The Union Cabinet is expected to review a proposed ₹2,800 crore scheme aimed at bolstering India's domestic capabilities in processing critical minerals. This significant investment seeks to provide capital expenditure (capex) support for setting up facilities crucial for the country's burgeoning electric vehicle (EV) and electronics industries.
Focus on Lithium and Nickel Processing
The core of the proposed scheme is to develop India's capacity to process lithium and nickel ores, along with intermediary products, into high-purity compounds. Cobalt is also anticipated to be recovered as a valuable by-product during the nickel processing stages, according to sources familiar with the matter.
Under the envisaged framework, the government plans to offer a substantial capital subsidy of 30% on eligible investments. This support will be allocated for establishing four dedicated processing plants:
- Two lithium processing facilities, each with a minimum capacity of 30 kilotonnes (kt).
- Two nickel processing facilities, each with a minimum capacity of 50 kilotonnes (kt).
Maximum capital support is projected to be capped at ₹500 crore per beneficiary for lithium processing plants and ₹900 crore per beneficiary for nickel processing plants.
Strategic Locations for Mineral Parks
Sources indicate that four key states have been identified as potential locations for these critical mineral processing parks: Andhra Pradesh, Odisha, Gujarat, and Maharashtra. These strategic locations aim to create regional hubs for mineral refinement.
Why Critical Mineral Processing Matters for India
Lithium, nickel, and cobalt are indispensable raw materials for lithium-ion batteries, which power a vast array of modern applications, including electric vehicles, smartphones, and various other electronic devices. India's aggressive push to establish domestic processing capacity is a direct response to the escalating demand for these critical minerals, driven by the global transition towards electric mobility, renewable energy sources, and advanced manufacturing sectors.
While securing access to mineral resources is a vital component of India's broader critical minerals strategy, cultivating indigenous capabilities to transform raw ores into high-purity materials is equally crucial. This domestic processing capacity is essential for significantly reducing India's reliance on imports and, consequently, strengthening the country's vital battery and electric vehicle supply chains, fostering greater economic resilience and self-sufficiency.