India's Scheme for Rare Earth Minerals and Magnets

India is finalizing a significant scheme worth ₹3,500-5,000 crore to boost the production of rare earth minerals and derived magnets within the country. This initiative is poised for approval within a fortnight.

Objective and Incentive Mechanism

• The primary objective is to initiate domestic production of critical minerals swiftly.
• Incentives will be offered through a reverse auction process.

Need for Diversification

• An internal ministerial review highlighted the need to diversify due to heavy reliance on Chinese imports.
• At least five major domestic companies have shown interest in producing these minerals after consulting with the government.

China's Dominance and Export Curbs

• China holds a near monopoly on the global supply of rare earth magnets and has imposed export restrictions.
• Chinese export curbs have significantly impacted industries, particularly the automobile sector, prompting calls for government action.

Demand and Future Prospects

• Electric vehicles (EVs) and wind turbine manufacturers are the largest consumers of rare earth elements in India, comprising over half of the 4010 metric tonne domestic demand projected for 2025.
• Overall demand is anticipated to more than double, reaching 8220 metric tonnes by 2030.

Regulatory and Production Developments

• The government plans to amend the Mines and Minerals (Development and Regulation) Act to support this critical mineral mission.
• The Ministry of Science and Technology has allocated funding for Midwest Advanced Materials Private Ltd in Hyderabad, expecting some domestic production of rare earth permanent magnets later this year.