Cabinet Approves Rs 2,814-Crore Scheme For Critical Mineral Processing

The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved a capex support scheme to promote critical mineral processing with a financial outlay of Rs 2,814 crore over a period of five years.

The 'Capex Support Scheme to Promote Critical Mineral Processing' aims to develop domestic processing capabilities in India to support value addition within the country, reduce import dependence, and develop the value chain.

The scheme period is from FY 2026-27 to 2030-31. Under the scheme, capital subsidy of 30 per cent of eligible investment will be provided for setting up four critical mineral processing plants, comprising two lithium processing plants (with a minimum capacity of 30 kt each) and two nickel processing plants (with a minimum capacity of 50 kt each).

The maximum capital support will be capped at Rs 500 crore per lithium beneficiary and Rs 900 crore per nickel beneficiary, respectively, according to an official statement.

The statement further said that the selection of beneficiaries would be carried out through a two-stage process.

In the first stage, applications shall be assessed for technical qualification, and only technically qualified applicants shall be eligible to participate in the second stage of financial bidding.

For each mineral, two beneficiaries shall be selected based on the least-cost criterion -- the lowest CAPEX support sought by the bidders under the scheme.

The incentives will be disbursed in three tranches linked to the achievement of specified milestones, said the Cabinet.

At present, India remains substantially dependent on imports for refined intermediates and high-purity materials, owing to the nascent stage of domestic beneficiation and processing infrastructure for critical minerals, including lithium, nickel, and cobalt.

Domestic processing capacity for critical minerals remains limited, with commercial-scale projects facing challenges relating to high capital requirements, limited availability of suitable technologies, and constrained access to raw materials. Domestic processing capacity is therefore imperative for maximising value addition, achieving import substitution, and establishing resilient end-to-end value chains.

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