Cabinet approves Rs 2,814 Cr scheme to promote processing of lithium, nickel

The Union Cabinet has sanctioned a Rs 2,814 crore scheme to bolster the processing of lithium and nickel critical minerals in India, spanning five years until 2030-31. The decision was made during a cabinet meeting chaired by Prime Minister Narendra Modi. This initiative aims to bolster domestic processing capabilities, curtail reliance on imports, and foster a robust value chain.

The scheme provides a 30% capital subsidy on eligible investments for setting up four processing plants – two for lithium and two for nickel. Each lithium plant can receive a maximum of Rs 500 crore in subsidies, while each nickel plant can secure up to Rs 900 crore. Critical minerals, including lithium, nickel, and cobalt, are indispensable for modern technologies, clean energy, and economic growth.

However, their global supply chains are vulnerable to geopolitical risks, price fluctuations, and export restrictions, posing threats to national security and economic stability. India currently heavily imports refined intermediates and high-purity critical minerals, with domestic processing capacity still in its infancy. This scheme seeks to address this by offering targeted financial support for establishing and operating domestic processing facilities.

The primary focus is on processing lithium and nickel ores/intermediates into high-purity compounds, with cobalt being recovered as a secondary by-product of nickel production. This development will bolster key industries like electric mobility, battery energy storage systems, electronics, defence, and specialty steel.