Union Cabinet, chaired by the Prime Minister of India, has approved a ₹1,500 crore incentive scheme aimed at developing domestic recycling capacity for critical minerals from secondary sources. This initiative is part of India’s efforts to strengthen its supply chain resilience and support the National Critical Mineral Mission (NCMM), crucial for clean energy transition.
Key Features of the Scheme
Objective:
- Increase domestic recycling of critical minerals.
- Reduce import dependence.
- Support clean energy technologies (EVs, solar, wind, batteries).
- Promote technology development for processing and recycling.
- Acquire overseas mineral assets and ensure long-term supply security.
Critical Minerals Covered:
- Copper, Lithium, Nickel, Cobalt, Rare Earth Elements (REEs).
Scheme Tenure:
- 6 years – From FY 2025-26 to FY 2030-31.
Eligible Feedstock:
- E-waste.
- Lithium-ion battery (LIB) scrap.
- Other industrial scraps (excluding black mass-only production).
Scope of Application:
- New recycling units.
- Expansion, modernization, or diversification of existing units.
Incentive Structure
- Capex Subsidy:
- 20% subsidy on plant, machinery, equipment, and utilities if production starts within a specified timeframe.
- Reduced subsidy if delayed.
- Opex Subsidy (on incremental sales beyond base year):
- 40% of eligible Opex subsidy in the 2nd year.
- Remaining 60% in the 5th year.
- Applicable from FY 2026-27 to FY 2030-31, subject to achieving specified sales thresholds.
Expected Outcomes
- Recycling Capacity: At least 270 kilo tons annually.
- Critical Mineral Output: Around 40 kilo tons annually.
- Investments: Estimated ₹8,000 crore.
- Employment: About 70,000 direct & indirect jobs.
- Strategic Impact: Supports Atmanirbhar Bharat in critical minerals, reduces reliance on imports, especially from China.
Background & Linkages
- The scheme is a part of the National Critical Mineral Mission (NCMM).
- NCMM Funding:
- Government approved ₹16,300 crore for NCMM.
- Total outlay: ₹34,300 crore (2024–2031).
- Public Sector Enterprises contribution: ₹18,000 crore.
- Aim: Build domestic capacity, secure overseas mineral assets, and enable India’s green energy transition.
- Significance: The critical mineral value chain (exploration, mining, processing) has a long gestation period, making recycling a faster, interim solution.
Key Facts
- Critical Minerals: Essential raw materials for EVs, semiconductors, renewable energy, and defence.
- Global Context:
- China dominates global processing of critical minerals (especially rare earths, lithium-ion recycling).
- India currently imports over 70–80% of its critical mineral requirements.
- Institutions Involved:
- Ministry of Mines – nodal ministry for NCMM.
- GSI (Geological Survey of India) & MECL – exploration roles.
- KABIL (Khanij Bidesh India Ltd) – JV of NALCO, HCL, MECL for overseas mineral asset acquisitions.