Cabinet to consider ₹2,800 crore scheme to boost domestic lithium, nickel processing today

The Union Cabinet is likely to consider a proposed ₹2,800-crore scheme to provide capital expenditure (capex) support for setting up domestic critical mineral processing facilities on Wednesday, sources told Business Today.

The proposed scheme is aimed at developing India’s domestic critical mineral processing capabilities, with a particular focus on processing lithium and nickel ores, as well as intermediary products, into high-purity compounds. Cobalt is also expected to be recovered as a by-product of nickel processing, sources said.

According to the proposed framework, the government is likely to offer a capital subsidy of 30% of eligible investments for setting up four processing plants – two lithium processing facilities with a minimum capacity of 30 kilotonnes (kt) each and two nickel processing facilities with a minimum capacity of 50 kt each.

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The maximum capital support is likely to be capped at ₹500 crore per beneficiary for lithium processing plants and ₹900 crore per beneficiary for nickel processing plants.

Sources said the government has identified four states – Andhra Pradesh, Odisha, Gujarat and Maharashtra — for setting up critical mineral processing parks.

Why critical mineral processing matters

Lithium, nickel and cobalt are key raw materials used in lithium-ion batteries, which power electric vehicles, smartphones and several other electronic applications.

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India’s push to establish domestic processing capacity comes amid growing demand for critical minerals driven by the transition towards electric mobility, renewable energy and advanced manufacturing.

While securing access to mineral resources is an important part of India’s critical minerals strategy, developing domestic capabilities to process ores and intermediary products into high-purity materials is equally crucial for reducing import dependence and strengthening the country’s battery and electric vehicle supply chains.