Govt notifies Rs 7,280-cr scheme to manufacture rare earth magnets in India

New Delhi, Dec 16 (PTI) The Centre has notified the Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnet (REPM) with an outlay of Rs 7,280 crore.

The initiative is targeting to reduce dependence on China for critical inputs and secure supply chains for EVs, electronics, aerospace and green energy.

The scheme, approved earlier by the Union Cabinet, aims to build a complete domestic value chain of converting rare earth oxide into sintered NdFeB, essential for India's strategic and industrial advancement.

Neodymium-Iron-Boron (NdFeB) is the alloy used to create the strongest type of permanent magnets.

"Through this scheme, the Government of India intends to incentivise setting up of 6,000 MTPA (Million Tonnes Per Annum) of integrated REO (rare earth oxides) to sintered NdFeB REPM's manufacturing facilities in the country," the Heavy Industries Ministry said in the notification.

Indigenously produced sintered NdFeB REPMs from NdPr oxide will be eligible for sales-linked incentives and capital subsidy under the scheme.

It will allocate up to 6,000 MTPA of integrated sintered NdFeB magnet manufacturing capacity to five applicants through a transparent bidding process -- Global Tender Enquiry (GTE) by issuing a Request for Proposal (RFP).

The minimum allocation to a beneficiary will be 600 MTPA, going up to a maximum allocation of 1,200 MTPA, in multiples of 100 MTPA, as per the notification.

The beneficiaries will receive sales-linked incentives on the sale of sintered NdFeB REPM and a capital subsidy for setting up the allocated manufacturing capacity.

Further, three selected beneficiaries with the lowest bids would receive an assured limited supply of NdPr oxide from IREL (India) Ltd, a CPSE under the Department of Atomic Energy (DAE).

The total duration of the scheme will be 7 years, which includes 2 years of gestation period for setting up the manufacturing facilities and 5 years for incentive disbursement on the sale of sintered NdFeB REPM.

Further, in case the first sale of sintered NdFeB REPM commences prior to the completion of the gestation period, then this additional period will also be eligible for sales-linked incentive over and above the 5-year duration.

India has one of the world's largest rare earth reserves, mostly located in coastal regions.

IREL (India), a CPSE under the Department of Atomic Energy (DAE), is the only company in India that is engaged in the mining of rare earth ores and refining these into REOs.

While India possesses upstream capabilities in mining, separation and oxide refining, there is a notable gap in the industrial-scale midstream capabilities needed for oxide-to-metal, metal-to-alloy and alloy-to-magnet conversion.

Due to this, India currently imports all its sintered NdFeB REPM demand for downstream applications. PTI RSN BAL BAL