The Union Cabinet has approved a five-year scheme worth Rs.2,814 crore to establish domestic processing facilities for critical minerals like Lithium, Nickel, and Cobalt. The goal is to reduce import dependence, develop resilient end-to-end value chains, and support Atmanirbhar Bharat objectives.
The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has given its approval to the 'Capex Support Scheme to Promote Critical Mineral Processing' with a financial allocation of Rs.2,814 crore over a span of five years.
The need for this scheme arises due to the geographically limited processing locations globally, exposing supply chains to geopolitical risks, price volatility, and potential supply restrictions. This situation poses severe threats to supply chain resilience, economic security, national security, and timely achievement of decarbonisation targets.
Currently, India heavily depends on imports for refined intermediates and high-purity materials due to the infant stage of domestic beneficiation and processing infrastructure for critical minerals. The limited domestic processing capacity presents challenges related to high capital requirements, limited availability of suitable technologies, and restricted access to raw materials.
The 'Capex Support Scheme' aims to establish domestic processing facilities in India, supporting value addition within the country, reducing import dependence, and developing value chains. The scheme targets Lithium and Nickel ore/intermediary product processing into high-purity compounds, with Cobalt expected as a by-product of nickel production.
The proposed scheme involves a total financial outlay of Rs.2,814 crore, covering the period from FY 2026-27 to 2030-31. The scheme provides capital subsidy of 30% of eligible investment for setting up four critical mineral processing plants, including two lithium processing plants (each with a minimum capacity of 30 kt) and two nickel processing plants (each with a minimum capacity of 50 kt).
The selection of beneficiaries shall be carried out through a two-stage process. In the first stage, applications shall be assessed for technical qualification, and only technically qualified applicants shall be eligible to participate in the second stage of financial bidding. For each mineral, two beneficiaries shall be selected based on the least-cost criterion, i.e., the lowest CAPEX support sought by the bidders under the Scheme. The incentives will be disbursed in three tranches linked to the achievement of specified milestones.
Source:
Press Information Bureau
