Capex Support Scheme to Promote Critical Mineral Processing

Why in News?

The Union Cabinet has approved the Capex Support Scheme to Promote Critical Mineral Processing, with a financial outlay of ₹2,814 crore over five years (FY 2026–27 to 2030–31).

Background

• Global processing of critical minerals is concentrated in a few geographical locations.
• This creates vulnerabilities due to geopolitical disruptions, price volatility and possible restrictions on supplies.
• India remains substantially dependent on imports of refined intermediates and high-purity materials.
• Domestic beneficiation and processing infrastructure for minerals such as lithium, nickel and cobalt is still at a nascent stage.
• Commercial-scale projects face challenges such as high capital costs, limited access to suitable technologies and inadequate availability of raw materials.

Key Features of the Scheme

• Financial outlay: ₹2,814 crore over five years.
• Capital subsidy: 30% of eligible investment.
• Target: Establishment of four critical mineral processing plants:
  • Two lithium processing plants, each with a minimum capacity of 30 kilotonnes (kt).
  • Two nickel processing plants, each with a minimum capacity of 50 kt.
• Mineral processing: Lithium and nickel ores/intermediate products will be processed into high-purity compounds.
• By-product recovery: Cobalt is also expected to be recovered as a by-product of nickel production.

Objectives

1. Develop domestic critical mineral processing capabilities.
2. Promote value addition within India and strengthen the domestic mineral value chain.
3. Reduce dependence on imports of refined intermediates and high-purity materials.
4. Improve supply-chain resilience against geopolitical and market disruptions.
5. Support national security, economic sovereignty and India’s decarbonisation targets.

Source: PIB

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