Cabinet Clears Rs 1,500-Crore Incentive Scheme In Push For Rare Earth, Critical Minerals
The scheme will cover recycling of critical minerals like lithium, cobalt, and rare earth elements.
The Union Cabinet on Wednesday approved a Rs 1,500-crore incentive scheme for critical and rare earth minerals. The scheme is part of the National Critical Mineral Mission and is designed as a six-year package.
The scheme incentives are expected to help develop at least 270 kilo tonne of annual recycling capacity, resulting in around 40 kilo tonne of annual critical mineral production, according to an official release.
This will bring about Rs 8,000 crore of investment and create close to 70,000 direct and indirect jobs, it added.
The scheme is aimed at building the domestic capacity of and supply chain resilience in critical minerals. It will provide incentive for the recycling value chain which is involved in actual extraction of critical minerals, and not the value chain involved in only black mass production.
Recycling of critical minerals like lithium, cobalt, and rare earth elements will be covered under the release, the government said. The eligible feedstock comprises of e-waste, lithium-ion battery scrap, and scrap other than e-waste and LIB scrap e.g. catalytic convertors in end-of-life vehicles.
The scheme is expected to benefit both large, established recyclers, as well as small, new recycler. In addition, the government has earmarked one-third of the scheme outlay for the new recyclers.
The scheme will be applicable to investments in new units as well as expansion of capacity and diversification of existing units.
The incentives under the scheme will comprise 20% capex subsidy on plant and machinery, equipment and associated utilities for starting production within specified timeframe, beyond which reduced subsidy will be applicable.
The scheme also entails operational expenditure subsidy, which will be an incentive on incremental sales over the base year. This means companies will received 40% of eligible opex subsidy in the second year and balance 60% in the fifth year on achievement of specified threshold incremental sales, according to the release.
The total incentive per entity will be subject to an overall ceiling of Rs 50 crore for large entities and Rs 25 crore for small entities, within which there will be a ceiling for opex subsidy of Rs 10 crore and Rs 5 crore, respectively.
