- Union Cabinet approved Rs 7,280 crore scheme to build domestic rare earth magnet supply chain
- The scheme aims to create 6,000 metric tonnes annual capacity across five units in seven years
- Rare Earth Permanent Magnets crucial for EVs, aerospace, defence, and electronics sectors
The Union Cabinet on Wednesday approved the Rare Earth Permanent Magnet manufacturing scheme with an outlay of Rs 7,280 crore to build a domestic supply chain and reduce import dependence on China.
The scheme will promote manufacturing of sintered magnets and create capacity for 6,000 metric tonnes per annum. Five units of 1,200 MTPA each will be set up.
The Rare Earth Permanent Magnet Scheme will have a duration of seven years, including two years for setting up units.
"Rare earths are a strategic material. Cars and electronics production was halted due to magnet shortage. The permanent magnets have applications in EVs, aerospace, defence, medical equipment," said Union Minister Ashwini Vaishnaw.
The REPMs are one of the strongest types of permanent magnets and are vital for electric vehicles, renewable energy, electronics, aerospace, and defence applications.
The Scheme will support the creation of integrated REPM manufacturing facilities, involving conversion of rare earth oxides to metals, metals to alloys, and alloys to finished REPMs, a Cabinet note said.
The total financial outlay will comprise a sales-linked incentives of Rs 6,450 crore on REPM sales for five years and capital subsidy of Rs 750 crore for setting up manufacturing facilities.
China dominates the global rare earth magnet supply chain and has used its control as tool of geopolitical policy through an arduous licensing regime.
Vaishnaw said Odisha, Andhra Pradesh, Karnataka, Goa, and Gujarat coastlines have rare earth deposits, so does hilly areas of Gujarat and Maharashtra.
The permanent magnets will be made via a combination of light and heavy rare earths. These mineral are difficult to mine, process and refine.
"Rare earths have geopolitical and strategic importance, even in trade deals. The National Critical Minerals Mission was also recently approved to source materials from around the world," the minister said.
He also said India will collaborate with Australia and Japan through the REPM programme. Australia holds large untapped reserves of rare earths, while the Japanese have been developing key technologies.
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