What Happened
- The Union Cabinet has approved the Rare Earth Permanent Magnets (REPM) scheme with a financial outlay of Rs 7,280 crore to establish 6,000 metric tonnes per annum (MTPA) of integrated rare earth permanent magnet manufacturing capacity in India
- The Union Minister for Heavy Industries described the scheme as a strategic intervention to reduce import dependence on China and position India as a key player in the global REPM market
- The scheme comprises sales-linked incentives of Rs 6,450 crore on REPM sales for five years and a capital subsidy of Rs 750 crore for setting up manufacturing facilities
- India's REPM consumption is expected to double by 2030, driven by growing demand from electric vehicles, renewable energy, defence, and aerospace sectors
- The government is finalising the Request for Proposal (RFP) for inviting domestic and international bids
Static Topic Bridges
Rare Earth Elements — Strategic Minerals and China's Dominance
Rare earth elements (REEs) are a group of 17 metallic elements — the 15 lanthanides (lanthanum to lutetium) plus scandium and yttrium. Despite the name, most are not geologically rare, but economically concentrated deposits are limited and processing is complex and environmentally challenging.
- China accounts for approximately 69% of global REE mining and over 90% of global refining capacity
- Global REE reserves (estimated): China (~44 million tonnes), Vietnam (~22 million tonnes), Brazil (~21 million tonnes), India (~6.9 million tonnes, approximately 6-8% of global reserves)
- India ranks 3rd globally in REE reserves but contributes less than 1% to global mining output
- India's REE deposits are primarily in monazite-rich coastal sands (Kerala, Tamil Nadu, Odisha, Andhra Pradesh), which also contain thorium — a radioactive element subject to the Atomic Energy Act, 1962
- Indian Rare Earths Limited (IREL), a government of India undertaking under the Department of Atomic Energy, is the primary entity for REE extraction in India
- China imposed export controls on REEs in 2023 (gallium, germanium) and expanded restrictions in 2024-25, prompting global diversification efforts
- The Minerals Security Partnership (MSP), launched in 2022 by the US with 14 partners including India, aims to build resilient critical mineral supply chains
Connection to this news: The REPM scheme directly addresses India's strategic vulnerability — despite having the world's third-largest REE reserves, India imports nearly all its processed rare earth magnets, predominantly from China.
Rare Earth Permanent Magnets — Technology and Applications
Sintered rare earth permanent magnets are the strongest type of permanent magnets available. The two main types are neodymium-iron-boron (NdFeB) magnets and samarium-cobalt (SmCo) magnets.
- NdFeB magnets: Strongest commercially available permanent magnets; used in EV motors, wind turbine generators, hard disk drives, MRI machines, and consumer electronics
- SmCo magnets: Higher temperature resistance; used in defence applications (missile guidance, radar systems), aerospace, and high-temperature industrial environments
- A single electric vehicle requires 1-2 kg of NdFeB magnets for its motor; a direct-drive offshore wind turbine uses approximately 600 kg per MW of capacity
- The global REPM market is estimated at approximately $20 billion (2025) and projected to grow to $35-40 billion by 2030
- Processing chain: Ore → Concentrate → Separated Rare Earth Oxides → Rare Earth Metals → Alloy Powder → Sintered Magnet — China controls each stage
- IREL's new plant in Visakhapatnam will produce samarium-cobalt magnets using indigenous technology
Connection to this news: The scheme targets the establishment of 6,000 MTPA sintered REPM capacity, which would represent a significant entry into a market currently dominated by Chinese manufacturers.
Critical Minerals Policy — India's Supply Chain Security
India has adopted a multi-pronged approach to securing critical mineral supply chains, recognising their importance for the energy transition, defence, and electronics sectors.
- Ministry of Mines released India's Critical Minerals List in 2023, identifying 30 minerals including lithium, cobalt, nickel, rare earths, graphite, and vanadium
- Mines and Minerals (Development and Regulation) Amendment Act, 2023: Allowed private sector exploration and mining of critical minerals; first auction of critical mineral blocks in November 2023 (20 blocks for lithium and REEs)
- KABIL (Khanij Bidesh India Limited): A joint venture of NALCO, HCL, and MECL for sourcing critical minerals from overseas; signed agreements with Argentina (lithium), Australia (lithium, cobalt), and Chile
- India discovered significant lithium reserves in Jammu & Kashmir's Reasi district (estimated 5.9 million tonnes of inferred resources) in 2023
- Net Zero target by 2070: India's clean energy transition will require massive quantities of REEs for wind turbines, EV motors, and battery components
Connection to this news: The REPM scheme complements India's broader critical minerals strategy by targeting self-sufficiency in the highest-value downstream product — finished magnets — rather than just raw mineral extraction.
Key Facts & Data
- REPM scheme outlay: Rs 7,280 crore (Rs 6,450 crore sales-linked incentives + Rs 750 crore capital subsidy)
- Target capacity: 6,000 MTPA of integrated REPM manufacturing
- India's REE reserves: ~6.9 million tonnes (6-8% of global reserves); production: less than 1% of global output
- China's share: ~69% of global REE mining, ~90% of global refining
- EV magnet requirement: 1-2 kg NdFeB per vehicle; wind turbine: ~600 kg per MW (direct-drive)
- India's REPM consumption expected to double by 2030 from 2025 levels
- Critical minerals on India's 2023 list: 30 minerals including REEs, lithium, cobalt, graphite
- Key Indian REE deposits: Monazite sands in Kerala, Tamil Nadu, Odisha, Andhra Pradesh