Cabinet approves Rs 1,500 crore incentive scheme for critical mineral recycling

The Cabinet has sanctioned a significant ₹1,500 crore incentive scheme aimed at enhancing the recycling capacity for critical minerals. This initiative, falling under the National Critical Mineral Mission (NCMM), seeks to bolster the recycling value chain and ensure a steady supply of essential minerals. The scheme targets the separation and production of critical minerals from secondary sources, aligning with broader national objectives for sustainable supply chains.

The new scheme promises a 20% capital expenditure (capex) subsidy for plant and machinery involved in the recycling process, with a reduced subsidy applicable for delays beyond the stipulated timeframe. Additionally, an operational expenditure (opex) subsidy is being offered as an incentive on incremental sales over the base year, culminating in a potential overall financial aid of up to ₹50 crore for large entities and ₹25 crore for smaller counterparts.

The Mines Ministry anticipates that this incentive will facilitate the development of at least 270 kilotonnes of annual recycling capacity. This translates to approximately 40 kilotonnes of annual critical mineral production, propelling an investment influx of roughly ₹8,000 crore and creating around 70,000 jobs. "A prudent way to ensure supply chain sustainability in the near term is through the recycling of secondary sources," stated the Mines Ministry.

The scheme spans a six-year period from FY26 to FY31 and covers eligible feedstocks such as e-waste, lithium-ion battery scrap, and other related materials. Beneficiaries will include both established recyclers and new entrants, including start-ups, with a third of the scheme's allocation reserved for newer players. This initiative supports investments in both new ventures and expansions or modernisations of existing facilities.

Union Minister for Heavy Industries, HD Kumaraswamy, commented on the scheme's alignment with the Ministry's commitments to green mobility and clean energy. He stated, "Aligned with the Ministry of Heavy Industries’ commitment to green mobility and clean energy, this initiative will provide sustainable supply chains for lithium-ion batteries and other critical minerals that are essential for electric vehicles, advanced storage solutions and emerging technologies."

Kumaraswamy further emphasised the initiative's alignment with broader environmental and industry goals. "It complements our broader push for EV adoption, PLI schemes and investments in future-ready industries, creating strong linkages between recycling, resource efficiency and the green mobility revolution," he added.

This scheme represents a strategic push by the government to tackle the gestational challenges faced by the critical mineral value chain, which includes exploration, auction, and acquisition. By focusing on recycling, the government aims to bridge these gaps swiftly and ensure a sustainable supply of essential minerals to various industries, particularly the electric vehicle sector.

Overall, the initiative is expected to play a crucial role in India's move towards a sustainable industrial future, promoting resource efficiency and innovation in critical sectors. It seeks to establish a robust framework for critical mineral recycling that would serve the country's burgeoning energy and technology needs.