Cabinet approves Rs 2,814-crore scheme for lithium and nickel processing
The Union Cabinet has sanctioned a five-year capital expenditure support scheme to boost domestic processing of critical minerals.
The Union Cabinet on November 4 approved a Rs 2,814-crore capital expenditure support scheme to encourage the domestic processing of critical minerals like lithium and nickel, according to Moneycontrol and ANI.
Union Minister Ashwini Vaishnaw stated during a Cabinet briefing that the initiative aims to establish processing facilities that convert ores or intermediate products into high-purity compounds. The scheme will run for five years from FY27 to FY31.
Under the plan, the government will provide a 30 per cent capital subsidy on eligible investments for four plants. This includes two lithium facilities with at least 30 kilotonnes of capacity each and two nickel facilities with at least 50 kilotonnes of capacity each.
Financial assistance for these projects is limited to a maximum of Rs 500 crore for each lithium beneficiary and Rs 900 crore for each nickel beneficiary. The government will choose winners through a two-step method involving technical assessment and financial bidding, selecting those who require the least amount of support.
The government noted that mineral processing is currently concentrated in a few global areas, which creates risks regarding price volatility and geopolitical disruptions. The output from these plants is intended for sectors such as electric mobility, defence, electronics, and battery energy storage systems (BESS).
Cobalt is also expected to be recovered as a by-product during the nickel processing. The government has identified Gujarat, Maharashtra, Odisha, and Andhra Pradesh for the establishment of critical mineral processing parks.