridor must be assessed in the context of changing global trade dynamics. He noted that China’s dominance in rare earth magnets had pushed several countries, including India, to develop domestic capacities. In Tamil Nadu, he said, minerals critical for EVs, defence applications and renewable energy systems had been identified in both coastal regions and the Western Ghats.
At the same time, technology experts underline that rare earth extraction is among the most ecologically sensitive forms of mining, particularly when monazite is involved due to its radioactive content.
“Rare earth mining is chemically intensive and produces waste that can remain hazardous for decades if not managed scientifically,” said a research fellow from IIT Madras, noting that coastal ecosystems and interconnected groundwater systems are especially vulnerable.
These concerns are echoed in academic literature.
Green groups have cautioned that TN’s coastline is already under ecological stress, and rigorous environmental assessment must be taken up before any mineral extraction expansion
A peer-reviewed study published in the Journal of Cleaner Production has linked rare earth mining worldwide to groundwater contamination, soil degradation and radiation exposure in cases where tailings management and long-term monitoring were inadequate. The study highlights that coastal and densely populated regions require significantly stricter safeguards than inland mining zones.
G Sundarrajan, environmentalist and climate activist, said the proposal warranted scrutiny, as largescale mineral extraction could further strain fragile coastal systems and threaten livelihoods dependent on them, particularly fishing communities. He stressed the need for robust safeguards and transparent oversight to prevent irreversible damage.
State officials said Tamil Nadu would examine the economic potential of the corridor alongside environmental considerations, with an emphasis on strict environmental impact assessments, radiation safety protocols, groundwater protection and long-term monitoring before permitting any project.