Material Insights · Understanding the Material World

Rare earths and Thorium

Monazite, the mineral of India's beach sands, holds both rare earths and thorium, so every tonne of rare earths won from it brings radioactive thorium that must be separated and stored; thorium supply is set by rare-earth demand, and thorium handling in turn limits how fast monazite can be processed.

Rare earths (commodity) and Thorium (commodity): 5 relationships.

How they are linked

1. Both locked in monazite

Joint production · Strong · Monazite → rare earths and thorium

Monazite is a phosphate mineral of rare earths and thorium and is the world's main source of thorium, so mining it for rare earths always brings thorium too.

  • about 8 to 10% thorium content of Kerala and Odisha beach-sand monazite
  • 12.73 Mt India's monazite resources, March 2021

India's monazite sits in beach and inland placers in Andhra Pradesh (3.78 Mt), Odisha (3.16 Mt), Tamil Nadu (2.47 Mt) and Kerala (1.84 Mt). The tie is specific to monazite-based supply.

Sources: USGS; Indian Bureau of Mines; Bhabha Atomic Research Centre

2. Thorium only comes with rare earths

Joint production · Asymmetric · Rare-earth processing → thorium

Monazite is mined for its rare earths; USGS judges it would likely not be recovered for thorium alone, so rare-earth demand sets thorium supply while thorium demand barely affects rare-earth output.

  • 850,000 t India's thorium resources, the world's largest

Thorium's own markets are small because its natural radioactivity has limited its use in most products, and non-radioactive substitutes exist for many applications. Large thorium resources therefore do not translate into thorium output unless rare earths are being extracted.

Sources: USGS

3. Thorium residue constrains monazite processing

Shared risk · Medium · Thorium handling limits rare-earth output from monazite

Thorium separated during monazite cracking is radioactive and must be stored or refined under nuclear controls, which adds cost and regulation to every tonne of rare earths from this route.

IREL chemically treats monazite from Manavalakurichi to separate the rare earths as a composite chloride and the thorium as a hydroxide upgrade, and has built a large stockpile of impure thorium hydroxide; part of it is refined into nuclear-grade thorium oxide for BARC and the Nuclear Fuel Complex. Unless thorium finds wider use, the stockpile grows with rare-earth output.

Sources: USGS; Indian Bureau of Mines

4. Atomic energy law governs both in India

Policy · High in India · Monazite is a prescribed substance, so rare earths sit under nuclear rules

Because monazite carries thorium, India treats it as a prescribed substance under the Atomic Energy Act 1962, and the state company IREL is the only entity processing it into rare-earth compounds.

  • 2,900 t India's rare-earth mine output, 2025 estimate
  • 270,000 t China's rare-earth mine output, 2025 estimate
  • about 1.07 Mt thorium in India's monazite, government estimate, 2014

The same rule that protects thorium for India's three-stage nuclear programme, which plans to use thorium in its third stage, also keeps rare-earth production in a single public company. That has kept Indian output small next to China's, even though India's monazite resources are large.

Sources: USGS; Indian Bureau of Mines; Bhabha Atomic Research Centre; Business Standard (PIB release)

5. Rare-earth demand pulls thorium out of the ground

Transition · Rising · Rare-earth demand → more thorium arising

Efforts to build rare-earth supply outside China, sharpened by Chinese export controls, raise interest in monazite sands and so in the thorium that comes with them.

  • 390,000 t world rare-earth mine output, 2025 estimate

China tightened export controls on several rare earths in April 2025, widened them in October and suspended the October additions for a year in November. Each push for non-Chinese supply from monazite also adds to thorium stockpiles unless a thorium use, such as reactor fuel, develops.

Sources: USGS

For investors

Key learnings

  1. Monazite-based rare-earth projects carry a thorium liability, so storage and licensing costs belong in any valuation.
  2. Thorium supply is a by-product of rare earths and will grow only as fast as monazite processing does, whatever happens to thorium reactor plans.
  3. In India, rare-earth output from monazite is tied to a single state company and to nuclear regulation, which limits private entry.

What to track

  • China rare-earth export control measures: Tighter controls raise the value of non-Chinese monazite supply (As announced · China Ministry of Commerce)
  • IREL rare-earth oxide output and capacity additions: Sets India's rare-earth supply and its thorium arising (Yearly · IREL annual report)

For policymakers

Key learnings

  1. India holds the world's largest thorium resources, but in practice they become available only when monazite is processed for rare earths.
  2. Treating monazite as a prescribed substance protects nuclear material but keeps rare-earth production narrow; any opening needs a clear plan for thorium residues.
  3. A working use for thorium, such as fuel in the third stage of the nuclear programme, would turn a storage burden into a resource.

What to track

  • Thorium hydroxide and oxide stocks held by IREL: Shows whether residue storage is keeping pace with rare-earth output (Yearly · Department of Atomic Energy)
  • Monazite processed per year in India: Drives both rare-earth output and thorium arising (Yearly · Indian Bureau of Mines yearbook)
  • Progress of thorium-based reactor projects: Determines whether thorium gains a use (Yearly · Department of Atomic Energy)

India

India has the world's largest thorium resources (about 850,000 t on the USGS estimate), held in beach-sand monazite put at 12.73 Mt in 2021; monazite is a prescribed substance under the Atomic Energy Act, IREL alone processes it, and India mined only about 2,900 t of rare earths in 2025.

Sources

  1. Mineral Commodity Summaries 2026: Thorium, USGS (2026)
  2. Mineral Commodity Summaries 2026: Rare earths, USGS (2026)
  3. Indian Minerals Yearbook 2022: Rare earths, Indian Bureau of Mines (2024)
  4. Thorium fuel cycle, Bhabha Atomic Research Centre (2025)
  5. Thorium reserves in country (government press release), Business Standard (PIB release) (2014)