Why in the News?
The Ministry of Mines has issued detailed guidelines for the Incentive Scheme for the Promotion of Critical Mineral Recycling.
Key features of the scheme
- It is part of the National Critical Mineral Mission (NCMM).
- Ministry: The Ministry of Mines
- Aim: To incentivize the development of recycling capacity for the separation and extraction of critical minerals from eligible waste streams within the country.
- Tenure: 6 years (from FY 2025-26 till FY 2030-31).
- Financial Outlay: ₹1,500 crore.
- Eligible Feedstock: Includes e-waste, Lithium-Ion Battery (LIB) scrap, and other scraps such as catalytic converters from end-of-life vehicles.
- Schemes covers 27 critical minerals including Antimony, Cadmium, Cobalt, Gallium, Graphite, Lithium, Nickel, Niobium, Rare Earth Elements (not containing Uranium and Thorium) etc.
- Beneficiaries: Both large and small/new recyclers (including start-ups).
- Incentive Mechanism:
- Capital expenditure (capex) subsidy: Upto 20% capital expenditure subsidy on plant and machinery for timely production.
- Operational expenditure (opex) subsidy: on incremental sales; 40% in the 2nd year and 60% in the 5th year (FY 2026-27 to FY 2030-31)
- Incentive Ceilings: Total incentives per entity capped at ₹50 crore for large entities and ₹25 crore for small entities, within which there will be a ceiling for Opex subsidy of Rs.10 crore and Rs.5 crore respectively.
About Critical minerals
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Significance of Recycling of Critical Minerals
- Strengthening Domestic recycling Infrastructure: It will enhance the technological, regulatory, and financial ecosystems for processing and recycling such as chemical processing, metallurgical extraction, or R3 and R4 level recycling of LIB scrap.
- The scheme incentives is expected to develop at least 270 kilo ton of annual recycling capacity resulting in around 40 kilo ton annual critical mineral production.
- Securing Supply and Mitigating Geopolitical Risk: Critical minerals are vital for modern technology and their supply chain is fragile and vulnerable due to the geographical concentration of their production and processing.
- China controls ~60-70% of rare earth production and placed export restrictions on rare earth elements (REEs) and magnets used in the defence, energy, and automotive sectors.
- Saving forex reserves: Recycling, often referred to as urban mining, can reduce India's reliance on importing saving valuable forex reserves.
- Import on four critical minerals - lithium (apart from lithium ion), cobalt, nickel and copper alone was around ₹34,800 crore in FY23-24.
- Environmental and Sustainability Goals: It will help improve E-Waste Management, conserving natural resources and reducing pollution from new mines.
- Formalization of industry: It is estimated to bring in Rs.8,000 crore of investment and creating 70,000 direct and indirect jobs as envisaged in recycling scheme.
