Cabinet Approves Critical Mineral Processing Capex Support Scheme
The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the 'Capex Support Scheme to Promote Critical Mineral Processing' with a financial outlay of ₹2,814 crore over a five-year period from FY 2026-27 to 2030-31. The scheme addresses India's substantial import dependence for refined intermediates and high-purity materials due to limited domestic beneficiation and processing infrastructure for critical minerals including Lithium, Nickel, and Cobalt.
The scheme provides targeted capital expenditure support for establishing and operationalizing domestic processing facilities, with the objective of developing resilient end-to-end value chains, maximizing value addition, achieving import substitution, and supporting national security and economic sovereignty. It specifically targets processing of Lithium and Nickel ores/intermediary products into high purity compounds, with Cobalt expected to be recovered as a by-product of nickel production.
Under the scheme, capital subsidy of 30% of eligible investment will be provided for setting up four critical mineral processing plants: two lithium processing plants with minimum capacity of 30 kilotons each and two nickel processing plants with minimum capacity of 50 kilotons each. The maximum capital support is capped at ₹500 crore per lithium beneficiary and ₹900 crore per nickel beneficiary.
Beneficiary selection will follow a two-stage process involving technical qualification assessment followed by financial bidding based on the least-cost criterion (lowest CAPEX support sought). Incentives will be disbursed in three tranches linked to achievement of specified milestones. The scheme aims to support critical sectors including electric mobility, Battery Energy Storage Systems (BESS), electronics, defence, and speciality steel by developing domestic processing capabilities and reducing exposure to geopolitical disruptions, price volatility, and supply restrictions.