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The Union Cabinet approved the Capex Support Scheme to Promote Critical Mineral Processing with a total outlay of Rs 2,814 crore over five years, Union Minister Ashwini Vaishnaw said during a Cabinet briefing.
The initiative provides capital expenditure assistance to establish and operationalise domestic processing facilities, targeting the conversion of lithium and nickel ores or intermediary products into high-purity compounds. Cobalt recovery is also slated as a by-product of nickel production. The financial outlay covers the period from fiscal year 2026-27 to 2030-31 to build processing infrastructure for sectors including electric mobility, battery energy storage systems, defence, electronics, and speciality steel. As per the Cabinet, "Processing of critical minerals remains geographically concentrated in a few global locations. This exposes supply chains to geopolitical disruptions, price volatility, and potential supply restrictions, posing severe threats to supply chain resilience and economic security. This has implications for national security, economic sovereignty, and the timely achievement of decarbonisation targets." India currently depends on overseas shipments for refined intermediates and high-purity materials because domestic beneficiation and processing infrastructure for lithium, nickel, and cobalt remains at a nascent stage. 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. Under the operational guidelines, the government offers a capital subsidy of 30 per cent of eligible investment to establish four processing units. These comprise two lithium processing facilities, each with a minimum capacity of 30 kilotonnes, and two nickel processing units, each with a minimum capacity of 50 kilotonnes. The capital support carries a ceiling of Rs 500 crore per lithium beneficiary and Rs 900 crore per nickel beneficiary. Beneficiary selection involves a two-stage evaluation mechanism. Applicants first undergo an assessment for technical qualification. Those clearing the preliminary stage move to financial bidding, where two beneficiaries per mineral are picked through a least-cost criterion based on the lowest capital expenditure support requested. Incentive disbursements occur across three tranches linked to specified project milestones, serving to advance the objectives of Atmanirbhar Bharat by building resilient domestic processing capabilities across the critical mineral value chain. (ANI)
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