Rs 7,280 crore plan approved for domestic manufacturing of Rare Earth Magnet
The Indian government has made its biggest move to challenge China’s global monopoly on rare earth elements. The Central Government has approved an ambitious scheme of Rs 7,280 crore to promote the manufacturing of ‘Rare Earth Permanent Magnet’ in the country. The government has also issued the notification of this scheme. This step is not only a milestone towards our self-reliance, but it is also a roadmap to secure our future energy needs.
Dependence on China will end, government’s big plan
According to the notification issued by the Ministry of Heavy Industries, the main objective of this scheme is to promote domestic production of Sintered Neodymium-Iron-Boron (NdFeB) Permanent Magnets. This is a special type of magnet which is considered to be the most powerful permanent magnet in the world. It is used in electric vehicles (EV), wind turbines, aerospace and many electronic devices. Till now, India was completely dependent on imports from China or other countries for these important components, but after this scheme, this supply chain will be ready in India itself. The government aims to set up a production capacity of 6,000 MTPA (million tonnes per annum).
Who will benefit?
To make this scheme completely transparent, the government has decided to invite applications through Global Tender Inquiry (GTE). Under this, five companies or applicants will be selected. According to the scheme, a minimum capacity of 600 MTPA and maximum of 1,200 MTPA will be allotted to a beneficiary. Selected companies will get help in two ways.
- Capital Subsidy: Financial assistance for setting up a manufacturing plant.
- Sales Linked Incentive: Incentive on sale of magnets.
The special thing is that the three selected beneficiaries with the lowest bid will also get assured supply of raw material i.e. NdPr Oxide from IREL (India) Limited. IREL is the only company working under the Department of Atomic Energy which does mining and refining of rare earths in the country.
India had treasure, yet why was there compulsion?
It is important to understand that in the coastal areas of India rare earth It is the world’s fifth largest reserve. We have the capability to mine and convert it into oxide, but the real problem was in its further processing. The ‘midstream capability’ to convert oxide to metal, metal to alloy and finally alloy to magnets did not exist on an industrial scale in India. We were dependent on China to fill this gap. Now this scheme of the government will work to connect this link, due to which we will not only become a country that extracts raw materials, but also makes finished products.
India is ready for the flight of self-reliance
The duration of this entire scheme has been fixed at 7 years. In this, the first 2 years will be for setting up the plant (gestation period) and for the next 5 years, incentives will be given on production and sales. The government has also put an interesting provision in it—if a company starts production and selling magnets before 2 years, then it will get the benefit of incentive for that additional time also. This provision will motivate companies to work faster.
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