In another 15-20 days, the government will roll out a scheme that subsidises the production of rare earth magnets in the country in a bid to avert huge lapses in the production of automobiles, Electric Vehicles (EVs), hearing devices, electrical appliances and smart watches.
With stakeholder consultations underway to determine the quantum of subsidy to be offered as part of the scheme, India’s plans of reducing its dependence on China for rare earth may start taking shape.
“One Hyderabad-based company is showing interest and has promised delivery of 500 tonnes by this December. We have (had) discussions with the Mines Minister. Our Secretary and our ministry are working on it and ultimately, a decision (will be taken) I think within 15-20 days,” said HD Kumaraswamy, Union Minister for Heavy Industries and Steel.
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If the total incentives to be given cross ₹1,000 crore, the scheme will be sent to the Union Cabinet for approval, said Kamran Rizvi, secretary in the Heavy Industries Ministry.
China, which controls 90 per cent of the rare earth resources, put curbs on exports of key metals in April, triggering widespread disruption in the manufacture of automobiles and semiconductor chips in a host of countries, including India.
Besides China, rare earth is available in Japan and Vietnam. While the government is making efforts at procuring the substance from these countries, it is also making arrangements to start production of rare earth magnets domestically, which is expected to take up to two years.
Rare earth magnets include neodymium-iron-boron (NdFeB), used for high-performance automotive applications such as traction motors in electric vehicles (two-wheelers and passenger vehicles) and power steering motors (in passenger vehicles) in both electric vehicles and internal combustion engine vehicles.
The government’s subsidy to domestic players will facilitate investment for establishing processing facilities to convert rare earth oxides into magnets.
Indian Rare Earth Magnets Limited, a PSU under the Ministry of Atomic Energy, is the sole repository of rare earths in India. They have enough rare earths to make 1,500 tonnes of magnets, officials said.
"We do not know the quantum of subsidy required yet. Somebody wants 50 per cent, somebody wants 20 per cent, so it will be subject to a competitive bid,” informed Rizvi.
Officials said 30 automotive firms have sought authorisation from the Directorate General of Foreign Trade (DGFT) to import rare earth magnets from China a fortnight ago, so that production is not impacted negatively due to the shortage.
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