Govt Plans Rs 2,800-Crore Scheme to Boost Domestic Critical Mineral Processing in India: Report

New Delhi, Nov 4 (KNN) The Union Cabinet is likely to consider a proposed Rs 2,800-crore scheme to provide capital expenditure (capex) support for domestic processing of critical minerals, including lithium and nickel, according to a report.

The scheme aims to strengthen India's domestic processing capacity by converting lithium and nickel ores and intermediate products into high-purity compounds. Cobalt is also expected to be recovered as a by-product of nickel processing, sources familiar with the development told The Indian Express.

According to sources cited in the report, the scheme may offer a capital subsidy of 30 per cent of eligible investment for setting up four processing plants — two lithium plants with a minimum capacity of 30 kilotonnes (kt) each and two nickel plants with a minimum capacity of 50 kt each.

The maximum assistance is likely to be capped at Rs 500 crore per lithium beneficiary and Rs 900 crore per nickel beneficiary.

Support for Battery and Manufacturing Industries

Lithium, nickel and cobalt are key raw materials for lithium-ion batteries used in electric vehicles, smartphones and battery energy storage systems (BESS).

The proposed scheme is expected to support sectors such as electric mobility, battery storage, electronics, defence and speciality steel, while strengthening domestic critical mineral supply chains.

The government has already identified Andhra Pradesh, Odisha, Gujarat and Maharashtra for developing critical mineral processing parks. Gujarat and Andhra Pradesh are expected to focus on rare earth processing, while Odisha and Maharashtra have been identified for nickel and lithium processing, respectively.

The proposed focus on Odisha is linked to its nickel reserves and location, which could also facilitate processing of imported nickel from Indonesia and other resource-rich countries.

Reducing Import Dependence

India has limited domestic processing capacity for critical minerals and remains heavily dependent on imports of lithium, nickel, cobalt, rare earth elements and silicon. China accounts for around 90 per cent of global critical mineral processing, exposing India to potential supply disruptions.

The proposed scheme is part of the government's broader efforts to strengthen domestic processing capabilities and reduce dependence on overseas supply chains.

Separately, the government is working on a critical mineral stockpiling policy under the National Critical Minerals Mission (NCMM). The mission has proposed a National Critical Mineral Stockpile Programme, with an allocation of Rs 500 crore for 2024-25 to 2030-31 to develop strategic reserves.

The proposed processing scheme is yet to receive Cabinet approval, and its final structure and implementation details remain subject to government notification.

(KNN Bureau)