Government Mulls Subsidy Scheme for Rare Earth Magnet Production: Union Minister
The only rare earth repository in India is Indian Rare Earth Magnets Ltd, a PSU under the Ministry of Atomic Energy.
In 15 to 20 days, the government will decide whether to implement a plan to support local rare earth magnet manufacturing, Union Minister H D Kumaraswamy stated on Tuesday.
Consultations with stakeholders are being held to decide how much of a subsidy will be provided under the plan. According to Heavy Industries Ministry Secretary Kamran Rizvi, the plan will be submitted to the Union Cabinet for approval if the overall incentives exceed ₹1,000 crore.
“A firm based in Hyderabad is expressing interest. They have committed to provide 500 tonnes by December of the current year. The Minister of Mines and I have (had) conversations. The Minister for Heavy Industries and Steel, Kumaraswamy, told reporters here that his ministry and secretary are working on the matter and that a decision will be made in the next 15 to 20 days.
Many nations, notably India, experienced significant disruptions in the production of semiconductor chips and automobiles as a result of China’s recent curbs on exports of essential metals.
According to the secretary, the government and business are considering other procurement options, such as Japan and Vietnam, in the interim, as the actual production of rare earth magnets is expected to take around two years.
“So you are aware that rare earth is available in Japan, in Vietnam, and efforts are going on to take from there,” Rizvi continued.
Neodymium-iron-boron (NdFeB) magnets are examples of rare earth magnets. It is utilised in high-performance automotive applications such power steering motors in passenger cars and electric vehicles with internal combustion engines, as well as traction motors in two-wheelers and electric vehicles.
The incentive will make it easier for businesses to invest in building processing facilities so they can turn rare earth oxides into magnets. The only rare earth repository in India is Indian Rare Earth Magnets Ltd, a PSU under the Ministry of Atomic Energy. According to officials, they have enough rare earths to produce 1,500 tonnes of magnets.
According to Kamran Rizvi, secretary in the ministry of heavy industries, the amount of incentives to be provided would determine whether or not the plan is approved by the Union Cabinet.
“The degree of incentives determines this. The finance and heavy industries ministers can handle it if the total is less than ₹1,000 crore. It must be presented to the Cabinet if the amount exceeds ₹1,000 crore.
As the minister noted, stakeholder talks are ongoing, so we do not yet know the exact amount of subsidies needed, which is why there have been a variety of reactions. A competitive bid will be held to determine the amount of support needed, as some people want 50% and others want 20%,” Rizvi continued.
According to officials, 30 automakers requested permission from the Directorate General of Foreign Trade (DGFT) two weeks ago to import rare earth magnets from China in order to avoid production being adversely affected by the scarcity.
