Government to launch Rs 7,350-crore scheme to boost rare earth magnet production
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India is in the final stages of introducing a Rs 7,350-crore plan to strengthen the production of sintered rare earth magnets.
The move follows recent supply concerns after China imposed restrictions on rare earth mineral exports earlier this year.
The scheme will likely be called the Scheme to Promote Sintered Rare Earth Permanent Magnet Manufacturing in India. It aims to establish an indigenous ecosystem capable of producing up to 6,000 tonnes of sintered rare earth magnets annually. Sintering is a process in which powdered materials are compacted and heated to form solid magnets.
The scheme is expected to run for seven years. It will provide incentives to facilities that can handle the final three stages of magnet production—converting rare earth oxides into metals, then into alloys, and finally shaping those alloys into magnets. Currently, India lacks the infrastructure to carry out these crucial steps.
Rare earth magnet production involves multiple processes, including mining, beneficiation, processing, extraction, refining to oxides, metal and alloy conversion, and magnet manufacturing. The new plan aims to create a complete domestic value chain. It will focus on converting neodymium-praseodymium oxides - types of rare-earth materials - into neodymium-iron-boron magnets. These magnets are vital for sectors like automobiles, electronics, wind energy, and defence.
Under the proposed scheme, the government will support the creation of five integrated rare earth permanent magnet manufacturing units, each with a capacity of up to 1,200 tonnes per year. Applicants can bid for capacities ranging from 600 to 1,200 tonnes annually, in increments of 100 tonnes.
Selected companies will receive two types of financial support: a sales-based incentive for sintered neodymium-iron-boron magnet output and a capital subsidy to help establish integrated manufacturing facilities in India.
At present, India imports almost all the rare-earth permanent magnets it uses. Government estimates suggest the country currently requires about 4,010 tonnes of these magnets annually, with demand projected to rise to 8,220 tonnes per year by 2030.