A new project worth ₹1,000 crore will be launched by the government to encourage the domestic manufacture of rare earth magnets, which are essential parts for industries like electronics, electric vehicles and defense, reported CNBC-TV18. The plan’s main objective is to boost India’s ability to produce about 1,500 tons of rare earth magnets.
A significant contribution will be made by India Rare Earth Limited (IREL), which will provide original equipment manufacturers (OEMs) involved in the production of magnets with about 500 tonnes of rare earth raw materials. According to the sources, five to six businesses are currently interested in breaking into the rare earth magnet manufacturing market.
The government is aware of worries that some companies would prefer importing fully finished components rather than procuring magnets domestically, even though it views the situation around rare earth magnets as stable at the moment. Officials are contemplating about changing the Production Linked Incentive (PLI) scheme’s Domestic Value Addition (DVA) requirements if needed to promote localized manufacturing in order to address this.
Although less than 20% of India’s geological potential has been explored, the country is home to the third-largest rare earth reserves in the world.
What do the experts say
Experts in the field believe the time is right to accelerate exploration and develop indigenous capabilities. While monazite, a crucial source of neodymium for rare earth magnets, is abundant in India, Arun Misra, CEO of Hindustan Zinc and Executive Director at Vedanta, stated that there are substantial technological and legal barriers.
He conveyed, “The first step is to remove monazite from the atomic minerals list and open it up for private mining investment.” Since China and Japan presently possess the technology to extract neodymium from rare earth chlorides, he maintained, the nation needs to make significant investments in R&D and smelting technology.
He asserted that while beach sand is processed by Indian Rare Earths Ltd. to produce rare earth oxides, the value-added chain ends there. “Just mining monazite and making chlorides is not a solution. We need to develop ways to produce neodymium so we can manufacture permanent magnets,” he added.
What is the centre’s plan
Union Minister HD Kumaraswamy stated on 24th June that the government will decide within 15 to 20 days whether to implement a plan to subsidize domestic manufacture of rare earth magnets. Consultations with stakeholders are being held to decide how much of a subsidy will be provided under the plan.
Heavy Industries Ministry Secretary Kamran Rizvi highlighted that the plan will be submitted to the union cabinet for approval if the overall incentives exceed ₹1,000 crore. The Minister for Heavy Industries and Steel, Kumaraswamy, informed, “One Hyderabad-based company is showing interest. They have promised that they will deliver 500 tonnes by this year-end, December. We have (had) discussions with the Mines Minister. Our Secretary and our ministry are working on, ultimately, a decision (will be taken) I think within 15-20 days.”
Many nations, notably India, experienced significant disruptions in the production of semiconductor chips and automobiles as a result of China’s recent curbs on exports of essential metals. The secretary pointed out that the government and business are considering other procurement options, such as Japan and Vietnam, in the interim, as the actual production of rare earth magnets is expected to take around two years.
Neodymium-iron-boron (NdFeB) magnets are examples of rare earth magnets. It is utilized in high-performance automotive applications such power steering motors in passenger cars and electric vehicles with internal combustion engines, as well as traction motors in two-wheelers and electric vehicles.
How will the new scheme help
The incentive will make it easier for corporations to invest in building processing facilities so they can turn rare earth oxides into magnets. The only rare earth repository in India is Indian Rare Earth Magnets Ltd, a PSU under the Ministry of Atomic Energy. The officials mentioned that they possess sufficient rare earths to produce 1,500 tons of magnets.
According to Kamran Rizvi, secretary in the ministry of heavy industries, the amount of incentives to be provided would determine whether or not the plan will move to the union cabinet.
“It depends on the level of incentives. If it is less than ₹1,000 crore, (heavy industries) minister and finance minister can do it. If it goes beyond ₹1,000 crore, it has to go to the cabinet. We do not know the quantum of subsidy required yet, stakeholder consultations are on, as the minister pointed out, so varied responses have come. Somebody wants 50 per cent, somebody wants 20 per cent, so it will be subject to a competitive bid, then we will know the quantum of support required,” he outlined.
The officials emphasised that 30 automakers requested permission from the Directorate General of Foreign Trade (DGFT) two weeks ago to import rare earth magnets from China in order to avoid production being adversely affected by the scarcity.
