Promoting Critical Mineral Processing
A ₹2,814-Crore Push for Lithium and Nickel Domestic Processing
- The Union Cabinet approved the CAPEX Support Scheme to Promote Critical Mineral Processing on 4 November 2026.
- With an outlay of ₹2,814 crore, it will operate during FY 2026–27 to FY 2030–31.
- It provides a 30% capital subsidy to establish two Lithium and two Nickel processing plants, attracting ₹10,000 crore investment.
Building India's Critical Mineral Processing Capabilities
- Critical minerals are essential for clean energy, electronics, transport, telecommunications and defence.
- Global processing concentration exposes supply chains to geopolitical disruptions, price volatility and export restrictions.
- India has identified 24 critical minerals, including Lithium, Nickel, Cobalt, Graphite and Rare Earth Elements.
- India largely depends on imports for refined intermediates and high-purity materials. Net-zero emissions by 2070 further increase their importance.
Key Objectives of the Scheme
- Domestic Processing: Establish high-purity Lithium and Nickel processing facilities.
- Lithium: Process ores and concentrates (excluding brines) into battery-grade products.
- Nickel: Produce Class-1 Nickel or battery-grade Nickel Sulphate, with Cobalt recovery.
- Supply Chain Resilience: Address the missing processing link in India's critical mineral value chain.
Financial Outlay and Support
|
Particulars
|
Lithium
|
Nickel
|
|
Number of plants
|
2
|
2
|
|
Minimum capacity per plant
|
30 kt
|
50 kt
|
|
Maximum subsidy per beneficiary
|
₹500 crore
|
₹900 crore
|
|
Total subsidy allocation
|
₹1,000 crore
|
₹1,800 crore
|
- Total outlay: ₹2,814 crore, including ₹14 crore administrative expenses.
- Capital subsidy: 30% of eligible investment.
- Expected investment: Approximately ₹10,000 crore.
Selection and Disbursement Mechanism
Two-stage selection:
- Technical qualification of applicants.
- Financial bidding based on the least-cost criterion (lowest subsidy sought).
Milestone-linked subsidy:
|
Tranche
|
Project milestone
|
Cumulative subsidy
|
|
1
|
25% CAPEX spent; 15% equity contributed
|
25%
|
|
2
|
50% CAPEX spent; 50% equity contributed
|
50%
|
|
3
|
Plant commissioned; 100% equity contributed
|
100%
|
- Plants must be commissioned within three years of the Letter of Award, with an outer limit of five years.
Governance Framework
- Governing Council (GC): Strategic guidance, beneficiary selection and subsidy approval.
- Techno-Financial Committee (TFC): Technical and financial evaluation.
- Project Management Agency (PMA): Implementation and managerial support.
Significance and Expected Outcomes
- Strategic Autonomy: Reduces dependence on concentrated global processing networks.
- Investment: Attracts ₹10,000 crore and creates 60 kt Lithium and 100 kt Nickel processing capacity.
- Domestic Value Addition: Converts ores and concentrates into high-purity products domestically.
- Import Substitution: Reduces import bills and foreign exchange outflow.
- Manufacturing: Supports EV batteries, electronics, defence and speciality steel.
- Employment: Generates direct and indirect manufacturing opportunities.
Complementary Government Initiatives
- National Critical Mineral Mission (2025): Strengthens the entire critical mineral value chain.
- Critical Mineral Recycling Scheme: ₹1,500 crore support for recovering minerals from e-waste, spent batteries and scrap.
- Exploration and Mining: 64 critical and strategic mineral blocks and 11 Exploration Licence blocks auctioned.
Conclusion
The scheme fills a crucial gap in India's critical mineral value chain. Alongside exploration, mining and recycling, domestic processing can strengthen mineral security, support clean energy transition and advance Atmanirbhar Bharat.
Reference
PIB
